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

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

[RagingBull3]

Dispite what I said/think, I must be missing something.  The Market does not think the same, it sent these shares down here for a reason.     I can not think why, I asked the board, but have not heard a good reason why the shares are down here.

I guess prepare to pick some more up at a lower price.

RagingBull3 wrote: Yes, these Preferreds are basically a bond.    At current yeilds I guess liquidity not a problem because once you get your hands on them you be crazy to let them go. 

They are called shares but really they are more like bonds.  

kelsat01 wrote: 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.