Educational Programming Video
The Value Line Convertibles Survey
Program 1: Introduction
In this first session in our series, we will briefly define what a convertible security is, and tell you about The Value Line Convertibles Survey.
A convertible security (which can be a bond or a preferred share) is an investment instrument that may be converted into pre-determined number of shares of another security anytime during its life span or be exchanged for cash (usually $1,000) at maturity in the case of a bond. During the period of the life of the bond, a fixed income at a stated rate of interest is paid semi-annually in most cases, or annually in some cases, to the holder. With a preferred share, things are a bit different. A stated amount of dividend is paid quarterly in most cases, and the life of the preferred is usually perpetual.
The Value Line Convertibles Survey was founded in 1971 and has been published continuously since then. With more than 90% of the domestic convertibles covered in our service, this publication can be found on virtually every professional's desk, where it is used for its evaluations and as a reliable data source. Many individual investors use the publication as well.
The convertibles recommended by our service have provided an average total return (price appreciation plus income) of approximately 19% over the past 18+ years. Our results have often been among the top investment letters for investment performance studied by the Hulbert Financial Digest.
In addition to the more than 600 convertibles followed and evaluated each week, the service also follows and evaluates 120 warrants. Unlike convertibles, which are relatively low in risk, warrants, which are somewhat like options, can be very risky. They offer greater profit potential, but their prices can swing sharply.
The Value Line Convertibles Survey is published 48 times a year and comes in two parts. Part 1, called The Convertibles Strategist, is a newsletter. It contains a lead article on a relevant subject pertaining to convertibles and the convertibles market, our weekly "buy/hold or sell" recommendations, changes in current recommendations, issues that are "Soon to be Callable," and usually a full-page report on one of our especially recommended issues. This report gives subscribers a detailed description of the issuing company's operations. Also included on a periodic basis are redemption notices, a table of upcoming new convertible issues, a list of new additions and deletions to our service, and the Convertible Bulletin Board, which carries brief news story of convertibles we cover that are involved in merger/acquisitions, tender offers, exchange offers, or other events that would directly affect the convertible security.
Part 2, the Convertibles Evaluation Section, provides facts, analysis and evaluation of more than 600 convertible issues and 120 warrants, as well as their underlying stocks. Add Value Line's heralded convertible evaluation model to the mixwhich has identified over- and undervalued convertibles for 29 yearsand you have the foundation for a convertible trading system that can be efficiently and conveniently tailored to your own personal goals and risk tolerances. In addition, you will find a complete list of rank 1 convertibles sorted for your convenience on the front page of this section. On the back page are many useful indexes used for comparison purposes in our weekly analysis
We hope you have learned something about Value Line Convertible Securities Research.
In our next session we will get you familiarized with various aspects and some of the terminology used in the convertibles environment.