I've been accused of only trash talking others (not true) so to prove it here are my thoughts on AOD...
AOD has tried holding onto $4.00 but looks like it couldn't. I don't see you guys getting your long targets.
Looking at AOD post dividend cut it continues to do what it always has for years.
When the S&P rises it rises less.
When the S&P falls it falls more.
S&P is due for a pullback. Everyone is expecting it. I have my SPY May puts bought. For AOD... no this is not a buying opportunity. Surely there are far better choices out there for capital gains AND for income.
I am long PSEC, SPLS, STX. Also looking at SWY if it can get some pullback after its last earnings.
On a NAV basis, the fund began the year at $4.54. With the S&P down 28 handles today, the fund NAV closed at $4.56, or +$.02 y-t-d. Add to that the Jan/Feb dividends of $.055 and $.027 and the cumulative return to date this year is $.102. The y-t-d % return is therefore .102/4.54, or 2.25% -- annualized, 13.5%.
A bullish argument for the stock is that the dislocation between the fund NAV and the stock price of over 14% is, unwarranted. If the investment performance of the new managers stabilizes the fund NAV, the discount should mitigate and return to a more reasonable valuation relative to actual NAV.
If you bought it in Jan and sold then you have that return. But that is a very specific window you are talking about.
The NAV is the one bullish reason I can see. It is a big one but you cannot sell AOD for the NAV.
Eventually one of two things will happen.
The price will rise to the NAV
The NAV will drop to the price.
If you look at their track records it has been awful - I am ready to take a chance with the new fund managers. I like their recent decision to cut the dividend. My reasons to make a limited investment at prices below $4.00:
1. Trading at hefty discount to NAV 2. Insiders were recent buyers at $4.00 3. New fund management.
4. Monthly dividends which should now approximate investment income