Update CUSIP: 708130AD1
music selection: “Limelight” — Rush
I purchased the 1JUN2020 maturity 5.650 coupon JC Penny bond on 19JUL2019 for 89.9120 cents on the dollar. If held to maturity, the expected yield is about 19.16%. I hope to do better by selling early and capturing my capital gains. I have a good till canceled order open at 97 cents on the dollar.
I have noticed that the bond has become range bound. It recently had bids above my ask (the bid/ask on bonds are not necessarily firm offers and may be an “expression of interest”). But the bonds have also traded recently below 93. I am updating guidance.
BUY CUSIP 708130AD1 up to 93; sell above 97.
Buying today at 93 would produce a 17.84% yield to maturity, which is a very good return for just waiting on short term capital gains that are nearly a mortal lock. There maybe two to three opportunities to flip this bond for spectacular short term gains.
Devour your prey raptors!