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:  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.  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.  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 think you need to go back to the drawing board. You say that ARCC's NII has been wrecked by the ALD acquisition. ALD was not yet included since the takeover did not close until 4/1/10. They did have one time charges (professional fees) but these should be excluded in your analysis.