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American Capital, Ltd. Message Board

  • givethanksineverything givethanksineverything Dec 18, 2007 11:24 AM Flag

    Just Added to ACAS @ $33.60


    I cannot imagine why investors are selling ACAS at this price, except possibly for tax loss reasons.

    However, here is why I added this morning:

    >12.5% forward yield

    >Significant diversification at 270+ companies

    >Prospect of lower l/t interest rates by FED

    >Probability dollar will drop more increasing the attractiveness of US equities and real estate investors by foreign capital.

    >Well managed balance sheet of ACAS with SIGNIFICANTLY lower leverage than banks, brokerage companies, and most REIT's.

    >While I don't recommend it, some investors will begin to use lower cost margin and gain on the dividend spread by buying ACAS.

    All in all, I never anticipated ACAS would drop this low, too low for me not to add to my position.

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    • feel for ya pal. :(

    • I AGREE!!! I have held ACAS in my portfolio for about 8 years and I am considering adding to my position at about $32.00. This company is really a "hedge fund (or 'private'equity fund)" in disguise and adds nice diversification to any equity portfolio. Even if the dividend is cut in half (it won't be), it would still yield 6.25% at 32 bucks. Also, there is so much short interest, ACAS should rally on any good news.

    • I have to agree, I bought ACAS 4 years ago and was very nervous about the BDC model and paying consistent dividends when the income was very volatile based on timing of cashing out of these companies at a gain. I did a lot of due diligence and these guys track record is just to good and consistent to doubt - after being public since 1997 and perhaps more so as a private concern.

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