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  • Stay Away From These Preferreds, Buy The Common Instead [View article]
    I didn't just mean stock appreciation, but dividend growth as well. I would hate to be in a situation where the common for a stable REIT has a higher yield than the preferred.
    Aug 17 03:32 PM | Likes Like |Link to Comment
  • Stay Away From These Preferreds, Buy The Common Instead [View article]
    Yes it is listed as shareholder's equity. I thought you meant its equity in the company like common stock. Simple misunderstanding.
    Aug 15 11:15 AM | 1 Like Like |Link to Comment
  • Stay Away From These Preferreds, Buy The Common Instead [View article]
    Actually preferred stock does not entitle you to an equity stake unless its convertible. The max value of the preferred would be par. The preferred has no upside if the underlying company performs better.
    Aug 15 10:08 AM | 3 Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    I think it comes down to a few things. One is the risk profile. There are investors who have a much larger risk appetite and as I outline in my article above, the commons have significantly higher yields, but there is a clear risk associated with it. However, if investors understand the risk then I don't see why they wouldn't invest in the common. The other strategy is diversification. Remember that the common is based on cash flow and the preferred is based on the company's ability to pay the dividend. I think a good strategy is two have a mix of both. A dividend cut in a common is likely not going to impact the preferred. So this could be a good hedge. I don't really see mREITs losing money because there would be no logic in buying MBS securities if spreads were to tighten. So as long as sufficient cash flow exists, preferreds are safe.

    Its very hard to compare a preferred investors risk appetite to that of a common investor.
    Aug 13 04:34 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    This is at about a 10% discount to par. The series A on the other hand is about 8% under par. Both series have the same yield, but the discount is slightly greater on series B because it had to fall more to justify since a yield equal to the series A.
    Aug 13 12:42 PM | Likes Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    Dividend is $1.875 annually, which is about 46.8 cents per quarter. Not sure where you see 39 cents.
    Aug 13 12:37 PM | 1 Like Like |Link to Comment
  • A Stable 8.3% Yield For Income Investors [View article]
    Larry, I think most of the damage has been done. Remember that the market is forward looking, everyone believes that rates will continue to rise, the selloff that we witness in mREIT preferreds is more than likely taking into consideration a rise in rates.
    Aug 13 12:31 PM | Likes Like |Link to Comment
  • A 10% Yield That Investors Should Stay Away From [View article]
    Until the underlying company can show a profit, the preferreds are in trouble. They will continue to burn cash and there could be a liquidity problem and a dividend suspension could be likely.
    Aug 11 02:59 PM | Likes Like |Link to Comment
  • Compugen: Not Enough Information On Bayer Deal, Investors Should Stay Away [View article]
    +1 and thanks for responding. There is a possibility that more deals could happen. I am not denying that. I am concerned about the chances of meeting each milestone. As I said before, the real question is, will the milestone payments they achieve justify the stock price? I can't make any predictions, but I am sure you would agree that the latter phases are important since the payments are likely higher. I honestly believe hitting the initial milestones will not be an issue. Its just hard to determine the ability to achieve that $500 million.
    Aug 8 06:11 PM | 1 Like Like |Link to Comment
  • Compugen: Not Enough Information On Bayer Deal, Investors Should Stay Away [View article]

    Thanks for responding. I think you misread my article and its my fault since I should have clarified it better. I am not actually telling people to go out and short this. I am also well aware most small biotechs don't make money until their blockbuster drugs gets FDA approval. My article is more for encouraging profit taking as well as telling new investors that there are better entry points. Its very difficult to gauge the chance of success for this deal. This company has nearly a $300 million market cap now. I just wanted to make clear the risk-reward scenario here. Thanks again for responding.
    Aug 8 06:06 PM | 1 Like Like |Link to Comment
  • Invest In Retail Real Estate And Get A 7% Yield [View article]

    Many REITs actually lose money on a GAAP basis. Its just because depreciation is there highest expense. There is a massive tax benefit with depreciation. You need to look at cash flows when investing in REITs. As for the conversion, this is only in a change of control scenario and preferred holders get an option of converting or just selling your shares at par. So if a company buys out RPAI, you can either convert to the new stock or sell your shares at $25.
    Aug 8 04:16 PM | Likes Like |Link to Comment
  • J.C Penney rallies off of CEO search, Questrom in the mix? [View news story]
    If Ackman wants to save JCP, he needs to stop getting involved. This guy is like the Jerry Jones of retail. He increased the decline in JCP when he hired Ron Johnson.
    Aug 8 04:00 PM | Likes Like |Link to Comment
  • McDermott Can Weather Its Losses, Investors Shouldn't Worry [View article]
    Those projects seem to have the largest impact on unexpected costs. You are right. At the end of the day, management has to get it right. Management will need to execute on the right fronts. Management has mentioned solutions to the problems they discussed. Some of them are no brainers. They need better equipped vessels for installations and they have mentioned to outsource this to a third party. Just like with most companies out there, management execution is everything.
    Aug 6 06:10 PM | Likes Like |Link to Comment
  • Questcor Going Up Even After Earnings [View article]
    I honestly believe the overall market decline was due to the possibility of other insurance companies following Aetna. The market realized this is not likely to happen. The stock rebounded from the bottom even before this earnings report.
    Aug 2 07:42 PM | 2 Likes Like |Link to Comment
  • Get A 6.63% Yield On New York's Largest Office Buildings [View article]

    Preferreds can be great investments if used properly. Its best to avoid preferreds where the dividend is fairly low. This means when interest rates rise, the principal will get hit hard. You need to find the perfect risk adjusted return. The great part now is that the market has finally realized that it was in dream mode during the low interest rate environment. When Bernanke mentioned tapering, most high yield assets took a hit. I think now that the market has lost its beer goggles, it can actually see that the prior valuations where preferreds were over par was just insane. The preferred market has been knocked back into reality. September was a tough time to buy preferreds since the market was still drinking the kool-aid and believed that interest rates were not going up for awhile. Preferreds have been knocked back into reality. Lately I was conservative after Bernanke's announcements, but it turns out that the preferreds have priced in future interest rate rises.
    Aug 1 06:46 PM | Likes Like |Link to Comment