Using AEBT (adjusted earnings before taxes) as a measure of ongoing earnings power, DFR reported earnings of $.32 for the quarter, or $1.29 annualized. More importantly, the company has $100 MM of investable cash to deploy. $10 MM goes into a share buyback which produces an immediate 25% return when buying stock at 4X earnings. If they can earn 15-20% on the balance,not an unreasonable objective in their business, earnings power should exceed $2/share once the cash is deployed. Not sure what multiple to put on $2 of eps, but stock looks cheap at current prices.
Yes it was good quarter, but more importantly they announced the closing of their first CLO in the first quarter! Another 400 million in AUM! With as small of a free float of stock and with the 300,000 share short interest if they in fact use the $10,000,000 to buy shares we could see a double from here. We'll just have to be patient.
I, like many of the shareholders I suspect, couldn't really understand the quarterly report. If PEMBROKE31 is right in his analysis and CIFC (DFR) can earn $2/share on an ongoing basis, then it would seem that it should be selling for more than 3 times earnings.
Also, it seemed to me that the buyback was up to $10 million. If the stockprice does shoot up in the next month or six weeks, then will management still be so anxious to buy back the stock?