Friday, August 26, 2016

Lets follow the Insder's lead

August 26, 2016

At least one JC Penny's insider is buying stock.
I like their debt better than their stock. At $19 a share, PFH is yielding 10% annually.  That gets my attention.

PFH is a  Corporate Asset Backed Corp., CABCO Trust Certificates, principal amount $25 per trust certificate. The underlying securities are the J.C. Penney Co. Inc. 7 5/8% debentures due 3/01/2097. The certificates are redeemable any time at the issuer's option at $25 plus an additional redemption premium amount based on the present value of the remaining scheduled payments based on a certain benchmark interest rate plus 20 basis points which appears to make the actual redemption of these securities unlikely prior to the maturity date. The certificates pay distributions $1.90625 per annum semiannually on 3/1 & 9/1.

It can't be called for less than $25, and doesn't come due until March 2097.  We could be collecting money from this one for 80 more years. 

This debt was investment grade when issued in March of 1999, but is currently rated CCC (junk), so don't go crazy and buy more than you're willing to risk.