Rocky’s Weekly Stock Picks
PXSAP shares got partially called. In honor of this glorious event, we’ll be focusing on preferred stocks this week.
We’ve so far realized a 24.6% total gain on our shares. Once the partial call is complete, our total realized gain will be 33.6%. If we wanted to cook the books, we could claim 51.6%, but we’re not going that far.
The real takeaway here is that buying when the price is less than the coupon value on a callable preferred stock is always a solid play.
Do we want the shares? Yes. Are we upset to randomly be forced to take profit over a year? Not in the least.
PXSAP - $24.90/share, 7.75% coupon yield with monthly distributions. Cumulative, redeemable, and convertible.
Now, at this time there’s no discount (okay, $0.10/share is enough to make a profit but come on), but the high yield and peace of mind knowing that you won’t lose your investment if called makes this a worthy buy.GOODN - $22.50/share, 6.62% coupon yield, monthly distributions. Cumulative and redeemable.
Coupon values are mostly always $25, by the way. Just thought we’d mention that.
YES, THERE ARE EXCEPTIONS (usually $10, but not always).CCLDP - $11.35/share, 11% coupon yield, monthly distributions. Cumulative, redeemable, perpetual (almost all of our preferred picks are, to be quite honest).
Coupon value -is- $25. So, getting called on these shares = instant winning.
Of course, risk does exist. Slightly less than common shares, but still exists. Also, you don’t get voting rights with preferred shares.OXCLM - $24.99/share, coupon yield 6.75%, monthly payout. Checks all our boxes, you know what’s up.
!!! BTW !!! - We are not opposed to quarterly-paying securities. However, since we use DRIP, we’re utilizing tax-deferred compound interest. 12 compounds > 4 compounds.FATBP - $15.65/share, coupon yield 8.25%, monthly payments. NICE.
The common shares are a little scary to look at, but so far we’ve ROI’d on our initial investment and look forward to getting called….which isn’t likely at this time. $$$