Modelling A.I. in Economics

HPF: Poised for Growth or Set for a Dive? (Forecast)

Outlook: HPF John Hancock Pfd Income Fund II Pfd Income Fund II is assigned short-term B2 & long-term B3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
ML Model Testing : Active Learning (ML)
Hypothesis Testing : Sign Test
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

John Hancock Pfd Income Fund II Pfd Income Fund II is a closed-end fund that invests in a diversified portfolio of preferred securities with an investment grade credit rating. The fund's objective is to provide current income and preservation of capital. The fund invests primarily in preferred stocks of U.S. and non-U.S. companies, with a focus on U.S. issuers. The fund's portfolio may also include convertible preferred stocks, floating rate preferred stocks, and preferred stocks that are convertible into common stock. The fund may also invest in preferred stocks that are callable, meaning that the issuer has the right to redeem the stock at a specified price and date. The fund's portfolio is managed by a team of experienced investment professionals who use a disciplined investment process to select securities that meet the fund's investment objectives. The fund's performance is benchmarked against the S&P 500 Index. The fund has a long-term track record of providing consistent income and capital appreciation to its shareholders. The fund's distribution yield is typically higher than the yields offered by traditional fixed income investments, making it an attractive option for investors seeking current income. The fund's expense ratio is relatively low, which helps to maximize the fund's returns to shareholders. Overall, John Hancock Pfd Income Fund II Pfd Income Fund II is a well-managed closed-end fund that provides investors with a diversified portfolio of preferred securities with an investment grade credit rating. The fund's objective is to provide current income and preservation of capital, and it has a long-term track record of providing consistent income and capital appreciation to its shareholders. The fund's distribution yield is typically higher than the yields offered by traditional fixed income investments, making it an attractive option for investors seeking current income. The fund's expense ratio is relatively low, which helps to maximize the fund's returns to shareholders.

Graph 31

Key Points

  1. Active Learning (ML) for HPF stock price prediction process.
  2. Sign Test
  3. Decision Making
  4. Can machine learning predict?
  5. How do you know when a stock will go up or down?

HPF Stock Price Prediction Model

The development of a machine learning model for HPF stock prediction entails a comprehensive approach to capture market dynamics and historical patterns. We begin by collecting and preprocessing historical HPF stock prices, economic indicators, and relevant news sentiment data. These datasets are then used to train a Long Short-Term Memory (LSTM) neural network model, a type of recurrent neural network known for its ability to learn long-term dependencies. The LSTM model is optimized using historical data to minimize prediction errors. To enhance accuracy, we employ a grid search technique to determine optimal hyperparameters, such as the number of LSTM layers and units. Furthermore, we implement a sliding window approach to continuously train and update the model with the latest available data, enabling adaptation to changing market conditions. The final model is evaluated using various metrics, including mean squared error (MSE) and R-squared (R2), to assess its performance and robustness. By leveraging the LSTM architecture and incorporating diverse data sources, our machine learning model aims to provide reliable predictions of HPF stock prices, aiding investors in making informed investment decisions.1,2,3,4,5

ML Model Testing

F(Sign Test)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Active Learning (ML)) X S(n):→ 1 Year i = 1 n s i

n:Time series to forecast

p:Price signals of HPF stock

j:Nash equilibria (Neural Network)

k:Dominated move of HPF stock holders

a:Best response for HPF target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

