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Ares Capital Corporation Message Board

  • phillipjmonkey phillipjmonkey Jun 15, 2010 7:50 PM Flag

    BDC's

    I own ARCC and AINV. Thinking about adding another. Which is the best of the others? PSEC, HTGC?

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    • The best buy now is SLRC. Or FSC under 11.50

      PNNT, HTGC and ARCC are on downward trends right now, may want to wait before purchase.

    • I having followed BDCs for two years, which basically means that I am still a BDC newbie. I have posted BDC valuation spreadsheets and how I am using that as a tool in two messages on the Investor Village BDC board
      [http://www.investorvillage.com/smbd.asp?mb=5028&mn=14555&pt=msg&mid=9152393 and http://www.investorvillage.com/smbd.asp?mb=5028&mn=14556&pt=msg&mid=9152550 ] Given that there are several spreadsheets in those messages, I could not post those messages here. One who is looking for BDC investment ideas could find value in those message. But these messages are spreadsheet intensive - and those who fail to take the time to read the story between the lines in those spreadsheets will miss a lot of information.

      I am wanting and would welcome corrections in my valuations or in my line of thinking.

      Some context: The original message was posted on the I.V. MLP board due to my having posted BDC suggestions in February of this year - and those two messages include content relating BDCs to MLPs. Also - Please do not share these links on other Yahoo boards. I may want to ask the TCAP board a question one day - and I would not get much of a welcome there [and probably some other boards too] if it was known that I had previously bashed that stock.

      I am a numbers guy, so I tend not like feedback like "I like stock XYZ" when it is not followed by a logical justification. Given that valuation metrics are not mentioned on this board [or any Yahoo BDC message board for that matter] with much frequency, these metrics may be unfamiliar to a lot of you. If there are those among you who do not believe that NII/share coverage of the dividend, price/NII ratios, leverage ratios, non-accrual stats, NAV growth, or portfolio company debt/EBITDA ratios do not matter, then I would like to read your justification for having that belief.

      Three warnings: [1] ARCC's take-over of ALD has wrecked its NII/share numbers. There are reasons to believe that ALD's assets, under ARCC's management, might be productive and ARCC's NII/share will dramatically improve. But that optimism is NOT reflected in the current numbers [and there was no reason to have that expectation in Q1-10] - so one could read those two aforementioned messages at I.V. and feel that I am attacking ARCC. That was not my intention. [2] The message will probably go over the heads of a lot of people - or at least that was my impression from private message feedback from the MLP board. So I would also welcome follow-up questions - if there are not too many. [3] The proof that these valuations matter are based on five years of following regional banks - and I would have to include a lot of bank data to give full justifications for my expectation that these valuations have merit. Given that bank data is off topic, only a small amount of data supporting the importance of these metrics were given in the two messages

    • I have also opened a small position in TCAP because of its' gaining a pair of SBA licenses. I am still building up in PNNT,too.

    • I moved out of PSEC.

      MCGC and TCRD look good to me.

      AGNC is another (non-BDC) HY play. But I would look for an entry after it goes ex-div and seek a 2X div discount.

      zip

    • glimpse_of_the_future glimpse_of_the_future Jun 16, 2010 10:02 AM Flag

      I like PNNT and FSC. There are undoubtedly a few other BDCs which should do well going forward.

    • I like PNNT and CODI. HTCG is also on my radar.

 
ARCC
14.89+0.07(+0.47%)May 27 4:00 PMEDT