>>Before you buy, make sure you know where the bonds are trading. This looks much lower, and even then, then bonds look like a better play ... maybe. <<
Sr K -
A good point. Funny you should mention bonds, too, because I bought some CNC bonds (CNC-H) a couple of years ago for an aged relative's income account. They were paying out at more than 9%, and it seemed like a good choice.
Today the face value of those bonds is around 65% of what it was when I bought them. Earlier this year it was less than 50%. But I haven't sold them because they still pay the same quarterly interest payment amount. That is, the quarterly amount is the same, but relative to the face value of the bonds, the interest rate is now much higher. Over 16%, currently.
I can't sell them, because I can't buy anything with that amount of cash that would provide that much income for the Aged R.
Hadn't thought about trading the bonds, but it might not be a bad idea. Their 52 week low is 11.56 and the high is 23.20. They recover quite nicely whenever things are looking good for CNC.
Since they do pay 9.44% interest, it's a low risk investment. If you buy them and they drop in value, you can hold and still get close to a 10% annual return. That is, as long as the company remains solvent.
- Allen
PS: I've never bought CNC common, but I'm thinking about it now. |
