ayo888 Back in February 2012 I submitted my first article to Seeking Alpha: Pricing Anomalies in Pari Passu Preferreds Present Fleeting Opportunities. The alliteratively titled piece described my observations that two nearly identical equity issues, from the same company, were trading at disparate prices and that investors could improve both their yield and cost by swapping one issue for the other. In today’s crazy markets, similar situations seem to have become more frequent, sustaining, and actionable on a more meaningful scale. As empirical examples, I offer Two Harbors Investment Corp.’s ( TWO ) preferred B (NYSE: TWO.PB ) and preferred C (NYSE: TWO.PC ). The Arbitrage Two Harbors is a levered mREIT that is active in agency issues and mortgage servicing rights. The company’s equity capitalization is summarized in this table from Portfolio Income Solutions . Portfolio Income Solutions We have never really gone big into mREITs, but TWO preferreds caught our attention when they cratered in the illiquid market carnage of the early 2020 COVID outbreak. At that time we liked TWO.PC’s 20+% discount to par and its double digit dividend yield. In the spring of 2022 we came to appreciate the preferreds’ fixed-to-floating structure as some defense […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
