Monday
Sep182006
B & G Foods: Cutting Back Position on Income Securities
September 18, 2006 at 9:58 AM
I bought B & G Foods (BGF) early in 2005 as part of an income play at around $15. When the price fell I continued to accumulate it. For a while I thought I was a victim of that rookie trader strategy of "Averaging Down". I had a fundemental and long term interest in the stock, did not buy beyond my personal limits and today at $19 I had to sell.
A little trading tip, don't use round numbers when trading, that's a sucker's game every specialist likes to take advantage of. I put my limit price in at $18.99 and sold there.
At a forward p/e of 15, it's time to lighten up on B & G Foods - maker of syrups, Emeril's Original, Ortega Chile and other branded food staples. After all, this is an Enhanced Income Security not a straight equity. I think that the management is good and I like the incentives in the contract they have to increase dividends. But the upside is not here for holders like it would be for a regular equity. I am not selling all my position, just lightening up a bit and I am going to do more research. The security still yields over 9% between the bond and equity yields. Either higher interest rates, a waning of the current interest in food stocks or a general market correction will give me the opportunity to buy back these shares at a lower price.
Disclosure: I own B & G Foods Inc for both my IRA, Taxable Account, and my relatives' accounts. At a price of $19 I may either sell more or hold what I have depending on my research. The B & G I sold was for my personal taxable account, I have not sold for any other accounts just now.
Disclaimer: Nothing in this web log is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult your own investment professional before buying or selling any security.
A little trading tip, don't use round numbers when trading, that's a sucker's game every specialist likes to take advantage of. I put my limit price in at $18.99 and sold there.
At a forward p/e of 15, it's time to lighten up on B & G Foods - maker of syrups, Emeril's Original, Ortega Chile and other branded food staples. After all, this is an Enhanced Income Security not a straight equity. I think that the management is good and I like the incentives in the contract they have to increase dividends. But the upside is not here for holders like it would be for a regular equity. I am not selling all my position, just lightening up a bit and I am going to do more research. The security still yields over 9% between the bond and equity yields. Either higher interest rates, a waning of the current interest in food stocks or a general market correction will give me the opportunity to buy back these shares at a lower price.
Disclosure: I own B & G Foods Inc for both my IRA, Taxable Account, and my relatives' accounts. At a price of $19 I may either sell more or hold what I have depending on my research. The B & G I sold was for my personal taxable account, I have not sold for any other accounts just now.
Disclaimer: Nothing in this web log is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult your own investment professional before buying or selling any security.
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