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BlackRock Capital Investment Co Message Board

  • jadelover8888 jadelover8888 Feb 26, 2010 1:32 PM Flag

    How long will it stay under $10?


    BKCC, one of the BDC (Business Development Company)whose stock is trading around $ 9.11 with a current annual yield of 14.05%. Its book value is around $9.59.

    This is what one of the stock analyasts says about this stock:

    "Posted on 01/25/10 at 1:46pm by Monica Gerson
    Analysts at Stifel Nicolaus upgrade BlackRock Kelso Capital Corp (NASDAQ: BKCC) from “hold” to “buy.” The target price for BKCC is set to $11.

    The upgrade in the rating is based on valuation, according to Stifel Nicolaus. The analysts expect BlackRock Kelso Capital to be able to successfully refinance the credit facility that is due to mature in December 2010.The recent selling pressure witnessed by BKCC in the recent past is likely to short term, the analysts add.

    The analysts expect BKCC to witness long-term earning of $1.20. Stifel Nicolaus has raised its 1Q10 EPS estimate from $0.32 to $0.39."

    There is no reason, based on the above EPS estimate that BKCC will not continue in paying at least 30 cents quarterly dividend per share ($ 1.20 annual dividend) that will gives it a 13.2% annual dividend, which is still well above that of other BDCs such as HTGC, PNNT, ARCC. In short, I believe this BDC is currently very under value.

    The company will announce its EPS on March 10, 2010 and if its EPS meets or exceeds estimate and its dividend declared remains the same, then you will not see this stock stay under $10 too long. On the other hand, if for some reasons they will reduce dividend, just as HTGC did, then it will provide the best opportunity to purchase this stock in bargain prices because with the current stock price of around $9.11 even with an annual dividend only $ 1.00 (25 cents per quarter), it will provide an annual return of almost 11%. (*Upon hearing HTGC's reducing dividend, it dropped to $ 8.23 and went back up to the recent $ 9.85, truly unbelievable. I think I will put in a large buy order for BKCC on March 9, 2010).

    Wait for another three months, you may regret why you did not buy this one. I have been hoarding this one and will not sell any of it.


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