 One of the highest reader-rated books in the United States.
See the new Fifth Edition of Preferred Stock Investing at Amazon! |
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“Reading your book (twice), subscribing to your service and embracing your process are very positive highlights of my 'wealth management' endeavors in retirement.” Don Q., CDx3 Notification Service subscriber MORE>> |
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For New Readers... Welcome to all of the new CDx3 Newsletter readers who signed up over the last month. This is your first issue of the CDx3 Newsletter, a free monthly newsletter devoted to the interests of CDx3 Preferred Stock investors. To be sure that you continue to receive the CDx3 Newsletter each month, please remember to add the following email address to your email address book safe sender list: CDx3NotificationService@us.emaildirect.com.
This month's High Quality Preferred Stocks article describes how the market for the highest quality preferred stocks now favors buyers. Of the 18 high quality preferred stocks selling for a sub-$25 market price, four offer a dividend of at least 7 percent. Out of the 938 preferred stocks and exchange-traded debt securities that were trading on U.S. stock exchanges at the end of February 2014, our preferred stock search engine found 18 specific high quality issues selling below their $25 par value. (jump to article) The Preferred Stock News article takes a closer look at Alexandria Real Estate Equities. ARE's common stock has jumped 13.7 percent in just the last two months; a clearly unsustainable growth in value. The company's series E preferred stock may offer an alternative to those still looking to share in the company's success. (jump to article) The Special Announcement article announces the availability of the all new 5th Edition of my book, Preferred Stock Investing. I update the book every other year with the most recent preferred stock research, focusing on the conditions that preferred stock investors are expected to be facing (upward pressure on rates). Learn to screen, buy and sell the highest quality preferred stocks. (jump to article) The Preferred Stock Facts article is presented both here and on the PreferredStockInvesting.com website. Test your knowledge by clicking on any preferred stock question to see the multiple-choice answers. You will receive an automatic email that provides you with the correct answer and my explanation. (jump to article) The Free Special Offer article explains how you can now have continuing preferred stock research delivered to you for free. Why wait until next month's CDx3 Newsletter to find out what is going on in the preferred stock marketplace? Throughout the month I post regular research articles on my blog and make them available to you for free. (jump to article) Enjoy this month's issue. I look forward to reporting back to you in next month's issue of the CDx3 Newsletter. |
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18 Investment Grade, 6.5+ Percent Cumulative Preferreds Available Under $25 Preferred stock search engine finds these 18 out of 938 alternatives With a sub-$25 average price, the market for the highest quality preferred stocks now favors buyers. Of the 18 high quality preferred stocks selling for a sub-$25 market price, four offer a dividend of at least seven percent. As rates and prices move up and down over time, buyers buy when rates increase and prices fall below par ($25 per share in this case). Sellers sell those shares when rates fall again, pushing prices back above their original purchase price, enjoying seven percent (long-term average) dividends in the meantime. This is why preferred stock investing is long-term investing, taking advantage of the known inverse relationship between rates and prices over time. I define 'high quality' here as securities that are able to meet all ten of the CDx3 Selection Criteria from my book, Preferred Stock Investing. The search engine parameters seen in Figure 1 look for preferred stocks and exchange-traded debt securities (ETDs) that are currently trading below their $25 par value, pay a minimum annual dividend of at least 6.5 percent, have cumulative dividends and offer investment grade ratings from Moody's Investors Service. Currently priced below par Purchasing shares below $25 is an important consideration for many preferred stock investors. In the event that your shares are redeemed (bought back from you) by the issuing company, shareholders will receive the security's par value in cash in exchange for their shares. By purchasing shares below their par value ($25 in most cases and in all of the cases shown here), preferred stock investors are able to add a layer of principal protection to their investment while also positioning themselves for a downstream capital gain in the event of a future call. Figure 1 shows the complete filter used to find these gems. Of the nineteen parameters that can be set, the four arrows highlight the keys for this search. Setting the "Currently priced below par" parameter to "Yes" does the magic here. In addition to finding the highest quality issues that are currently trading below their $25 par value, this filter also limits the list to issues that have not suspended their dividend payments. Setting the "Dividend rate at least" parameter (center left under the Dividends heading) to 6.500 eliminates securities with very low, variable or adjustable dividend rates. And by setting "Today's price, at least" to $0.01 and "Today's volume, at least" to 1 share the filter will exclude less liquid issues (securities that have not traded today). This is just one example. Click on the filter image to see another one along with a more detailed explanation. Results Figure 2 shows the results when this search is applied to our Preferred Stock ListTM database (please note that to protect the values of subscriptions to the CDx3 Notification Service, trading symbols are obscured here). Already a CDx3 Notification Service subscriber? See page 6 of the March 2014 issue of the subscriber's newsletter, CDx3 Research Notes, that you received on February 28 for symbols. There were a total of 938 preferred stocks and ETDs trading on U.S. stock exchanges as February 2014 came to a close. Of these 938, 18 specific high quality issues are trading below their $25 par value (February 27, 2014 prices). This list is sorted by dividend rate (coupon) with the highest payers listed first. The six securities shown in green font are ETDs (bonds that trade on the stock exchange rather than the bond market and are very similar to preferred socks) while the remaining 12 securities listed are preferred stocks. All have a current market price (seen in the Last Price column) that is below their $25 par value (as shown in the Liquid Price column) and enjoy an investment grade rating from Moody's (the Moody's column). Keep an eye out for sub-$25 buying opportunities such as those listed here. The lower your purchase price, the more principal protection you'll have. The preferred stocks and ETDs listed in Figure 2 are offering some of the best choices available to you as an income investor. Please consider becoming a subscriber to the CDx3 Notification Service today. Already a subscriber? The trading symbols for this example are provided on page 6 of the February 2014 issue of the subscriber's newsletter, CDx3 Research Notes.
