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  • Orchids Paper Products A Paper Tiger, But In A Good Way [View article]
    Just listened to the conference call after seeing the stock price fall out of bed this morning. The call was off to a rocky start with a lot of nervous tension being displayed by both the CFO and CEO as evidenced by the constant throat clearing. They should have done a better job in anticipating some of the tough questions being posed in the Q&A session, particularly those relating to the announced store closings (30%) of their second largest customer, Family Dollar. However, Jeff Schoen (CEO) seemed to eventually hit his stride. The upshot seems to be a commitment to dramatically expand the company to that of a national supplier as opposed to a private label producer shipping only to destinations within 500 miles of their single production facility. The commitment seems strong to at least maintain the dividend, now at 5.25%, however prospects for near term dividend growth are in question. Only 200,000 shares traded so far today, well short of the 700,000+ that changed hands back in late March on a 6 point drop in the share price. My guess is that some institutional dumping is going on as the overall fundamentals haven't changed that much to warrant a 21% drop in the stock price over the last month. While I am tempted to add here, I will just hold for now. Would love to hear other comments and reactions to today's call. --wj
    Apr 23 01:20 PM | 3 Likes Like |Link to Comment
  • Campus Crest Looks Cheap, Should I Hit The Buy Button? [View article]
    And lets not forget, the sooner we get the youngsters into the work force, the sooner they start contributing to social security to help shore up that black hole, instead of spending their student loan money on concerts and good times; much of which will never be paid back. Double whammy!
    Apr 20 02:07 PM | Likes Like |Link to Comment
  • Dividend Buy Of The Month: Orchids Paper Products Company [View article]
    Well, wasn't that a nice little "buy on the dip" opportunity. The options grant on the table for Schoen has a strike price of $30. I'm not sure of the vesting timing, but if he were able to exercise all 400,000 shares, he would have to come up with $12 Million, which btw, would go into the company's coffers. Given the conservative salaries of Orchid's top management, including Schoen, I like this incentive based type of compensation. They win, we win. On that, I picked up an additional 300 shares on Friday putting me at a nice round 1000.

    TIS is in the sweet spot for the times that we are in. Private brands and value pricing will be the soup du jour for the forseeable future (IMHO). --wj
    Mar 24 11:05 AM | 2 Likes Like |Link to Comment
  • A Preferred Bond Replacement Strategy For Intelligent REIT Investors [View article]
    Preferred investors should pay particular heed to @BruceM when he points out what I consider to be the most important difference between bonds and preferred stocks. That is... Bonds have a maturity date and Preferreds do not. Which means, barring a meltdown, return of face value is guaranteed at their maturity date on bonds where not so on Preferreds. That being the case, Preferreds still make up over 10% of my income portfolio. I seek out Cumulative Preferred issues whose dividend paying record on the Common is strong and sustainable therefore adding an increased level of security for strong and sustained performance on the Preferreds. My favorite preferred issues are those of Public Storage (PSA). --wj
    Feb 25 02:35 PM | 1 Like Like |Link to Comment
  • Profiting From Good Fortune Or Bad [View article]
    I always enjoy your articles and your unique writing style. You have my vote to replace the late Alan Abelson of Barrons.

