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3 High-Income Plays That Just Sold-Off

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If you like high income and attractively discounted prices, this article has 3 ideas for you to consider. The ideas range from equity CEFs to bonds to high-yield BDCs, but they all have two things in common: (1) high income, and (2) attractively discounted prices. Without further ado, here is the list...

 


1. Nuveen Real Estate Income Fund (JRS), Yield: 8.3%

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This particular Closed-End Fund ("CEF") offers a big 8.3% yield, and its attractive shares have just sold-off--but probably not in the way you think. It currently trades at an attractive, and usually large, discount to its net asset value (this is the sell-off we're referring to). If you like high-income and less downside risk, this one is worth considering. Our full article on JRS (see link below) explains why it presents a very attractive buying opportunity, and we also review the risk factors that investors should be aware of. You can view the full article here...


2. CBL & Associates (CBL) High-Yield Bonds, Yield: 8.2%

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B-Class Mall REIT, CBL & Associates just announced earnings yesterday, and the market was NOT happy (see: CBL & Associates tanks after Q2 conference call). Specifically, as the company continues to struggle in recovering from some high-profile retailer bankruptcies and store-closings, management suggested on the call that it may consider a dividend cut next year).

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However, it's not the equity shares we're interested in (we have zero interest in owning this stock)... We like the bonds. CBL will cut the dividend on its common stock (again) just to free up cash to support the bonds if they need to because bonds are higher in the capital structure. In essence, CBL's common dividend provides some cushion on its bonds. Further, this company isn't going to just die overnight; its properties continue to generate enormous amounts of revenue, and we think these bonds continue to make payments, and ultimately pay off at par at maturity, which means in addition to the attractive coupon payment, bond investors will also get some price appreciation too because the bonds trade at a discount. We wrote about this trade in detail in this report:   

And you can view the latest price action on the bonds in the following chart. If you are looking for high yield (and a little price appreciation too) CBL bonds are worth considering.

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. Oxford Square (OXSQ) BDC, Yield: 11.9%

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In our previous full detailed write-up about this big-dividend BDC, we noted its attractiveness, but concluded that we'd consider buying on a significant sell-off. OXSQ has since been selling-off, and the shares are increasingly tempting and attractive.

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We haven't pulled the trigger yet, but we're watching closely for the right opportunity. Here is our previous write-up from just a few weeks ago...

Conclusion:

High-income securities can often prove some protection against market volatility. Specifically, because of the steady income they pay out, their price tend to rise and fall less (and the high income payments are nice too). In particular, if you like high income and discounted prices, we believe the ideas highlighted in this article are attractive. Generating lots of income at unusually low prices is always interesting to us. For your reference, you can view all of our current holdings, and our continuing strong track record of performance here.

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