PSEC dropped some 2.8% today because of Stifel Nicolaus's downgrading it from Hold to Sell today. Actually, Stifel is the most idiotic analyst because in the past it would downgrade a stock and then one day later it would upgrade it. It almost appears they did it on purpose. The problem is PSEC was not the only BDC got affected today due to downgrading. BKCC dropped some 3.5% today also because of SN's downgrading it from HOLD to SELL. MCGC dropped a whopping 10% at one time because of similar downgrade by SN. Normally this would be a great time to accumulate one of these three stocks. It is quite possible, especially for PSEC to go back up within a few days. The problem is now PSEC is already selling with a 13% premium and its yield of 10.28% while not bad, is really not that excellent comparing with the dividends paid by some better REITs such as MTGE, HTS, NLY, IVR, AGNC...
Therefore, I believe the whole BDC sector is now overpriced and will be susceptible to a market correction.......SOON
I think that as long as banks aren't lending BDC's will be golden. While I don't like several of your MREITs, I am heavily invested in that area and doing quite well with NYMT, AMTG, and WMC (also MTGE and AGNC). You can't be all in on MREITs though, and in my opinion, the BDC's are the next best place to diversify in to. Thirdly, with all the unrest in the world, some commodity plays seem to make sense. That could be gold but I'm playing in the oil arena right now. GLTA
will you wait for some particular event/news and get back in? if so, what would are you expecting?
will you stay in cash in the interim? if not, what will you put it into?
i also sold when it ran up this last time for 7 months of dividends. thinking they will do another SPO, then will get back in . meantime, only thing i've found that interests me is OHI.
How can you compare a BDC company with "better REITS such as MTGE etc" Psec is venture capital etc finance company lending to business, MTGE etc are finance companies operating in the agency and non agency mortgage field. They are chalk and cheese, completely different risk factors and profiles. Do you really know hat you are talking about? No offence etc
Down grade is not justified. However PSEC missed a golden opportunity to do a SPO to raise some
more capital,now they will have to wait for the 10-11 area to try again. Only a drop in the dividend
would justify a downgrade.
Yea, you had completely missed my point, I am not trying to compare chalk and cheese. (*Hope you do not mean BDCs are chalk and REITs are cheese) I simply tried to compare the risk vs reward ratio. It seems some (not all) REITs have better risk vs reward ratio because their yields are simply more attractive than those of BDCs. Will that make them safer? Not really. Higher risk, higher returns. I believe PSEC was oversold today because all these people who bought PSEC (some at its peak) were panicking and started dumping PSEC today. I actually bought some at 11.47 but would not hold on to it if I can sell it around 11.88 because at its current price I believe it is still overpriced. The whole BDC sector, in general, is now overpriced...