Regardless of all the market to market, and write downs, I think good things are about to happen. I see the light at the end of the tunnel, and its not an oncoming train. The stock is going to rebound with the market. i see $5.00/share in the cards for ACAS short term. I see mild writedowns in Q1, and write ups in Q2,Q3,Q4 of 09. The dividend will be paid in stock to preserve cash. Thats good news, it means acas will be able to survive as a BDC. Debt will get paid down. Thats great news! I believe the stock will trade around $5.00 in 2009, and $10-$15 in 2010. 2011 we will be back into growth mode. For the surviving companies, including ACAS, those that invested near the lows will be very well off. ACAS is all about survival, they are a company who made a living off turning other companies around. I have faith in ACAS management, and I believe they will preserve shareholder value the best they can. I am not concerned about the stock price of today, but rather the long term, as I too, am I long term investor. I believe in the buy and hold approach to investing, even in stocks like ACAS, I believe even those who bought @30.00/share will see those valuations again as we enter into growth, and trade above NAV. If you can, add to your positions at 0.75c/share. Dont worry about day to day price changes. Debt agreements will hopefully get amended, and in such a way that will allow for acas not to worry about breaching them, as they continue to pay down debt and increase shareholder value.
In big, but I am not optomistic because if you project the drop in cash flow from 3Q to 4q, the analysts would guess that cash flow will be 2x interest coverage. I believe that is the hurdle ACAS must get over in the next two months. It is not about covenants, but interest coverage. Can anyone clarify?
I hope you are correct. However, I'm not as optimistic for the 2nd or 3rd quarter. Especially with Obama budget and tax increases. Also, after the stock dividend I would be very happy with $7.00 per share by end of 2010 and a $1/yr dividend in 2011.