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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (56278)11/25/2015 6:35:05 PM
From: E_K_S  Read Replies (1) of 78717
 
I like the steel idea and have been looking at the common shares of several companies. GGB and X came up on my list but I excluded both for various reasons. Using the bonds you get exposure to the industry w/ less risk especially if you plan to hold these to maturity.

I want to build up my income portfolio w/o going into anymore MLP's (in fact would like to eventually reduce my MLP exposure). It seems like this could fit in well w/ that premise.

Have you looked at any other short term high yield 'value' bonds in other sectors like Solar/renewable energy and/or distressed autos like in VW? There is a lot of capital floating around from all the QE which I believe has impacted the bond market, specifically corporate bonds (now priced at unreasonably low levels to the original PAR issue).

If the Fed does raise rates very slowly over years not months, there could be some value buys. I think you are in the right price range (eg $0.70/100 or higher) as that is the 'sweet spot' for pricing w/ a good risk/reward for payoff at PAR.

My purchase of SUV corporate bonds (Super Value) was in that price range w/ similar maturities. YTM was around 25% w/ 3 years. 50% of my bonds got called early and paid at PAR and the other 50% get paid off at PAR in May 2016.

EKS
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