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Fifth Street Finance Corp. Message Board

  • thewisejman thewisejman Jul 18, 2013 10:17 AM Flag

    Dow Jones

    Today: "New claims for jobless benefits dropped last week to their lowest level in four months, a positive sign for hiring that could bolster expectations the Federal Reserve will ease its monetary stimulus this year."

    DJIA rose 72 points so far and the 30 stocks in DJIA:

    Top risers:
    UNH +5.63%
    IBM + 2.28%
    BAC + 1.75%
    JPM + 1.03%
    Appear health and financial lead the way

    Top downers:
    INTC - 2.96%
    VZ - 2.76%
    AXP - 2.55%

    Interesting to see how DOW will fare at today's closing, if it rises more than 100 points, I will add more DXD.
    Tomorrow, GE will announce its earnings before market tomorrow, right now there are more buy orders than sell, may appear investors expect its earnings will be good? May be time to buy some? Or not? Thoughts on its earnings?

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    • Wiseman: any thoughts RE; FSC....You post on this board quite a bit....Thanks

      • 2 Replies to bnemilton
      • FSC and other larger BDC should continue to perform in the current environment and may actually thrive if interest rate rises. FSC's management is good and had already locked in their SBA loans of 225M low interest rate for ten years, they have just lowered their interest rate on 6/24/13 (The amended facility includes a 25 basis point reduction in pricing to LIBOR plus 2.50% per annum, with no LIBOR floor, and greater flexibility on terms and eligible collateral.) On the other hand, they have changed many of their loans to first lien and floating, therefore protecting their profit when interest rate rises. In short, they will be able to continue to maintain their current dividend (unlike some other BDCs) and their future growth in EPS will be excellent. That said, it is currently being traded at around 10.80, according to E-trade, it is about 1.08 of its NAV (*the most recent NAV for it, according to my memory, is about 9.93 but I can be wrong) and its 12-mo high was 11.13 on 4/2/13 and all three indexes had just made new highs today. Therefore while I cannot rule out the chance of the market continues to move upward, but judging by all the current variables including a slow-down China and Fed's bond tapering at the end of this year or the midst of next year, it is about time for the market to have a "meaningful" correction, therefore if FSC continues to reach or break its previous 12-mo high of 11.13, I recommend you may consider taking some profit off the table, unless you bought it at very low costs, then you can afford to keep holding on to it. Right now, it will be almost prudent to be cautious and I will recommend start shorting the 20 year treasuries by buying TBT and TBF, plus consider adding precious metal (PALL, GGN, SLV) as inflation hedges because things will go haywire within a year or two.

      • tulsadevlin Jul 18, 2013 2:08 PM Flag

        Fifth Street Finance Corp. announced today that it plans to report earnings for the quarter ended June 30, 2013 after the financial markets close on Wednesday, August 7, 2013.

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