Post by
Carena on Feb 10, 2024 9:33am
BPO Prefs - Saturday Morning Musings
Good morning,
A pretty stable and quiet week for the BPO prefs but not the week I was expecting. I expected more enthusiasm after the BPO filing on its NCIB activity.
My takeaway is that it seems like BPO is still sitting on the bid, but I think there is a rule when a company is buying they are not allowed to bid up the share price (uptick rule?) and therefore as long as there is willing sellers of like 3,000 shares a day at current prices, then it is what it is?
If this is true, it might take a few months of BPO filings of 600,000 shares per month to set the bar for higher prices, all other factors constant.
Or maybe the BPO share prices at current yields reflect an an appropriate adjusted return. For example, the BPO N series which I own is yielding a 10.5% relative to the BN J series which I also own is yielding 7.6%.
Anyways, I am still very long and looking forward to the March dividends!
Have a great day,
Carena
Comment by
tylerreddick on Feb 10, 2024 9:41am
My "T"s are paying around 13%, and I really don't care what the unit price is, as I have no intention of selling something with a tax-advantaged yield of that magnitude. The unit prices will rise once interest rates start falling. If GICs get back in the 3% range, 13% is going to look pretty darn attractive.
Comment by
Carena on Feb 10, 2024 10:20am
Hi there, I totally agree with you. I do think the activity of market participants is healthy to think about though. All the best, Carena