Learn To Screen, Buy and Sell The Highest Quality Preferred Stocks
Preferred Stock Investing is one of the highest reader-rated books in the United States with 74 reviews posted at Amazon. A new edition of Preferred Stock Investing is published every other year in order to keep up with current market trends and research. The new Fifth Edition addresses selecting, buying and selling the highest quality preferred stocks during the market conditions that we are expected to face throughout 2014 (upward pressure on rates). See: Reviews | Table of Contents | Free Excerpt | Paperback | eBook Preferred Stock Investing includes the information, websites and other resources needed for you to be a very successful preferred stock investor. The Fifth Edition is now available at your favorite online retailer. For those who would rather someone else do the research and calculations, I offer the CDx3 Notification Service. Subscribers to the CDx3 Notification Service receive an email alert whenever a new preferred stock or exchange-traded debt security is introduced. Subscribers also receive their own non-promotional preferred stock research newsletter every month, have their own website that hosts the Preferred Stock ListTM database and have access to the CDx3 Discussion Group, the only online forum just for preferred stock investors. Invest in the best. Subscribe to the CDx3 Notification Service today. |
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Alexandria Realty's Common Stock Too Hot to Handle But is ARE's Preferred Stock Worth Consideration? Alexandria Real Estate Equities, (NYSE: ARE) finds itself riding the baby boomer bubble like few others. One-third of the U.S. population (about 100 million people) started retiring three years ago and 10,000 people in the U.S. turn 60 years of age every day. Alexandria is a REIT that specializes in buildings for life science tenants (pharmaceuticals, medical research, biotech, medical devices and the like). Figure 3 shows ARE's tenant mix as of December 31, 2013. Occupancy of Alexandria's North American facilities has climbed to 95.9 percent at the end of 2013, up from 94.6 percent a year earlier. As demand for such facilities has increased, so has the value of ARE's common stock. Now with a market cap exceeding $5 billion, the 20 year old company's common stock has jumped by 13.7 percent since January 1. That kind of value growth, while impressive, is clearly unsustainable which is why in a February 5 report, Zacks Equity Research issued a Sell warning to investors stating that ARE is overbought. Alexandria preferred stock While the explosive growth of ARE's common stock value represents principal risk to today's buyers, investors looking for a lower-risk route to participate in Alexandria's success may want to consider the company's preferred stock. Alexandria's series E preferred (ARE-E | prospectus) pays a 6.45 percent annual dividend (coupon) and is currently priced at $23.88 (February 28, 2014). This $1.12 discount to the security's $25 par value provides today's buyer with a current yield of 6.75 percent which compares favorably to the common stock's 3.7 percent yield. ARE-E offers a Moody's investment grade rating of Baa3 and cumulative dividends (meaning that if Alexandria misses a dividend payment to you, they still owe you the money; their obligation to you accumulates). Risk versus reward Using the Moody's rating scale as a proxy for investment risk and current yield as a measure of reward, Figure 4 illustrates how ARE-E is positioned within the U.S. preferred stock marketplace. Each diamond on this chart is a U.S.-traded preferred stock. The criteria used to include securities for the chart are provided in the footnote. Notice how ARE-E stacks up against its other Baa3-rated peers. ARE-E's current yield of 6.75 percent compares favorably to the average return of 6.53 percent at the Baa3 level. What's next? After a 13.7 percent value increase in just two months, the notion that a downward correction is due for Alexandria's common stock seems reasonable. Given that risk to principal, the company's far less volatile preferred stock may be a safer bet for risk-averse investors. And the 6.75 percent current yield far outstrips the common's 3.7 percent performance. But with a coupon of 6.45 percent, today's buyers may be holding ARE-E shares for several years. The security does not become callable until March 15, 2017 and rates would have to fall before it started to make sense for Alexandria to redeem these shares (shareholders will receive $25 per share in cash in the event that the company's does so). While Alexandria's series E preferred stock offers less principal risk and a higher current yield when compared to the company's common shares, today's buyers are likely to find themselves holding their ARE-E shares for longer than they want to. For others, however, the 6.75 percent current yield that they earn in the meantime would be pretty easy to warm up to.
