Hi Jim. Still waiting for your response to my
acas questions on the brkl board. I read your acas
posts on bankinvestor.com and now I'm ready for the
good stuff you promised!
BTW, if you are a
Buffet admirer as you say, you shouldn't say that acas
(or any stock) is a great "value *and* growth" stock
[emphasis mine]. Value and growth are not distinct
attributes; anticipated growth is simply one of the metrics
used to impute value. I realize that you are using
these terms the way everyone else does, but that
doesn't make it logical!
<<Buy first, then inquire, dig, learn to perhaps invest further???>>
You are right,in principle.
I did a scan of dividend paying companies.
I selected ACAS even thoug it wasn't the highest paying dividends that I came up with.My minimal FA "talent" told me it was safer than others.
My TA "talent" told me the price is on the way up (which it did,more than 4% since I bought in) so it seemed safe to buy.
However the more I read about the Company the more I started thinking about long term hold.
Hence all my irritating questions.
English is my 2nd language which does not make it easy reading all those financial documents with their terminology.So it is easier to ask questions....
Thank you,Tennee and other posters for the replies.
This is the type of question one could answer in "Book" form.
In reality, ACAS' approach seems to have been prepare for the worst by doing thorough and competent due diligence on every opportunity regardless of current economic conditions.
No one has a crystal ball to pre-empt the downturns in economic cycles. We saw how the portfolio performed through the stock market bubble burst, the 9-11 scare and the ensuing economic sluggishness brought on by both.
That the majority of consistent posters on this board are still here pretty much tells you how we feel ACAS handled a downturn in Economic conditions.
We are but a few percentage points from an all time high, our dividend continues to grow and as a percentage of total investments our defaults should level off from here and perhaps continue to decrease.
THEN THE BONUS.......Additionally, we will see some kickers from the equity positions ACAS has earned from several of their investments. This "equity portfolio" should far outpace "non-recurrals" and keep the affect of ACAS' "misses" to a minimum.
However mrs snow.......I'm a tad confused by your investment philosophy. Buy first, then inquire, dig, learn to perhaps invest further??? If I was MR Snow....I'd be releived by your pick and enraged by your process.
just my $.02
"<<An economic slowdown or recession would affect ACAS. Most of the portfolio companies are manufacturers. Management, though, has been through this before and would take the proper steps.>>"
We are coming out of a pretty severe downturn in the mfg sector over the last 3 years. ACAS did ok, and actually grew the business. There was an increase in unrealized depreciation, and some bankruptcies, but the storm was weathered.
One of the silver linings was that ACAS was able to buy several companies at very attractive prices, as opposed to the inflated prices of companies up through 1999 and some of 2000. Those excellent buys should pay off handsomely in the next 2-7 years, as those companies are sold or grown.
Hope this helps. Glad to see you reading the old messages. Good luck with PIK and OID. These will make you think hard. Most people don't do that very much these days.
<<An economic slowdown or recession would affect ACAS. Most of the portfolio companies are manufacturers. Management, though, has been through this before and would take the proper steps.>>
Can you (someone) elaborate on the possible steps to be taken?
I hope this question wasn't asked/answered already...lol
That's what I thought. There is also another 14M
already announced in Q3. Here's something else I was
wondering: the last 90M or so in deals have been placed from
the revolving credit line right? So if the placement
funds are available, this means that ACAS earns the
full ~14% from deals placed out of that new
Good point. That's about 30% of what you need to
maintain a flat dividend at current $.43/quarter on more
shares. Maybe it CAN be done if ACAS has a couple more
placements close to closing!
I noticed that about 40.5M was placed in the last
two weeks of the quarter just ended. How much of that
is reflected in Q2 results? I don't know what the
spread is that they are receiving (the average rate is
~14% on the new placements) - if borrowed at 8%, the
spread would be 6% on 40.5M divided by 4 gives us around
600K income increase for future quarters. Spread that
over 17M shares would add around .04 to earnings (and
dividend) for Q3.
I understand your concern about everybody liking
ACAS. Do you have any downside to toss at us? I sure
like to see flags go up from people who know more than
me. I can learn something and maybe save (or even
make!) some $$$$ ! :-) KarenLeroux had some good
questioning back around posts 200-210. I hope you, or anyone
who's been watching this board with doubts about ACAS,
jumps in and keeps the conversation going! We all
ultimately benefit from the exchange of information and
experiences, and the group here seems to be polite and
respectful of each other. I know it isn't like that on other
Veaton: rained here last night... we're making
hay so water NOT good. Love to send it your way but
the weather doesn't listen to me!
here's my updated guess on dividend -
net operating income distributed over.....
million shares out (11.666M diluted second quarter plus
estimated 5.334M just sold).....
Annualized $1.20/sh now on 16 15/16 price
= 7.1% yield
Big caveat: How many shares
were sold to management and in offering? Any overage
in offering? I couldn't find anything on ACAS'
website detailing these two transactions. Somebody please
point me in the right direction!
point: My dad is also in Alliance Capital Management
(AC) Its a limited partnership running mutual funds,
and also distributes all its earnings. There is no
quarter to quarter consistency in their dividends...
sometimes they're down... but over a year timeframe, they
just pay more and more! At least early on, because of
the proportional size of share sales for capital,
maybe ACAS will be similiar.