We have found one bond among more than a dozen issued by these two newly merged companies that we consider well very protected from the financial perils that the new company might experience. And because of this, it has an extra high yield, which can lead to extra high profits.
In the midst of the market tumult and a broken merger, this company’s bonds felt a sharp decline in price. For analyst Martin Fridson this distress has created a very appealing new opportunity.
This issue features of one of the largest and best-known online education companies in the world. The bonds declined 75% from their highs as the business stagnated in 2023 but now offer good value. As we detail in the analysis, these are speculative bonds with a meaningful chance of gain, a possibility of bankruptcy, and a real chance of loss.
The issue will feature a prominent U.S. airline whose bonds trade at a steep discount. It’s a company with nearly 25 years of success and an industry-best customer-service record. Plus, we include an equity that provides some downside protection and lots of upside.
In this issue, we’ll examine one of the few solid internet companies that escaped the dot-com carnage. This online merchandiser has a capital efficient business model and almost 10 years of impressive growth, making this bond a bargain at the right price.
Speculators are betting heavily against the price of 10-year U.S. Treasuries. It’s the second-largest short position since the CFTC began keeping records in 1992. History tells us this type of extreme positioning means bond prices are headed higher…
If the Federal Reserve is ending rate hikes, that means we’re reaching peak interest rates. And if you’re a bond investor, that’s a huge deal… because, if the coupon payment on sovereign debt isn’t going higher, soon you won’t be able to lock in today’s high yield.
Our latest addition to the Porter & Co. Distressed Investing portfolio is a bond that is secured by the assets of the largest owner of radio stations in the United States. It’s trading at a 17% discount to its $1,000 face value.
Below, you’ll find the latest market and portfolio update from our Director of Distressed Investing, Martin Fridson. We’ll release an update two weeks after each monthly issue. (Martin will also include his trademark short introductory poem.)
America is not yet lost. But we are very close to the complete collapse of not only our financial system, but our entire way of life.