PFFA: Best Among Its Preferred Share Peers (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Since my last 'Buy' update, PFFA has underperformed the S&P 500 but trounced other preferred share ETFs' performance on a total shareholder return basis.
• A dovish rates environment is more favorable for equities over the preferred share class. But PFFA's leverage, active management, and fixed-to-floating preferred share mix may help it outperform its peers.
• PFFA is trading close to NAV fair value and its relative technicals seem to be in a limbo state with neither a strong show by the bulls nor the bears.
• Delinquency rates in PFFA's overweight real estate sector are a key risk to monitor.
• With a 9% dividend yield, I think PFFA is one of the better high-yield investments for income-focused investors. But for investors aiming to beat the S&P 500, I can't see enough to justify a buy here.

Read the full article here.