I have respect for Art Penn as an investor and considering how bad the timing was for opening PNNT at least he didn't blow the company up BUT . . .
Book value is down by $3.50 or so since inception so you have to this point pretty much just got your capital back as an investor and if you pay taxes you are actually behind at this point.
PNNT's track record is about average in a sector that has earned low single digit returns on equity in the past five years. AINV, his previous vehicle, has struggled, too.
Just keepin' it real.
I see a big difference between 'performance' and 'valuation'.
PNNT has not been a poor performer in 2011. NII/share is up. NAV/share is up. And over the last twelve months, the dividend is up. PNNT is covering the div with NII. And the credit metrics for the companies that loan money from PNNT are relatively strong.
'Valuation' is a different story. PNNT's share price is down approx 20% YTD. But that is the case with all BDCs that are similar to PNNT - meaning you have to weed out the likes of MLP owning BDCs like KED and TTO - and non-dividend paying BDCs that started the year selling a extremely cheap price/NAV ratios like ACAS and SAR.
If you - like angerauto - have a psychological need for the 'market' to give you justification for making an equity purchase by having the share price appreciate, then PNNT has done a poor job this year.
If you want to invest in companies so that your portfolio can generate income - and have that income be secure and grow - then PNNT has been great in 2011 [and in prior years since its IPO].
To answer the question of if I am saying there's resistance [by the 'market'] to good performance? Yes - that is exactly what I am saying. Just look at the market's performance in placing valuations on equities over the past ten years! There is an abundance of evidence that the market does not know what it is doing - or has any idea what a correct valuation really is.
The only exception to that has been the valuation of consumer staple equities. If you have a psychological need to get off the market roller coaster, then load up your portfolio with CL, CLX, GIS, HNZ, HRL, HSY, K, KFT, KMB, KO, LANC, MKC, PEP, PG and SJM. I own five in that group. If you have a portfolio that is loaded with decent yielding stocks that have very long histories of dividend growth, then you will probably sleep better at night. And these strongly appear to be stocks you can marry to death due you part. [And I would include MLPs in that 'sleep well' group.]
Once you have a portfolio of dividend growth achievers, then you can look for bonds and equities that can improve on that yield. And then you will have a stronger stomach to handle the roller coaster ride.
So I can think "so what if PNNT is down 20% this year - the dividend is secure and growing - and my portfolio is doing much better that the market as a whole. But if I were heavily weighted in MREITs and BDCs, then I - too - would have an upset stomach a be a bit worried about PNNT.
Summation [and theory] - a good portfolio will make you a smarter investor. Or put another way, a good portfolio will help you act like a smarter investor. And a bad portfolio will have the opposite effect. So if you are thinking of selling PNNT "just because the stock price is down in 2011", then chances are you have a portfolio that is assisting you in reaching that incorrect conclusion.
Lucy - Are you justifing poor performance?
Are you saying there's resistance to good performance?
Or, are people just plain stupid for buying this stock?
Once I sell it. I won't buy it anymore !!!!!