    While I have frequently used implied volatility and its comparison to a stock's historical volatility to determine if an option is overpriced or underpriced, I never gave much thought to the actual math used to compute IV. Your reference and link to your previous article on implied volatility was very helpful. (Call Bid + Put Bid) / Strike price. I take it that this formula only works for the nearest strike price and the out month expiration date?
    Feb 21 09:58 PM | 2 Likes Like |Link to Comment
  • What's The Secret Sauce That Makes STAG A Smokin' Hot REIT? [View article]
    While I like the STAG story, I like the Preferred story better. The series B cumulative preferred with a coupon rate of 6.6% currently yields 7.4%. Given that the very nature of REITs requires them to pay out around 90% of their AFFO to common holders, the dividend on the cumulative preferred is as close as you get to a non government guaranteed "risk free" sustainable dividend. With the $25 call date well into 2018, the yield to call is 9.89%. Yes, when interest rates move up, there will be some pressure on the trading price, but I think most of the anticipation of rising rates is already priced in.
    Feb 21 09:07 PM | Likes Like |Link to Comment
  • Why Not Add This Top-performing MLP To Your Long-Term Income Portfolio? [View article]
    At one time, I held over 10 MLP's in my taxable portfolio in my chase for tax deferred yield. But, after spending considerable dd time dissecting all of the pluses and minuses, I recently sold them all with the exception of MMP and PAA. I concluded that these two were clearly best of breed when measured in terms of total return and a sustainable business model that doesn't depend solely on raising cash from new investors in order to maintain their distribution. Yes, the current yield of this duo trails the pack by a bunch but I will live with that.
    Nov 28 11:03 AM | 2 Likes Like |Link to Comment
  • Compass Diversified Holdings Looks To Build Value The Old-Fashioned Way [View article]
    I have been building a position in CODI for more than a year now and will add more on any significant dip. A business segment that I would like to see them consider is fresh fruit and vegetable distribution. There are scores of attractive acquisition opportunities, all "with a reason to exist" [quote from CODI's mission statement].
    Nov 28 09:13 AM | Likes Like |Link to Comment
  • Rethinking Reinsurance: A Common Approach To Preferred Investing In Axis Capital Holdings [View article]
    Not only did I misstate the call dates in my reply that you referenced, but I also mixed up the C & D issues. The series C carries a coupon rate of 6.88% and the D series carries a 5.5% coupon rate. The call dates are 4/15/17 and 6/1/18 respectively. Thanks for catching this silly error on my part. I think I must have been looking at the Moodys rating date which was in July of this year. Thats what I get for replying on the fly from my cell phone. By the way, I now own the series D issue.
    Sep 7 09:47 AM | Likes Like |Link to Comment
  • Rethinking Reinsurance: A Common Approach To Preferred Investing In Axis Capital Holdings [View article]
    It's nice to see someone with your level of expertise in the reinsurance industry weigh in on this article.

    No doubt, that the competition from Insurance Linked Securities (ILS) that you reference backed by the likes of hedge funds and pension funds pose some headwinds for mainstream Re companies. I wonder how much of that competition is currently being driven by our low interest rate environment and the dearth of other income producing alternatives, and will that competition abate somewhat as rates move higher as other more attractive and less risky vehicles become available?

    It is my opinion and hope that AXS, through its global and product line diversity, will allow them to ride this out and continue their growth. Recently the company has been focusing more on agriculture, which accounted for half of their premium growth year over year.

    I welcome your insight on this and anything else that you can share about the business of reinsurance. It is a complex topic rarely written about here on SA. --wj
    Aug 29 02:36 PM | Likes Like |Link to Comment
  • Rethinking Reinsurance: A Common Approach To Preferred Investing In Axis Capital Holdings [View article]
    The series C preferred carries a coupon rate of 5.5% at the time of isssue. The series D coupon rate is 6.88%. The series C is discounted below the $25 par value to reflect current market rates, whereas the series D is already at current market rates. Further, the series D is subject to call at any time due to the fact that it is past the call date and selling over par.
    Aug 29 11:39 AM | Likes Like |Link to Comment
  • Rethinking Reinsurance: A Common Approach To Preferred Investing In Axis Capital Holdings [View article]
    Normally I avoid non cumulative preferreds as evidenced by the other preferred issues that I currently own in my portfolio. You are correct in that the series D preferred of AXS is non cumulative. However as stated in the article the company has a 10-year record of consecutive dividend increases on the common. For the dividend on the preferred to be suspended, the common stock dividend must be suspended first before the preferred dividend gets altered. Barring a total catastrophic meltdown, I think that is unlikely.

    Thanks for reading the article and your comment --wj
    Aug 28 09:59 PM | Likes Like |Link to Comment
  • Compass Diversified Holdings: It's Not The Direction, It's The Holding [View article]
    I don't see how Fox will be debt free by year-end. The $36.5MM proceeds from the IPO is well short of the $61.5MM owed to CODI. Then there is the issue of working capital for Fox. I just wish CODI would be a little more forthcoming on post IPO plans not only for Fox but CODI as well. I asked for some additional color from CODI Investor Relations on this but have not received a reply.
    Aug 26 09:24 PM | Likes Like |Link to Comment
  • Consider Storing Some Extra Cash In Public Storage Preferreds [View article]
    I agree that spending time in the SA community is one of the highest and best uses of time to spot opportunities and expand ones investment knowledge.

    All the best --wj
    Aug 26 09:17 PM | Likes Like |Link to Comment
  • Consider Storing Some Extra Cash In Public Storage Preferreds [View article]
    I'm glad you bought the series "W" preferred as this will give you over 4 years of relatively safe 6%+ income before it can be called. Of course, if called at $25, you will have over a $5.00 gain.

    All the best --wj
    Aug 26 08:56 PM | Likes Like |Link to Comment