A Wild Week – A Couple Portfolio Moves
By: Tim McPartland,
A crazy stock market week in which stocks took off like crazy based on a few earnings reports–starting with McDonalds beating estimates and then continuing with Microsoft, Google (or is that Alphabet) and Amazon. Of course we hold only a limited number of common stocks so we didn’t get the benefit of the strong market and in fact part of our benefit was chewed up by holding a hedge of the S&P 500 via Proshares Ultrashort (ticker:SDS). We need to get out of this hedge as we have held it too long and in these ‘ultra’ leveraged ETF’s there is about a 1% monthly slide simply based on rolling securities over continually. We will look to move the hedge to a non levered ETF–if we decide that one is even needed–but we will worry about that next week.
We made the following moves in the 2015 Blended Income Portfolio
Today we sold our B&G Foods common shares (ticker:BGS) for a nice gain. These shares took off when news of the Green Giant purchase was announced and today looked like a good time to exit. Having worked for Pillsbury and Green Giant for near 20 years we know how difficult that business is and the likelihood that BGS will stumble is pretty high. Since the premium is in the shares we lock down the profit and will look at a re-entry down the road a year.
Today we purchased preferred shares of AmTrust Financial (ticker:AFSI-B). This issue has a coupon of 7.25% and a current yield of 7.28%. It has a 1st call date in 2019 and as a financial is non-cumulative. We don’t have an aversion to non cumulative shares as long as we deem the company fairly strong.
Additionally we purchased preferred shares of WP Glimcher (ticker:WPG-I). This issue has a coupon of 6.875% and currently trades with a yield of 6.83%. This issue which was a very low grade issue when issued was upgraded to investment grade when WP Glimcher merged with Washington Prime Group. This is now a pretty tasty investment grade issue with a 1st call date of 3/2018.
With this 1 sale and the 2 purchases we have lowered our cash position a bit–and continue to look for another 1 or 2 opportunities for next week.