This is really not an investment but a purchase of a Jr subordinated debt security. That not with standing yesterday on a 1.6% price drop on the cusp of the semiannual distribution ex date I picked up 100 of the MJV. With a cost basis including commission of $22.95, that is an 8.71 distribution yield against the 8.5% discount to par value. Of course as these unlike a bond trade flat I now have a dividend capture as the ex date is less than a month away for a six month distribution. If this security is to go as high as $24.50 on the ex date growing near then I can sell it and buy it back after the ex date for about the same price level I just entered at. Should it lose 75 cents to a buck before the ex date I can just add another 100 shares and capture the dividend for both positions.
DPL first came to my attention shortly after the March lows. A Richard Bland of the Newsletter "Profitable Investing" was doing some free internet discussions of some of his themes of dividend growth investing and GARP investing. He ranked DPL ahead of TEG and XEL as for ranking some utility picks he was recommending and favored in the coal fired power sector. I suppose I will take a lok at and maybe watch list XCJ? Some of the best of these energy related preferreds have really been out performers as of late even as the market has declined for 4 weeks now. The REP-A appears heading for redemption. The just recently floated WLL/pA took the usual post IPO dive down to below $90 and just in the last week as the market was getting knocked down again, it was back up to $96.50 Longer term though it seems improbable that many of these 7-9% preferreds can get back to and trade at a premium. The converts seem to be an exception. I really have cleaned up on the HCN-PRG as I picked up on an internet tip/bug that proposed HCN would be chosen for the S&P 500 to replace Sovereign bank, which before it's failure was bought out by the Spanish Banco Santander. Got a great position started down in the low $20s. Then it got added to the S&P 500... bada-bing! Now it is trading well above par with a $27 handle. I am hanging on to it nearer to the conversion. the ADM-pA is another convert that has been OK and that I have traded some in. It is now in the low end of the trading range of $36.50/8.4% but a sell above $39.60. I think I should be able to knock down another 100-200 below $35 on a market move to near 825 S&P which is where we seem to be heading. The preferred ETF and CEFs like PFF, PDT, and HPS seem to be holding up their share prices quite well in this market sell off. Perhaps almost all the junk has been wiped out but then there are the commercial real estate and the Hotel preferreds. You can forget them they are going down the tubes.