Convertible securities are preferred shares, bonds or debentures that can be exchanged for common shares of an underlying company. The terms of the conversion are detailed with each security. In some cases, companies can initiate the conversion themselves if it is financially advantageous to do so.
When evaluating exchangeable or convertible securities, it’s particularly important to assess the premium-the extra cost of buying the convertible instead of the underlying stocks into which you can convert.
The premium, stated as a percentage, is the current market value of the convertible bond in excess of the current market value of the shares into which it can be converted. The premium reflects the market’s evaluation of the advantages of hanging on to the convertible or exchangeable security, rather than exercising the conversion/exchange privilege.
The size of the premium gives you some idea of how far the underlying shares have to rise before they begin to push up the price of the convertible. When a premium is high, the underlying shares need a big rise to make it likely that they will push up the value of the convertible. (To put it another way, when a premium is high, the underlying shares can move up much more quickly than the exchangeable.) When the premium shrinks down close to zero, the stock and the exchangeable can move more or less in tandem.
We feel investors should be aware of how convertible securities work. But for your common stock portfolio, we recommend using our TSI Network three-part Successful Investor philosophy for investing:
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AGILENT TECHNOLOGIES INC., $143.93, New York symbol A, is still a buy for aggressive investors.
The company makes specialized testing equipment for medical research laboratories and industrial clients. Its equipment includes mass spectrometers, used to analyze substances.
Demand for Agilent’s equipment from pharmaceutical firms, chemical makers and food… Read More
Rising prices for corn, wheat and other crops are adding to the costs of these food and ingredient producers. However, the strong position of their leading brands let them pass along these extra costs to their customers. Even so, we feel Archer Daniels and Mondelez… Read More
APPLE INC., $149.70, Nasdaq symbol AAPL, remains a hold.
New COVID-19 lockdowns at the company’s assembly factory in Zhengzhou, China will slow the production of its new iPhone 14 Pro and iPhone 14 Pro Max smartphones. That facility makes roughly 80% of those premium models.
As a result,… Read More
These U.S. consumer giants have raised their annual dividends for decades now. Even so, we feel McDonald’s “asset light” model makes it the better pick for new buying.
MCDONALD’S CORP. $257 is a buy. This company (New York symbol MCD; Income-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding:… Read More
Molson Coors continues to benefit from its purchase of SABMiller’s stake of MillerCoors. At the same time the company is grappling with slowed beer sales as some COVID-19 challenges remain.
MOLSON COORS CANADA INC. (Toronto symbols TPX.A and TPX.B) took its current form in 2005 when… Read More
Both these spinoffs are off to a slow start as they restructure their operations. We feel their moves will ultimately pay off, but it’s better to hold off new buying right now.
VIATRIS INC. $11 is a hold. The company (New York symbol VTRS; Manufacturing & Industry sector;… Read More
YELP INC., $38.23, symbol YELP on New York, lets people rate and review local businesses such as restaurants, retail stores and service providers. They do that by detailing their experiences for other patrons and assigning a business a rating of up to five stars. The… Read More
PFIZER INC., $50.11, New York symbol PFE, is your #1 Income Buy for 2022.
The company is one of the world’s largest makers of prescription drugs. Its top-selling brands include Lyrica (epilepsy), Celebrex and Enbrel (arthritis), and Prevnar (pneumonia).
Pfizer has increased its dividend rate each year… Read More
Owning the best speculative stocks in your diversified portfolio can boost your returns if selected carefully. Learn how in this article now.
A speculative stock is a higher-risk, more aggressive stock with uncertain prospects. Speculative stocks may offer significant returns to investors—but they will also have… Read More
New firms spun off from larger companies sometimes rise quickly, like Carrier and Otis. That’s probably because investors are familiar with their products and like their prospects. However, others such as Viatris and Kyndryl, are more obscure and need a few years to build a.. Read More
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
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Does TSI Network Use the Information It Receives?
"Contact Us" and Comment Features: TSI Network encourages visitors to its websites to contact us with questions and comments. Email addresses and other information of persons using these features may be collected in order to facilitate our responses to those inquiries.
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Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
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What Choices Do I Have?
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
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