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  • Plains All American - An Undervalued MLP Opportunity [View article]
    As a former MLP junkie with over a dozen names in my taxable portfolio, I have since pared down to the best of breed; PAA and MMP. While not nearly the highest yielders in the space, astute management of DCF (Distributable Cash Flow) helps me sleep at night.
    Jan 9, 2015. 08:00 PM | 1 Like Like |Link to Comment
  • Vanguard Natural Resources: Significant Value Can Be Found In The Preferred Units [View article]
    While all Preferred issues bear interest rate risks, those of MLP's and REIT's offer an additional measure of security. That being the suspension or cut of the dividend must be preceded by a complete elimination or suspension of the distribution of the common units. For that to happen, the underlying company is probably toast.
    Dec 28, 2014. 11:11 AM | 1 Like Like |Link to Comment
  • Use Common Cents When Evaluating The Preferred Stocks Of Health Care REIT (HCN) [View article]
    Lighthouse Financial Services. They work in partnership with TD Ameritrade. A small shop with only 9 employees. If you are interested in their contact information, please send me a private message.
    Nov 4, 2014. 09:52 PM | Likes Like |Link to Comment
  • Use Common Cents When Evaluating The Preferred Stocks Of Health Care REIT (HCN) [View article]
    The "floor" is created by the competitive yield that exists on the issue even after throwing out throwing out the conversion benefit, or lack thereof. There are many convertible preferreds on the market whose conversion rates are astronomically out of the money, but still have dividend yields that keep their face values from falling into the abyss.
    Nov 4, 2014. 03:31 PM | Likes Like |Link to Comment
  • Use Common Cents When Evaluating The Preferred Stocks Of Health Care REIT (HCN) [View article]
    ... which is why I was neutral about the series "J" Preferred which was $1.00 over the call price of $25.00 at the time of writing this article.
    Nov 4, 2014. 03:01 PM | Likes Like |Link to Comment
  • Use Common Cents When Evaluating The Preferred Stocks Of Health Care REIT (HCN) [View article]
    Hi Jim, thanks for reading my article.

    HCN series "I" is a perpetual preferred and thus does not have an actual call date like a traditional preferred. The $50 that you refer to is actually the liquidation preference price to be paid to the holder upon liquidation of the company. As I pointed out in my conclusion to the article, this is a complex instrument. On or after 4/20/18 the parent company has the option to convert the preferred shares to common shares if the price of the common exceeds 130% of the conversion price which initially was $59.10. The actual conversion price may be adjusted in the future due to new stock offerings, splits, etc. Meanwhile, the holder of the Preferred can convert each Preferred share at any time to .846 common shares up to 4/20/18. The pospectus spells this out in detail, but a more readable summary can be found at
    Nov 4, 2014. 02:24 PM | Likes Like |Link to Comment
  • Health Care REIT with secondary; details acquisition pipeline [View news story]
    Market overreactions to secondary offerings of REIT's and MLP's seem to be commonplace. While it is always frustrating for existing shareholders to see these reductions in market price, investors need to understand the differences between these classes of assets as opposed to traditional common stocks. C corps can fund their growth through retained earnings as they have no statutory obligation to return cash to shareholders in the form of dividends. REIT's on the other hand must return 90% of otherwise taxable income to shareholders in order to maintain their tax exempt REIT status. Because they have limited retained earnings, the only way REIT's can increase dividends to the stakeholders is by increasing rents or through adding debt or new equity to finance expansion.

    For example, if I owned three single family homes that generated $30,000 in net rental income, there are three ways that I can increase that income. 1) Raise rents 2)Borrow money to buy more properties 3) Buy more properties using available cash. Considering that most all ready cash in a REIT structure has already been distributed to the stakeholders, only options 1 and 2 are available to grow the income stream.
    Sep 13, 2014. 01:23 PM | Likes Like |Link to Comment
  • Update: GE Nears Deal To Sell Appliance Business To Electrolux For $2.5 Billion [View article]
    I get the Electrolux purchase of the manufacturing assets but what about the GE brand? Anyone know if licensing the brand is part of the deal? Mr. Wonderful on the Shark Tank would say, keep your $2.5 Billion (25 cents a share) and just pay me a royalty. The legacy value of the GE brand vs Electrolux cannot be compared. I have had many GE products, not all good, but mostly OK with a broad service network. My limited experience with Electrolux branded products has been horrible.
    Sep 7, 2014. 02:22 PM | Likes Like |Link to Comment
  • An Outperforming High-Dividend Stock With Multiple, Safe High Yields Over 6% [View article]
    I discovered PSA Preferred's a couple of years ago and I continue to add to my positions. IMO, they are contenders for the best of breed in the entire Preferred universe. I penned a SA article on these issues a year ago and my outlook has not changed. I always look for strength in the Common dividend as a measure of safety for the sustainability of the Preferred dividend. PSA Preferreds are also rated Investment Grade, which further bolsters my confidence in these issues.
    Aug 24, 2014. 12:00 PM | 1 Like Like |Link to Comment
  • 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 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, 2014. 09:07 PM | Likes Like |Link to Comment