Unlocking Higher Yields: HFRO Preferred Stocks Offer 8% Returns

HFRO offers an alternative to common shares with its preferred stock, yielding 8%. The company's stock has been volatile due to various factors, including a failed merger attempt and a history of financial struggles. However, the preferred stock offers a higher yield than the common stock and provides a more stable return. Investors should consider the risks and benefits before investing in HFRO's preferred stock.

Highland Funds I - Highland Income Fund, symbolized as HFRO-PA, has experienced volatility in its stock price over recent days, with a notable decline on July 9, 2025. The stock lost 0.0855% on Wednesday, falling from $16.02 to $16.01 [2]. This decline follows a series of fluctuations, including a 2.89% gain over the past two weeks, but the stock remains in a narrow and weak rising trend in the short term [2].

The fund's performance is influenced by several technical indicators. While the short-term Moving Average suggests a sell signal, the long-term average indicates a buy signal, resulting in a general positive forecast for the trust [2]. Additionally, the 3-month Moving Average Convergence Divergence (MACD) provides a buy signal, suggesting further gains [2].

However, the fund also faces potential risks. The trust has exhibited low liquidity, which can increase risk and reduce the reliability of technical signals. Moreover, the stock has fallen -1.07% since a pivot top point on July 2, 2025, and further falls are expected until a new bottom pivot is found [2]. The volume has also fallen along with the price, which is a positive technical indicator but may indicate low liquidity [2].

Investors should be cautious. The stock's volatility, combined with its low liquidity and the presence of both buy and sell signals, makes it a high-risk investment. The fund finds support at $15.89, but the general risk is considered low due to controlled movements [2]. The recommended stop-loss is not set, indicating a negative evaluation of the stock [2].

For the upcoming trading day on Thursday, July 10, 2025, the stock is expected to open at $16.04 and move between $15.76 and $16.25, with a possible trading interval of +/-$0.243 (+/-1.52%) up or down from the last closing price [2]. The stock is closer to resistance at $16.02 than support at $15.89, making the trading risk/reward intra-day unattractive [2].

References:
[1] https://seekingalpha.com/article/4800200-income-covered-closed-end-fund-report-june-2025
[2] https://stockinvest.us/stock/HFRO-PA