MS PFD A Update: Is The Price Bottoming? My Uncertainty Results In A Hold Rating
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Retired InvestorInvesting GroupFollow5ShareSavePlay(8min)CommentsSummaryMorgan Stanley PFD A 1/1000 rating raised to Hold, but more price erosion possible. I continue to hold this issue.Both MS.PR.A and GS.PR.D offer 4% coupon floors, providing downside protection but resulting in modest fixed components.MS.PR.A carries a higher credit rating (BBB-) than GS.PR.D (BB+), with strong common equity coverage ratios for both issuers.My strategy favors callable preferreds with a lower likelihood of redemption, prioritizing stability over chasing higher coupons.Recent FOMC rate cuts have pressured payouts, with MS.PR.A's next dividend expected to decrease by $0.02–$0.03 or more if further cuts occur. designer491/iStock via Getty Images Introduction Fearing the hit, Morgan Stanley PFD A 1/1000 (MS.PR.A) would take when the FOMC reversed course from rising to cutting the FFR, twice in 2024 I cut my rating, settling at SellThis article was written byRetired Investor9.13K FollowersFollowRetired Investor has been investing since the 1980s and has a background in data analysis and pension fund management. He writes articles to help others prepare for retirement by investing in CEFs, ETFs, BDCs, and REITs. He is a long only investor and shares strategies for trading options with a focus on cash-secured-puts. He is a contributing author to the investing group iREIT®+HOYA CapitalThe group helps investors achieve dependable monthly income, portfolio diversification, and inflation hedging. It provides investment research on REITs, ETFs, closed-end funds, preferreds, and dividend champions across asset classes. It offers income-focused portfolios targeting dividend yields up to 10%.Learn more.Analyst’s Disclosure:I/we have a beneficial long position in the shares of MS.PR.A either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You