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American Capital, Ltd. Message Board

  • bjspokanimal bjspokanimal Dec 11, 2013 6:12 PM Flag

    Significantly OverBought... but now, maybe a healthy pullback


    I like ACAS as a "contrarian" investment because it is rather sickly compared to the best and brightest in the BDC industry (eg: Blackstone et-al) but it has been cheap and does have some potential if they can improve their strategy.

    In Q3, ACAS put up rock-bottom operating earnings, and absent it's share buybacks, it's NAV would have dropped... in sharp contrast to NAV surges in 2011 and 2012.

    Because of that, I expected to be able to buy ACAS in the $13 range.

    Instead, the torrid US stock market has lifted all boats, and ACAS has surged to a price that is beyond what it's poor Q2 and Q3 reports would justify.

    Today's drop below $15 is a first step in a pricing re-set for ACAS. It is over-priced above $14, but it still looks like a good buy between $13 and $13.50.

    Patience is a virtue with this red-headed BDC.


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