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  • A New 9.75% Preferred - What Investors Should Know [View article]
    Good addition, Harry. I don't think GDP will have a problem refinancing the bonds. The issue will be what will interest rates be in 2019. How will the credit markets be? If they run into a liquidity problem, that could be a whole other situation.
    Aug 22, 2013. 02:59 PM | Likes Like |Link to Comment
  • SL Green Realty: Get A 7%-Plus Yield On New York Real Estate [View article]
    While a 6.5% coupon does seem light. I believe every preferred's quality is attributed to the underlying assets. I believe DLR has a higher interest rate due to its niche area. They specialize in technology real estate for items such as server space and other items. SLG is more about office, which is a much larger market. I think the office market in NYC is much more stable than that of a technology real estate company. Althought the coupon is 6.5%, the yield on cost is now greater than 7%. I believe it's an incredibly attractive preferred because of the space the company operates in.
    Aug 21, 2013. 04:44 PM | Likes Like |Link to Comment
  • SL Green Realty: Get A 7%-Plus Yield On New York Real Estate [View article]
    The Goodrich preferreds? The symbol is GDP-D, but this varies depending on broker. It could be GDP-PD, GDP PRD. You would need to ask your broker how they name preferreds.
    Aug 21, 2013. 12:03 AM | Likes Like |Link to Comment
  • A New 9.75% Preferred - What Investors Should Know [View article]
    berloe,

    Some of these yields can be considered tax-free because it could be related to a return on capital. This means your cost basis will decline and while you won't have to pay taxes now, you will have a future tax liability. The whole K1 situation in this case is pretty confusing and you would have to consult with a tax advisor in this case. The reason why I like preferreds is because they are considered dividends, so there is more simplicity involved. However, this is more related to MLPs and other companies that issue K1s, but if you are talking about munis, then yes you wouldn't have to worry about cost basis or K1s. I do believe its beneficial to have some exposure to munis, especially in the state you reside in, just as long as the state can sustain a balanced budget.
    Aug 20, 2013. 11:26 AM | Likes Like |Link to Comment
  • A New 9.75% Preferred - What Investors Should Know [View article]
    I read up on it. What Goldman did was just disgraceful. This is why it's important to read the fine print. Most REIT preferreds have a clause now, which states that in event of a buyout, the preferreds are called early at par. This isn't too big of an issue if you buy under par, but what happened with Equity Inns is just crazy. I can't even imagine with what went through the minds of preferred holders at the time.
    Aug 19, 2013. 04:28 PM | Likes Like |Link to Comment
  • A New 9.75% Preferred - What Investors Should Know [View article]
    I was only comparing the two in the sense of risk, not necessarily as an apples to apples comparison. Thanks for reading.
    Aug 19, 2013. 12:28 PM | Likes Like |Link to Comment
  • 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 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, 2013. 06:11 PM | 1 Like Like |Link to Comment
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