Q: I have read your comments on ECN. But with the debentures (ECN.DB.B) yielding over 9% and the preferreds (ECN.PR.C) over 13% someone hold my hand!
5i Research Answer:
The company's business is highly sensitive both to rates and the economy. In addition, small caps have been crushed in the past six months. It is the trifecta of bad news right now. ECN is still paying its common share dividend, which could be stopped to protect preferreds/bonds. Its recent JV brings in cash. Earnings are expected to recover strongly next year. There is still plenty of risk here, but the yields do reflect a lot of embedded concerns.