Today's price, (about $23.75) has created an attractive entry point for investors. Should the price move to the analysts' target of $25.66 from the current $23.75, the capital gain would be 8.04%. Couple that with a 10.11% dividend yield, we get a total return of 18.15%, and that is one of the best potential total returns among the top companies in the BDC space today. And not only is SLRC management highly respected and experienced, but the officers and directors interests are aligned with the other stockholders through their ownership of over four million shares of the common stock.
Q1 numbers should be especially interesting since those numbers will tell us what Crystal actually contributes to the SLRC NII. Even though the Q1 NII may be muted for the reasons given earlier, an amplification of what the rest of 2013 may look like could be heartening. The anticipation of Q1 numbers and the content of the CC should be high, and we need only wait about six more weeks to see the numbers and hear the words.
I would add one more item to this dialogue. The SLRC stock price can be fairly volatile as it is one of the larger BDC's and therefore on the radar of the bigger money players. Of 41 BDC's out there, SLRC ranks 7th in market capitalization. So it does get its share of attention. Per FC, of the 11 analysts following the stock, 7 have "buy" ratings.
Just two opinions (mine and The Shadows'), and I hope our thinking and mathematics are all correct.
Thanks for your thoughts. DSW Group holdings LLc is the other issue. It is 10% of the portfolio and has been restructured. That means it is underperforming. If they have to write it down by 25%, it takes $.60 off BV. They wrote it down in 2012. I do not like this concentration in one holding.
Thank you for taking the time to post such a reasoned analysis. I am initiating a position today partially on the basis of your post. Although technically it looks like there is a little more room on the downside, that should be covered by the dividend
Here is a comment of mine on PSEC that I posted on another board a few days ago.
"PSEC is NOT one of my favorite BDC's because even though it is a very aggressive BDC with growing assets and equity (but not equity per share), it issues stock far too often (three times in 2012) thus hindering any advancement in the stock price. In the last five years, the price of PSEC stock is down about 25%."