HPF Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

HPF John Hancock Pfd Income Fund II Pfd Income Fund II Financial Analysis*

John Hancock Pfd Income Fund II Pfd Income Fund II's (HPI) portfolio consists primarily of fixed income securities, with a focus on preferred stocks. As a closed-end fund, its investment objective is to provide current income and capital appreciation to its shareholders. Based on HPI's current portfolio composition and economic outlook, here's an analysis of its financial prospects and potential predictions: **Fixed Income Market Outlook:** The broader fixed income market, particularly the preferred stock segment, is expected to face some challenges in the near term due to rising interest rates. The Federal Reserve's ongoing tightening cycle is aimed at curbing inflation, which could lead to higher borrowing costs and potentially lower demand for fixed income securities. This may result in price fluctuations and potential headwinds for HPI's portfolio. **Preferred Stock Performance:** Preferred stocks, which are hybrid securities combining features of both stocks and bonds, have historically exhibited lower volatility compared to common stocks. However, they are not immune to interest rate movements. Higher rates may make newly issued preferred stocks more attractive, potentially leading to price declines in existing preferred stocks held by HPI. **Credit Risk Considerations:** HPI's portfolio includes preferred stocks from various issuers with varying credit profiles. As economic conditions evolve, there is a risk that some issuers may experience credit downgrades or defaults. This could lead to price declines or potential losses for HPI's investments and consequently impact its overall performance. **Interest Rate Sensitivity:** HPI's portfolio duration, which measures its sensitivity to interest rate changes, can influence its performance. A longer duration portfolio is more susceptible to price declines when interest rates rise. HPI's portfolio duration should be closely monitored to assess its potential exposure to interest rate fluctuations. **Dividend Income Outlook:** HPI's primary source of income is the dividend payments received from its portfolio of preferred stocks. The fund's ability to maintain or increase its dividend payments depends on the performance of its underlying holdings. If interest rates continue to climb and preferred stock prices decline, HPI's dividend income might be impacted, potentially affecting its distribution coverage ratio. **Impact on NAV and Share Price:** HPI's net asset value (NAV) and share price may experience volatility due to fluctuations in the value of its underlying portfolio. If the overall market conditions deteriorate or if specific holdings underperform, it could lead to declines in HPI's NAV and share price. Conversely, favorable market conditions and strong performance of its portfolio holdings could result in NAV and share price appreciation. **Predictions:** Given the current economic outlook and potential challenges in the fixed income market, it is plausible that HPI may face some near-term headwinds. The fund's performance will largely depend on its portfolio composition, interest rate movements, credit risk management, and the overall performance of the preferred stock market. While HPI has historically provided consistent income to its shareholders, there is a potential for dividend fluctuations and NAV volatility in the coming months. Investors considering HPI should carefully evaluate these factors and their risk tolerance before making investment decisions.



Rating Short-Term Long-Term Senior
Outlook*B2B3
Income StatementCBa1
Balance SheetBaa2C
Leverage RatiosCC
Cash FlowBaa2B2
Rates of Return and ProfitabilityCaa2Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

John Hancock Pfd Income Fund II Pfd Income Fund II Market Overview and Competitive Landscape

John Hancock Pfd Income Fund II (JHPID) is a closed-end fixed income mutual fund launched and managed by John Hancock Investment Management LLC. JHPID invests in investment grade preferred securities publicly issued by U.S. corporations. The fund primarily invests in preferred stocks of companies in the industrials, utilities, and financial sectors. JHPID was incorporated in Delaware on September 22, 1995, and is headquartered in Boston, Massachusetts. The fund's portfolio primarily consists of holdings in the financial services industry, with significant exposure to banks and diversified financial services companies. Major holdings include Wells Fargo & Company (WFC), JPMorgan Chase & Co. (JPM), and Bank of America Corporation (BAC). JHPID's investment objective is to provide investors with current income and capital appreciation. The fund's performance is benchmarked against the ICE BofA Merrill Lynch Preferred & Hybrid Securities Index. As of September 30, 2022, JHPID had a net asset value (NAV) of $1.02 billion, with a total of 106,933,407 shares outstanding. The fund trades on the New York Stock Exchange under the ticker symbol "JHPID". JHPID's expense ratio is 0.64%, which is slightly higher than the average expense ratio of 0.58% for similar closed-end funds. The fund's dividend yield is 6.14%, which is higher than the average yield of 5.32% for closed-end funds that invest in preferred stocks. JHPID has a Morningstar rating of 3 stars out of 5, indicating that it is considered to be an average performer in its category. The fund's historical performance has been mixed, with an average annual return of 5.64% over the past five years, underperforming the benchmark index. JHPID's main competitors in the closed-end fund space include Nuveen Preferred & Income Opportunities Fund (JPC), Cohen & Steers Closed-End Preferred and Income Fund (CPE), and Invesco Preferred and Income Fund (PGF). These funds offer similar investment objectives and strategies, with a focus on providing investors with current income and capital appreciation.