More Preferred Stock Research FROM DOUG K. LE DU Click any headline
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Fifth Edition of Preferred Stock Investing is Now Shipping! Learn how to screen, buy and sell the highest quality preferred stocks
A new edition of Preferred Stock Investing is published every other year in order to keep up with current market trends and research. The new Fifth Edition addresses selecting, buying and selling the highest quality preferred stocks during the market conditions that we are expected to face throughout 2014 (upward pressure on rates). See: Reviews | Table of Contents | Free Excerpt | Paperback | eBook The preferred stock market has returned to a market favoring buyers - higher dividend income available for lower prices. The new Fifth Edition has 21 chapters organized into six Parts over 334 pages. Here are some highlights: - Part I, "The Preferred Stock Market," introduces a new suite of charts and metrics specifically designed to measure and track the preferred stock marketplace. - Part III, "Buying the Highest Quality Preferred Stocks," includes several new chapters such as "Buying 'Fed-Free' Preferred Stocks," "Keeping Up with Increasing Interest Rates" and "Buying Less-Than-Perfect Preferred Stocks." - And chapter 8, "Managing the Risks," has been completely rewritten and expanded to include risks that are unique to preferred stocks during the increasing rate environment that awaits us. You can pick up a copy of the new Fifth Edition of Preferred Stock Investing at your favorite online retailer such as Amazon (paperback) or directly from BookLocker, the book's publisher (BookLocker provides paperback and PDF eBook formats). |
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Test Your Knowledge With These Preferred Stock Facts!
Clicking on any of the below questions will open a new window on your screen. Each question is presented with multiple-choice answers. Test your knowledge by submitting your best guess and I will automatically email you my analysis with the correct answer (and no spam, ever).
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 Preferred Stock Market Research Now Available All Month Long - Free Automatic Email delivery of preferred stock market research now available Readers do not have to wait until next month's issue of the CDx3 Newsletter to stay plugged into the market for high quality preferred stocks. Preferred stock research articles, marketplace observations and preferred stock news from the financial press and other information are posted to the Preferred Stock Investing Reader's Forum (my "blog") throughout the month. To receive articles by email automatically without having to visit the Forum, click here A separate window from FeedBurner (a Google service) will open on your screen. Enter and verify the email address that you want articles from the Forum to be emailed to as instructed. And don't worry - you'll never receive any spam from me and your email address will not be shared. By receiving the articles as I post them via email, you do not have to visit the Forum in order to stay plugged into my research regarding the marketplace for the highest quality preferred stocks. Please accept my invitation to receive articles by email and visit the Forum. |
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Chapter
17 of Preferred Stock Investing
includes a list of all of the CDx3
Preferred Stocks issued since January
2001 and the investing results you
would have achieved had you invested in
them using the CDx3 Income Engine.
Please
take a look at
www.PreferredStockInvesting.com.
And if you
know
someone who might be interested in simple
investing
for non-experts please have them
sign up for this free monthly preferred
stock research newsletter
at
www.PreferredStockInvesting.com.
They will automatically
begin receiving this monthly CDx3
Newsletter
next month (plus a
CDx3 Special Report) - all FREE. Many Happy Returns, Doug K. Le Du |
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Copyright (c) 2014 by Del Mar Research, LLC. Preferred Stock List, CD Times 3, CDx3, CDx3 Income Engine, CDx3 Investor, CDx3 Portfolio, CDx3 Preferred Stock, CDx3 Perfect Market Index, CDx3 Bargain Table are trademarks of Del Mar Research, LLC. All rights reserved. DISCLAIMER: The content of this CDx3 Newsletter is to be regarded as educational, rather than advisory. There can always be exceptions to trends and/or generalizations that may be discussed herein. Consider your financial resources, goals and risk tolerance before investing. You, and not Del Mar Research, LLC, are solely responsible for your own investment decisions.
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There's
a lot to like about preferred stocks. And many aspects of selecting,
buying and selling the highest quality issues are misunderstood.
Here are a few frequently asked questions that illustrate some of
the more subtle points of preferred stock investing.
