You should have seen the news about the Turnpike here in PA. Some goofballs decided to take a bus on the road on Friday night.
Thanks for your support, much appreciated.
David - sometimes he really makes me laugh. Clearly the company is trading a little high right now, but it is the best in the industry.
Have fun in Florida. We got 24 inches of snow here in PA this weekend.
Harrisburg ended up getting 30 inches. The turnpike near Bedford was shut down for quite awhile. This morning I got the Escape out and took a quick drive. The main roads are fine, but the back roads and side streets are a mess.
Yes, it always makes sense to diversify. Based on current price level, NRF and TOO look fairly risky now.
While they pay less, I like boring REIT preferreds. But AHT has a little too much leverage for me. Most of those trade around par, but I can get a solid 7% yield with very little risk.
I wonder if it would be worth selling shares at $55 and buying them back when it returns to the mid 40's?
You seem to really like the company and the preferreds are yielding close to 25%. Why did you sell those shares around $9?
My meeting was great and thanks for asking. Great way to share ideas and thoughts on many topics. I'm glad to see that you recommended your own post four times Good work!
While I generally agree with your statement, 10% of a preferred stock trading in one day is very odd. Guessing there may be some traders in there. But you are correct, as it is hard to play with preferred stock.
A CMRE issue was trading very low today and I picked up a few more shares. The market for some of these preferreds is very oversold and there are great bargains out there now, if investors have cash available.
I hate it when that happens.
Agreed - but how does 10% of the volume on a smaller traded preferred get done in one day? I've not seen this before.
May be a good time to diversify a little bit. Personally, I think the CMRE shares are a better play, but to each his own.
I looked back over my post and in no way did I imply the company was loaded with debt. Just mentioned that almost all of the ships have secured debt on them at 10%, which is relatively high. Seaspan was able to issue a 6.38% senior note, but it is currently trading around $23.
The sale and leaseback of ships to OOCL are a little concerning, as the leases are short and the daily rate is fairly high. However, this company is making a few bucks and currently has a common dividend. The dividend cut by TOO has impacted the whole shipping sector, just like the dividend cut with KMI has impacted almost all MLPs.
Preferreds of CMRE yield about 13% now, with lots of potential for capital gains - so that may be enough risk for me. However, I may pick up a few preferred shares of GSL as their ships are locked into leases for the next couple of years.
The fleet is larger, locked into some long term contracts, and the interest rate on debt is much lower than GSL. The preferreds look like a decent investment at the current price level.
So you basically turned a $20 investment in the preferred shares into $8. Nice work. Can you let me know what other stocks you own, so that I can short them on Tuesday morning?
Thanks in advance.
kaptain lou, CPA
It is right from the annual financial statements, which I assume he is not able to read. It is on page 125 of 144, and I am guessing he cannot count past 10 without taking his shoes off. The notes are secured by FIRST PRIORITY SHIP MORTGAGES ON 17 OF THE18 VESSELS. This is part of the reason why the common and preferred stock are trading this low. It's also a very high interest rates, compared to what CMRE is paying.
On March 19, 2014 the Company completed the sale of $420,000 of 10.0% First Priority Secured Notes (the “2019 Notes”) which mature on April 1, 2019. Proceeds after the deduction of the original issue discount, but before expenses, amounted to $413,700.
Interest on the 2019 Notes is payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2014. The 2019 Notes are secured by first priority ship mortgages on 17 of the Company’s 18 vessels (the “Mortgaged Vessels”) and by assignments of earnings and insurances, a pledge over certain bank accounts, as well as share pledges over each subsidiary owning a Mortgaged Vessel. The 2019 Notes are fully and unconditionally guaranteed, jointly and severally, by the Company’s 18 vessel owning subsidiaries and Global Ship Lease Services Limited.
Sure, no problem. It is right in their SEC filing under the debt section of the financial statements. From memory last night, 16 of the 17 ships have secured debt on them at a rate of about 10%. These filings are right on their website.
You are right, I am full of it - which I assume you mean "useful information." Please do not blame me if you cannot read a simple debt footnote, as I used to write debt footnotes when I was in public accounting.
kaptain lou, CPA