Author Topic: ORH.A Today  (Read 11575 times)

Grenville

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Re: ORH.A Today
« Reply #10 on: February 04, 2009, 01:15:09 PM »
Thanks for the heads up! It's hard to pass up a <10% dividend with a discount from par of <40%! I bought some ORH.A today.

my previous id on the MSN board: masterP3250




Myth465

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Re: ORH.A Today
« Reply #11 on: February 04, 2009, 02:04:25 PM »
thanks for the updates i got in at 17.25

basl1

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Re: ORH.A Today
« Reply #12 on: February 04, 2009, 03:39:08 PM »
 :o For those of us who do not know, why is this share so special?

zarley

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Re: ORH.A Today
« Reply #13 on: February 04, 2009, 04:23:20 PM »
:o For those of us who do not know, why is this share so special?

Currently offering close to 12% in dividend yield and has the potential to be called by Odyssey for $25 after October 2010.  Best case scenario, you get ~$4 in dividends and a ~$7 capital gain by the end of 2010 if they call it asap (64% gain in ~two years).  Worst case scenario, you get a 12% dividend indefinitely from a well run and well capitalized company, which is majority owned by Fairfax.  It won't be a homerun, but I see it as a very safe bet that offers a good to very good return.

Here's a link to the issue prospectus: http://www.sec.gov/Archives/edgar/data/1137048/000090956705001607/t18226e424b5.htm








StubbleJumper

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Re: ORH.A Today
« Reply #14 on: February 04, 2009, 04:57:53 PM »
At these prices, I wonder whether ORH is buying on the open market?  They bought piles and piles of their common shares at 0.9-1.0 X BV over the course of 2008.  It would seem like a no-brainer to me for ORH to be scooping up their preferreds at current prices. ??? ??? ???  Heavens!

basl1

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Re: ORH.A Today
« Reply #15 on: February 04, 2009, 06:15:21 PM »
:o For those of us who do not know, why is this share so special?

Currently offering close to 12% in dividend yield and has the potential to be called by Odyssey for $25 after October 2010.  Best case scenario, you get ~$4 in dividends and a ~$7 capital gain by the end of 2010 if they call it asap (64% gain in ~two years).  Worst case scenario, you get a 12% dividend indefinitely from a well run and well capitalized company, which is majority owned by Fairfax.  It won't be a homerun, but I see it as a very safe bet that offers a good to very good return.

Here's a link to the issue prospectus: http://www.sec.gov/Archives/edgar/data/1137048/000090956705001607/t18226e424b5.htm


 ::) Thanks so much. Good opportunity here






Hawks

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Re: ORH.A Today
« Reply #16 on: February 04, 2009, 08:53:16 PM »
Also bought some ORH Preferreds in last 2 days.  Question: any other Preferreds out there, in Canada or U.S., that present real value and opportunity in this environment?

StubbleJumper

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Re: ORH.A Today
« Reply #17 on: February 05, 2009, 12:18:46 AM »
Question: any other Preferreds out there, in Canada or U.S., that present real value and opportunity in this environment?

Gosh, that's a tough question.  There were many opportunities in November and December, but I have not seen too many 50 cent dollars in the preferred market.  There are, however, a few issues that provide an opportunity to earn a solid (but not spectacular) return. 

ORH.A is one of these.  Assuming that they are never called and the company never runs into any serious trouble, a purchase of ORH.A today would have provided the purchaser with a perpetual dividend of about 11.75%.  You're not going to get rich quickly by investing in something like this, but historically it is a reasonable return on capital for a long-term hold.  If ORH should elect to call their preferreds, then the return will be spectacular!

On the other board, I made reference to having established a position in Harris Preferred Capital Corp (HBC-), which is a wholly owned subsidiary of Harris Bank, which itself is a wholly owned subsidiary of the Bank of Montreal.  Assuming that BMO maintains its ownership of Harris and that BMO itself does not run into any trouble, a purchase of Harris Preferreds today would have provided the purchaser with a perpetual dividend of about 13%.  Again, it's not a moonshot, but historically it would be a nice, tidy return for an investment in a Canadian bank!  Again, if it should get called the return is better.

I have also taken a small preferred position in the Co-operators (TSX:CCS-C) when prices were lower than what they are today.  The Cooperators are a small company that have been selling P&C insurance in Canada for 50 or 60 years.  I was able to purchase their preferreds in December at CDN$11/share which provides a dividend yield just north of 11%.  For a Canadian investor, these dividends are treated very favourably for income tax purposes.  I'm not going to get rich off this, but it is a healthy return from a simple, well established business.  Prices have since risen, and yields today were roughly 9 percent.  Again, if the shares get called (as previous issues have in the past) then returns will be better.

None of these are home runs, and I certainly would not put a large percentage of my portfolio into them.  However, assuming that we don't have rampant inflation, 5 or 10 years from now I anticipate that I will be quite satisfied with the results from them. 

I have one more security of this type that I am currently considering, but as it is thinly traded I will withhold disclosure until I have made a final purchase decision.....and then I will probably post something to the board for feedback or derision!

SJ

kmukul

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Re: ORH.A Today
« Reply #18 on: February 05, 2009, 07:34:01 PM »
where do you find information on the preferreds for example what price and when can they be called? Can the dividend be cut for the preferreds or is it a liablity of the company to pay predefined preferred div unless they go bankrupt.

Stone19

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Re: ORH.A Today
« Reply #19 on: February 05, 2009, 08:30:49 PM »