I completely agree that SN are the best. I don't have a copy of the most recent BKCC report but the other SN BDC reports I have read in the past are always spot on. They are the only firm that really understands BDCs, BMO is ok.
One thing about all these analyst reports that I read, they always are conservative with forward projections including stock appreciation. If SN really just downgraded them on valuation, then I really don't have a problem with the report. However, I would love to get a copy to see what they have to say.
OK - gold bars will be accepted.
The recovery in the economy and the markets is a direct result of the FED taking interest rates to zero. They are locked in to low rates for years and financial security yields will continue to decline.
>>I'm curious as to the conclusion you draw from that... BKCC is undervalued, ARCC is overvalued, or both?
Well facts are easy.
Conclusions will cost you. (Just send your signed blank check.)
Let me start with another fact. The delta yield of BKCC to ARCC has been in a range of 250bps to 500bps AND trending lower.
In general, it is better to buy low and when talking this yield delta that means when the spread widens as it did today.
So if we think that nothing changed other than price, then BKCC is a better buy today. That is my leaning. But I am NOT sure of that. The new lending arrangement looks more expensive than the facility it replaces. I will be interested to see the next earnings and hear the CC. Perhaps we will get more info on that issue.
BlackRock Kelso Capital Corp (NASDAQ: BKCC) has been downgraded by Stifel Nicolaus from “buy” to “hold”. BKCC had slipped 4.50% to $10.82 by 9:50 am. BKCC’s quarterly sales have declined by 13.95%.
Keep in mind BKCC had moved above their target of 11.
In order for Stifel to maintain a buy rating, which under their definition requires that a stock is expected to outperform the S&P500 by 10% over the next 12 months, they really would have had to raise the target significantly.
BKCC remains, IMO one of the better BDC's.
Where will it have to drop to in order to regain "Buy" status?
When few anaylsts follow a particular company,opinions such as this serve only to put pressure on a stock that has no other news. I used to be a client of SN, but left about a year ago when they started doing this and whipsawing companies with upgrades and downgrades over a short period of time in order to churn the stock. (Not that SN is the only company that does this.)