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.
Still over-bought. Still targeting $13 to $13.50.
NAV and NOI are still awful. The wildcard remains a spin-off. Absent that, we have a good shot at my target price if 10-year treasuries move north of 3%.
@ lenyw: Interpret this stock on a chart all you want. The current price of this stock reflects many, counter-opposing forces, IMO.
The big negatives that support the big discount from NAV are the lousy performance, and the lack of a divident that most BDC investors like.
Helping to hold ACAS up is the possibility of a spin-off, and maybe a very small possibility that Blackrock could make a tender. The discount to NAV also helps in providing a floor.
If you want to use a decent chart, you might pull up the chart that shows ACAS's discount to NAV over time. A price of $13 to 13.50 would put it's discount to NAV at a level that is both attractive and historically achievable.
You already had that significant pullback in June. Since then it is making higher lows and trading above 50/200 MA. If you are waiting to buy this at a lower price then at least sell puts. If you are right about pullback you will get the stock at a further discount and if wrong you at least profit by keeping the premium.
Sentiment: Strong Buy
Rather than looking at lines through higher lows and moving averages, I prefer to look at Net Operating Income and the trajectory of NAV and NAV net of re-purchased stock.
I'm only interested in the stock price when it takes the form of one of dozens of ratios that contrast price with organizational fundamentals.
Thanks for your input just the same. GLTY. S.
That "overbought" stock keeps rising. At this time, think you will have a long wait for the 13's.
In the mean time it appears that ACAS is improving and investing on all fronts.
Sentiment: Strong Buy
You could very well be right, blair.
As a contrarian investor, I don't "chase price". If I don't get the price I want, then I move on to a candidate where I do get the price I want.
If I'm wrong and ACAS soars over $16 or $17, then I'll most likely sell all the shares I accumulated for 6 bucks a share.
The most important thing I learned from people like Rothschild, Templeton and Buffett was "patience"...
... and the fact that all of history's most famous investors were "contrariains".
Thanks, and yes, it could be long wait and I've got the time for it.