Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

RE:RE:RE:Husky preferreds are the way to go -switch the common

[kelsat01]

Yes, liquidity/volume is an issue with preferred shares, but that presents opportunity for those who are selctive and patient. 

IMO, investing in, or trading into the prefs, is the best strategy becasue in a cash tightening regime because the common is likley to be cut where the prefs will not unless it is about to go bankrupt.  Therefore if you think HSE survives, the pref dividend is safe.

Prefs perform like bonds and equity at various times.  For instance when interest rates drop (like today) bonds go higher and thus so should prefs.  

The other benefit is that during tough times, consolodation can occur within the industry.  If HSE is acquired or take private (which can happen during these opportunistic times), the prefs will have to be cashed out at par value $25. That is when they perform like equity.

If you believe a buy out or privatization is possible,  the lowest priced prefs will benefit the most from a percentage increase. 

For example:
IF (mighty big word for only two letters) HSE is taken private say 50-100% premium (pick your number). The premium/increase you recieve is not really known. However if you own say the Pref.B at $5, then that is a 500% increase. And you are paid 16.8% to wait.