May 28, 2014 Comments

On Wednesday the S&P 500 was down 0.1% and Toronto was down 0.3%.

Toll Brothers rose 2.1% after releasing strong second quarter earnings.

Onex (which we had rated only a Speculative Weak Buy at $62.00 rose 4.3% to $67.70 after releasing earnings.

It will likely take a another day or so for the market to digest the earnings reports of both of these companies. I will plan to update these reports soon.

Canadian Tire was down 1.8% at $103.23. I plan to enter an order to buy back some of the shares I sold.

In terms of preferred shares the three five year rate reset preferred shares that I had bought earlier this year (and then sold out of two of them) all fell in price today. These were Canadian Western Bank CWB.PR.B, National Bank NA.PR.S 4.1% series 30 and Enbridge ENB.PF.A 4.4% series 9. (I also have the very similar ENB.PF.C series 11)

The Enbridge Pref. ENB.PR.A fell to $24.97. I already own this one having paid $25.00 for it. So this seems attractive given that interest rates are now lower than when it sold at $25.00. 4.4% is not a great yield but may be a reasonable substitute if one is holding excess cash. In buying these I would not do it unless prepare to hold for five years if necessary. (I don’t want to buy and then sell at a loss, so if they fell I would likely then want to hold until maturity and hope to get $25 when the rate resets.

TD Waterhouse continues to fairly bombard me with emails about various new issues. The pace of new issues seems to be some multiples of what it was for most of the past year or two. Investors should be a bit cautious to be buying shares at a time when so many companies seem eager to sell shares. Most of these new issues I ignore but these rate reset preferred shares seemed relatively safe. The yields are not great at all but I consider them to be relatively safe.