Morning Commentary: Preferreds gaining ground as oil sees modest rebound; energy names ‘bounce’

By Stephanie N. Rotondo

Phoenix, Jan. 7 – Preferred stocks were again firming up in Wednesday trading, helped in part by a rebound in oil prices.

“Energy stocks are bouncing because oil has settled down,” a trader said, also noting that the long bond was trading off a bit.

The Wells Fargo Hybrid and Preferred Securities index was up 14 basis points at mid-morning.

In the energy realm, Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were up 47 cents, or 2.28%, early in the session, trading at $21.10. Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) were also higher, putting on 16 cents, or 1.8%, to trade around $9.04.

Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were up 22 cents, or 1.12%, at $19.90.

But while the market – and energy in particular – was experiencing a bit of a rally, trading volume remained muted, according to a trader.

“There’s really not a lot going on,” he said.

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