Gladstone Investment Company and Cowen Group–More Model Buys

We are adding 2 more positions to the model portfolio (as well as personal accounts).

As we continue to look to shorten durations (as noted yesterday when buying the Triangle 7% Senior Notes and many other times in our writings) 2 newer issues fit the need.    Both theCowen Group 8.25% Senior Notes (ticker:COWNL) and the Gladstone 6.75% Term Preferred (OTC Temp Ticker: GDVPP) shares work to shorten our portfolio duration.  The Cowen shares mature in 2021 (and earlier optional redemptions with a ‘make whole’ premium) and the Gladstone term preferreds have a 2021 mandatory redemption (and a 2016 optional redemption).

The Cowen Group shares could have been bought cheaper a week or 2 ago–but we weren’t paying close attention and notes from readers woke us up to the trading.  While it is 70 cents above par we still are buying because the 8.25% coupon makes it worthwhile.

It is noted that neither of these should be considered as quality issues–they are NOT.  The Cowen Group notes pay a tasty interest payment for the risk and Gladstone is a BDC which is governed by leverage rules from the SEC–thus both, while low quality, have some facets of protection.

NOTE–we had trouble placing orders for the Gladstone shares in our Fidelity account, but were able to place orders with the eTrade account.