Some here think that yield rally's are a good thing, "We're down 50 cents, now I can buy it at a 13% yield, great!" I don't think so and neither does management.
Please read the April 2014 Overview on the company's web site. Pay close attention to slide 12.
The problem is, selling stock at these prices will not close the gap.
Capital Appreciation on a high div. stock? Have you checked the 5 year chart? If you are looking for appreciation I think you're in the wrong neighborhood of stocks. In fact we will probably have weakness through June. If we have a correction, which I think we will then odds are you can buy some shares below ten dollars or maybe below nine. After that you probably will see some capital appreciation as well as a higher yield percentage.
Are you new to investing? Don't you understand that this stock is not trying to give investors capital appreciation through increased share price? It is about a steady high dividend rate. Most investors balance their portfolio with growth stocks, dividend stocks, blue chips and a bit of speculative shares. The dividend stocks are in the portfolio for dividends. With a 12% dividend you don't expect the stock to be a big mover. If it was a 2,3,4 or 5% dividend then yes you might also expect some share price appreciation as well.
Stop beating a dead horse and move on.
The issuing of new stock is not a problem in and of itself but rather it is how the proceeds are used that matters. If the proceeds are used to increase income that is greater than the dilution created by the stock issuance then the results will be an increase in eps. If, however, the capital raised is not used in a way that creates income greater than the dilution of the additional shares, then the eps will decrease. The issue is, IMO, not the issuance of shares but the use to which the proceeds are put and in PSEC's case, I believe a person will find that the proceeds are being used to grow the company and the companies earning more than the dilution created by selling additional shares.
if you want the price to go up stop selling new shares and MR market will take care of it for you
investors wll have a look and see that its a stable yield and up goes the price
You are describing this stock as one for "capital appreciation". That is farther from the truth. Look at the price range for the past couple of years. A very narrow channel which will continue as income investors love a stock with little volatility and nice yield. Captial appreciation is secondary to a safe investment for most here.
"Captial appreciation is secondary to a safe investment for most here"
I hate hearing this phrase since it can confuse some who may not be as sophisticated as others. . Safe is a worrisome word to use in describing this stock. No one should think this stock is a "safe" investment. This is not a bond. You have no contractual obligation to receive your principle back which in the investing world is associated with safe. Investors MUST understand that they take on equity risk and the volatility that comes with it. Market, regulatory, company, sector, macro wrap all those risks up and you have it in PSEC.
That said this is a great dividend play. The management is trying to mitigate some or all of those risks and is doing a good job in my view at the moment. Declaring divs out a qtr or so ahead gives some stability. This has been a predictable dividend play with relatively low volatility in the last couple of years. It IS a great dividend play but it is not safe in the same respect as a bond or cash witch are usually associated with safe in the world of investing. It should provide some room for capital appreciation too, has in the past and will in the future, it has also lost capital for some folks in the past, and I am sure it will in the future also.