7% Preferred Shares Have A Material Disconnect

We view this preferred shares as having a risk rating of 4. Its preferred shares are better suited for traders. We believe they carry to much risk to be a good fit for buy-and-hold investors. One of the three preferreds is significantly better than the others at recent prices.

Invesco Mortgage Capital (IVR) has three preferred shares will be covering: (IVR.PA), (IVR.PB), and (IVR.PC). We will refer to these as IVR-A, IVR-B, and IVR-C in the article. We believe that IVR’s preferred shares carry a risk rating of 4 and are better suited as a trading security. We see these shares as having too much risk to be an optimal fit for the buy-and-hold investor. IVR-A and IVR-B would both have to be under $24 for us to issue a buy rating. However, IVR-C is already below $25 and has the better metrics. IVR-C is well into the hold range and would only need to fall $0.51 for us to upgrade to a buy.

Source: Seeking Alpha

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