IMHO PSEC should launch an aggressive stock buyback program---
Anywhere under $10.00---This would eliminate the dividend on the
repurchased shares, and the stock would be purchased below
book value---enhancing the value of remaining shares oustanding--
This would be a better use of capital than most of the loans they are
making at this time--
Simultaneously of course the company should suspend indefintely
the stock issuance program
I am not sure if convertible preferred shares count as capital or leverage for a bdc but I was looking at what call did where they sold the puts to get an even lower price. I would suspect the price would be in the high 8's and then if the price went up they would get over $1 a share or they would increase the nav per share In the buyback. they could always sell the shares again later.
this company will never buy stock back, that is against their policy the only way they do business is to sell more stock so they can make more loans. Only if they liquidate will they buy back stock. They doubled the amount of their shares last year. Once they quit selling stock this price will collapse even more. They have no income to buy stock, they spend all of it and more on distributions. Do you think they would borrow money to buy stock, You really are clueless on this company
100% agree that this screams for a stock buy back, and I think there is a decent chance they do it. However, I think there may be somewhat of a conflict of interest inasmuch as management fees may be adversely affected in the near term by a buy back.
Still, at this big a premium to NAV, a buy back ought to occur for the long term benefit of everyone involved.
Do you think they will do it?
Sentiment: Strong Buy
PSEC Stock buyback is not going to happen. They have money in their lines for growing the investments and subsequent revenue.
They can't issue new shares. So their hands are tied until stock price increases. Investors buy PSEC for dividends.
If you want a BDC that does stock buyback then purchase ACAS. They don't issue dividends and sell well under book. They get fee income from mREITS and use that income to buy back stock.
Thanks---Yes I do---JMO
With great respect I know that you meant "this big a discount to NAV"
Current Management fees in my opinion are excessive---Insiders would be better
off developing a new (more reasonable) formula somewhat based on
the performance of the stock---They own a lot of shares, and the stock
would trade substantially higher more than offsetting the fee reduction---Plus
management would be doing the "right thing" They would still receive
substantial fees annually but not so egregious as currently.
They should immediately suspend indefinitely the current stock issuance
program which is a very expensive source of funds