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Deep Value Insurance Company Bond Play...


BargainValueHunter
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Does this fall into the "too hard" category?

 

http://www.streetauthority.com/a/2-ways-profit-deep-value-stock-458036

 

The Phoenix Co. Inc. 7.45% QUIBS (NYSE: PFX) (Quarterly Interest Bonds) currently trade around $19.00 a share with a par value of $25. That puts the current yield at about 9.8%. Not bad. The "baby bonds" (named so because of the $25 issue price as opposed to the traditional $1,000 face value of a regular bond) are callable at any time within 30 days at par. That's a 30% pop if called. Throw in the yield, and that's a boastful total return on a bond.
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For me it is too hard.  I ask myself would I invest in Pheonix first?  Then find something in the capital structure that is cheap.  I would not invest in Pheonix (a leveraged life insurer that does not have a good track record) to begin with so investing in the bonds is no different from the company or stock.   

 

Packer

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For me it is too hard.  I ask myself would I invest in Pheonix first?  Then find something in the capital structure that is cheap.  I would not invest in Pheonix (a leveraged life insurer that does not have a good track record) to begin with so investing in the bonds is no different from the company or stock.    

 

Packer

 

Had a tiny bit of their stock that was received as a result of their demutualization in the early 00's.  Looked at their BS, and it was loaded with questionable MBS.  Got rid of their stock.  Looked at them a couple more times before the crisis.  Same story.  They reached for yield, and did not manage their investments prudently.  Their annuities had tail risk.  I'm surprised that they survived the financial crisis, but haven't looked at them in recent years.

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