I ended up buying EXG with my last paycheck and am close to having as much as I want in it. I would like to buy a bit more this Friday but the price keeps creeping up and the discount has narrowed to single digits for the first time in forever. I'm not seeing many bargains in the preferred space except Greenhunter Energy's preferred and I already own as much as I'm comfortable with in a very speculative company even though the news flow continues to be upbeat.
Several Eaton Vance cefs meet my buying criteria, but I maxed out positions in ETW and ETV already and the others have similar holdings, just different levels of selling options.
Let's see what else pops up on my screener for a short list:
JPG is a cef that has a slowly uptrending NAV over the one and three year periods. So the distributions should be safe even though a chunk of it is classified as return of capital. Unfortunately, the next distribution doesn't look like it'll be until July, so I'll keep an eye on it but won't be buying at the moment.
I already wrote about GLO but am still not convinced. It's had a good year but what hasn't?
BGY is in the same boat as JPG as far as when it's next distribution will be.
BOE has an upcoming distribution. It's had a couple of big distribution cuts over the last two years. Since the last one the NAV has started to creep up slowly. That would indicate to me that the distribution cuts are over. Maybe. Again, ROC is fine with me as long as the NAV can grow. Blackrock's website states that it writes options on 45-65% of it's assets, so not as much NAV protection in a market meltdown as JPG has. Actually, it's pretty similar to EXG's option writing.
I think I'll probably finish maxing out my position in EXG on Friday with BOE as a back up option. EXG has the higher market yield and pays monthly and still has a share buyback program in place - BOE has had better NAV performance since the last dividend cut and the market price hasn't been keeping up with the NAV.
Kind of a tough call as I like EXG better but I do need to diversify out of Eaton's funds since they have very similar portfolios and there aren't too many bargains to be had right now.
Edit for 5/10 - I bought into RSO-B today under par. Unenthusiastic earnings report but they continue to make money and pay a dividend on the common stock and has > 8% yield - met my criteria. EXG moved up too much this week to make me comfortable with buying more at these levels (and I already have a nice gain since I started buying into it last November). I was really leaning towards JPG but they moved up enough this week that they don't meet my criteria. I would have bought BOE but I'm begining to get very uneasy with market run up this year - I think I'm going to be looking at half-way decent preferreds to buy over this summer until we get another market correction and cefs/reits go back on sale.
Disclosure: I am long EXG.
Additional disclosure: This article was written with out the benefit of spellcheck/grammarcheck or an internet thesaurus. It was written whilst drinking a cold Sierra Nevada pale ale.