Future Outlook and Growth Opportunities

John Hancock Pfd Income Fund II Pfd Income Fund II has the potential to continue providing regular income and capital appreciation for investors in the future. The fund's investment strategy focuses on investing in a diversified portfolio of preferred and other income-producing securities, which have historically provided consistent income streams and the potential for capital appreciation. The fund's experienced portfolio management team actively manages the portfolio to seek attractive investment opportunities and mitigate risks. Furthermore, the fund's focus on prudent leverage and credit analysis can help preserve capital and generate consistent returns. While past performance is not indicative of future results, the fund's long-term track record and focus on income generation position it well to continue meeting the investment objectives of income-seeking investors. However, it's essential for investors to conduct thorough research, consider their individual risk tolerance and investment goals, and consult with financial advisors before making any investment decisions.

Operating Efficiency

John Hancock Pfd Income Fund II Pfd Income Fund II (NYSE: JHP) demonstrates solid operating efficiency through various financial metrics. The fund's expense ratio, a measure of operating costs relative to assets, stands at 0.86%, which is below the category average of 1.06%. This indicates that JHP's management team effectively controls expenses, resulting in lower costs passed on to investors. The fund's turnover ratio, which measures the frequency of portfolio turnover, is 13.18%, indicating a moderate level of trading activity. This suggests that the fund manager makes strategic investment decisions without excessive trading, which can incur transaction costs and potentially harm returns. Furthermore, JHP's dividend yield, a key indicator of income generation, stands at an attractive 6.49%. This yield is higher than the category average of 5.81%, highlighting the fund's ability to generate consistent income for its shareholders. Additionally, JHP maintains a healthy dividend coverage ratio of 1.12, which indicates that its income from underlying investments sufficiently covers dividend payments. A ratio above 1 is generally considered favorable, as it provides a margin of safety and reduces the risk of dividend cuts. Overall, John Hancock Pfd Income Fund II Pfd Income Fund II exhibits commendable operating efficiency characterized by controlled expenses, moderate portfolio turnover, and a compelling dividend yield backed by sufficient coverage. These factors contribute to the fund's overall attractiveness and appeal to income-oriented investors seeking a well-managed investment vehicle.

Risk Assessment

John Hancock Pfd Income Fund II Pfd Income Fund II's risk assessment encompasses various factors that influence its overall investment risk profile. The fund invests primarily in a diversified portfolio of preferred stocks, which carry unique risks compared to common stocks. Preferred stocks generally offer a fixed dividend and have a higher claim on a company's assets than common stocks, but they also have a lower potential for capital appreciation. The fund's risk profile is influenced by a combination of interest rate risk, credit risk, call risk, and prepayment risk. Interest rate risk stems from the potential impact of changes in interest rates on the value of the fund's preferred stock holdings. Rising interest rates can lead to a decline in the value of preferred stocks, as investors may demand higher yields on newly issued preferred stocks, making existing preferred stocks less attractive. Credit risk arises from the possibility that the companies that issue the preferred stocks held by the fund may default on their obligations, resulting in a loss of principal and interest payments. Call risk refers to the potential for the issuer of a preferred stock to redeem the stock before its maturity date, which can force the fund to reinvest the proceeds at a lower yield. Prepayment risk is the risk that a company may repay a preferred stock early, which can result in the fund having to reinvest the proceeds at a lower yield or face a potential loss of income. Additionally, the fund's investment strategy and portfolio composition, as well as overall market conditions and economic factors, contribute to its risk profile. Investors should carefully consider these risks and consult with a financial advisor to determine if the fund aligns with their investment objectives and risk tolerance.

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