RE:RE:RE:RE:RE:RE:RE:Husky preferreds are the way to go -switch the commonYa, I think the only real risk to the Preferreds is bankruptcy. Given Book Value is I think around $16, and there's over a billion common shares vs a small amount of Preferreds, even in an event of bankruptcy, good chance residue value of Preferreds will be $25.
So.... I'm starting to think these are a buy of a lifetime. But I've been wrong many times before.
So, the "risk" is extreamly low if you plan to hold. Who wouldn't mind holding for 16% or even 10% or even 8% ........
Of coarse, depending how bad it gets, even the Preferreds dividends could be halted. But they are cummulative, so any missed dividend just accumulates.
kelsat01 wrote: The decline in prefs can be explained:
1) General selloff in a terrified market across the board.
2) Lack of liquidity in thinly traded prefs (large bid-offer differential)
3) Lower lack of risk tollerance: Holders of prefs appreciate the bond-like performance (interest rates down-stock up) and the inteneded price stability. However, this is out the window due to reason 1 and 2.
4) The lack risk tollerance means holders will sell into an illiquid market caused by 1).
5) Increased selling intin 2) conditions mean large price drop.
This however creates opportunity for those who have the stomach and risk tolerance. All the company has to do is avoid bancrupcy and all other options are positive. Meaning 400-500% increase in a takeover/privativation or a 2-3 bagger if comodity prices recover to normal levels. These risk adverse holders are awarded 16ish% to wait for this to work through the system or be bought out.