its obvious from the div raise that management thinks they can go right on paying up thru the coming year.... so there may or may not be a recession, these guys think they'll grow profits.
in that light consider also that they are financial people, i mean this isn't a potato chip company right? so they timed their announcment to catch the shorts blind side and to take advantage of the tax loss selling, the fear-of-tax rates-selling and all the other bull that has converged to drag this symbol down...
so that's why i say: they have a sense of humor, like here you go, shorty, sit on this!
Sentiment: Strong Buy
Might be they glimpsed all the bovine dung "dividend will be cut" dribble the sellers have been spreading. (Just as they ALWAYS do, you'd think they could come up with something original, but that seems beyond the brain dead)
After they stopped laughing, they decided to stop the crap.
Consideration for weak hands?
I asked about the sustainability of the new dividend level in an e-mail message to IR this morning. The response was, "We would not have changed the dividend if we did not believe it was sustainable." So apparently, they feel they can at least maintain the new dividend and additional small incramental monthly increases going forward with all the excess undistributed NII and the recent quarters with NII above .40/share
From what I've heard in quarterly conference calls, PSEC is interested in a smooth sustainable dividend, so, what they wrote to you is quite consistent with that view and I'm glad to hear it. What surprised me was that they increased it so soon. Another interesting question is about the monthly increment. Are they going to keep that going? If so, what will it be? I note that Jan has a .0025 increase. The increase has been .000025/mon, or 1 cent every 33 years. If .0025 is the new increment, that would be a 1 cent increase every 4 months -- a huge huge change. It would be great if they can do that, but I'm skeptical that this is their long range intent. Anyway, I'm very pleased to see that PSECs success is now trickling down to the per-share level.
check my math but about 14 cents of the 40 cents is gas solutions if I remember right . . . if they lever up FirstTower and add more CLOs they certainly can boost NII up near $1.32 over time but the risk just gets higher and higher
They definitely have an attitude, not so sure about a sense of humor.
I picture Barry sitting in his office, watching this thing tick by tick . . . he saw it down to 10.30 or whatever yesterday and said "screw it . . . we're raising the dividend!"
Now, understand that the dividend after the Gas Solutions money runs out is only about 750% covered . . . but Barry says "it's totally crazy, so we're doing it!"
Getting your stock above NAV is so, so important. Once you get above NAV it tends to propel NAV higher. Once you are below NAV it is very, very difficult to get back above it on a sustained basis.
I would look for them to really be loading up on CLO subordinated positions and jamming capital into First Tower as really their only options to avoiding ROC the second half of next year.
No position, been both long and short at various times.
is still a huge div.... so if that's the worst case scenario, i give PSEC decent chances of being back above nav soon and in an uptrend... the current selling (and miserable looking chart) has several influences, the way i read it and with the exception of the fall off in gas solutions income, most of them are transient. but we'll see. in any case i admire your discipline in simply being out for now... not capable of that myself, not when it pulled back so low.
Sentiment: Strong Buy