7.6% Or 7.9%? These Yields Only Exist Because The Liquidity Failed

There are two series of preferred stocks that went from solidly attractive to exceptionally attractive. Each sells at a much cheaper price than they have traded over the last few months. Both come from large mortgage REITs with strong coverage ratios of common equity to preferred equity. When this article goes public, execution may become more difficult. Never use a market order on preferred shares.

I calculate the stripped yield each week, which adjusts for the impact of dividend accrual. Over the last weekend, preferred share prices on average had moved to more attractive levels. With higher interest rates in the economy, yield sensitive instruments tend to decline a bit. However, the current decline is not even remotely efficient. Two Major Bargains: The biggest two bargains right now are shares of AGNCP and shares of NLY-D. When I covered NLY-E, the piece brought in high page views and NLY-E corrected to remove the persistent discount it was holding relative to the other shares.

Source: Seeking Alpha

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