Sell off is likely on the horizon as there were a lot of traders who paid above par and need to exit before rates rise and negate any capital gains. Stocks aren't going to hold this stratosphere much longer and bonds will be a good place to park some cash until the correction passes.
nibbling would be the wise move on this one. Where this will trades and where it should trade are at odds here. With the lawsuit(s) mostly settled this should trade closer to NAV but....when evaluating what has actually transpired for the shareholder it comes up a big fat nothing. No real commitment from management to align interests and return value to shareholders therefore retesting the 4's isn't out of the question until the next chance for management to report an alignment. No need to rush into this one. If it hit's the 4's then it becomes attractive to me.
Since the advent of the 'New Deal' there are two type of Americans. Those who believe they are responsible for themselves and those who believe government is responsible for them. It matters little who the face is, most Americans vote for the philosophy. Sooner than later we will have too few to take care of the too many..
Sounds like you might be consuming the exact hysteria the rags are seeking and serving. "One Time' event is the term the rags are applying, Prospect does not categorize as such.
Categorizing this activity as a one time event is only self serving. It's not like PSEC is a railroad selling off their locos and rail cars. PSEC is in the business of buying and selling assets & loans.
The only 'one' about the situation is the Harbortouch sale was a release of 'one' chunk of capital that will be redeployed in multiple originations, of which origination fees is where the real cash is made in the BDC segment. Of course this aspect suspiciously left out of all the 'concerns'.
PSEC reports earnings which frankly is the best report in years. NII exceeds the dividend and NAV increases.
The metrics of PSEC are almost text book for a BDC PPS to trade at NAV yet the price still lags by an almost 11% discount.
Over the last few days the paid to publish rags are 'concerned' with PSEC. Really ? Looks like the 'concern' is more from the shorts now paying to make a viral story. It's so obvious, they are calling for a $7 target price (27% discount) when the dividend is covered and NAV is stable.
Add in the 22 days to cover on the short side and it becomes clear why the 'concern' has flared up. If Barry and Grier are dialed in to this another round of near term insider buying will light a short squeeze.
Has to do with pending litigation. Case 16-cv-02990 in the State of New York is requesting relief in the form of permanently enjoining the defendants from further violations and repayment to Prospect Capital all excessive investment advisory and administrative fees for year prior to commencement of complaint.
The complaint has 160+ pages of substantiating documentation that looks very probable for an award. If an award is granted Prospect will have to hand that money out to maintain RIC status in the form of increased dividends or a special dividend.
Why ? It's not the currency standard anymore. It's just a shiny commodity that has no real value basis anymore other than what/how much of the crowd is chasing or dumping it. It is no longer even the top material. Many hybrid materials surpass the characteristics of gold. It is quite amazing that the material has held as much value as it has which on the flip side suggests how far it could fall. Don't want to be holding pounds of it when that happens.
The excuse is LTV (Loan To Value) enhancement. This is one of the critical bank covenants, particularly in relation to restrictions on distributions. So with this metric improved NMM is theoretically closer to reinstating the dividend. Sounds good for shareholders ? Yes and no. Primarily no because there is no dividend, so on that front it's pointless at the moment.
There is also the fundamental valuation and ROC examination.
NMM buys the MSC Cristina on 4/22/2015 for $147.8M. There is currently a $230M charter attached to this ship and taking out NMM advertised operating expenses this equates to $192M FCF value.
At CYE 2015 this ship had a carrying value of $144.4M. So a couple of BIG questions ?
Why a ship valued at $144M just six months ago is now sold for $125M ? Yeah the market is weak but this vessel has a $192M FCF charter attached to it. With the attached charter this ship has the ability to pay for itself plus generate approximately 54% more cash. There is something being left out of this story. Is this charter at risk of default or renegotiation ? More questions than answers on this one.
Earnings report out and the market as a whole yawned or just doesn't care about FSC any longer. Likely the latter by looking at analyst participation.
There is one key element. NII was 20 cents. Distribution is 18 cents. If Todd and the clan can keep this up a dividend hike will be in order. Has to per RIC 90% rule. There is some momentum behind this stock at the movement. An earnings and revenue beat coupled with the uncertainty of litigation erased. Add in a divi hike and FSC will look alive again.
Like I said in my opening statement....PSEC ain't a darling. This stuff penned by Roddy isn't anything new and in the scheme of things isn't the worst that PSEC is doing. The Behringer stuff is multiples more devious but even at that the market has already priced the shenanigans in. These clowns suggesting the sheeple need to sell out in a panic to support their short attack is worse than anything PSEC has done. Roddy and Andy are far worse crooks, which was the point.
To be clear I'm not saying Prospect is any sort of darling but.....this isn't Roddy Boyd's and his pal Andrew Left's first run at advantageous "investigative reporting". I was introduced to these two back in 2010 when they decided to pounce on Harbin Electric claiming the same thing. Valuation fraud. This went on for a good year before management had enough and just took the company private as the market wouldn't value the company appropriately. Even the privatization offer was denounced as fraud by these two. In the end Harbin paid exactly in cash the T/O amount demonstrating in the end they were the right ones. Harbin would have never paid more than the company was actually worth.
This is just another round of recite and re scare. This pound piece is nothing but recital of what the market has known for years. All BDC's inflate their asset values to some degree. Why most of them trade for discount. Is PSEC's CLO portfolio inflated by 50% ? Doubt it, particularly since most already reporting this period just market up so it's likely PSEC just didn't chase the short term swings. As usual there is ALWAYS someone ready to sensationalize something in the market to create personal opportunity.
The only thing certain is Roddy and Andy somehow have the ability to get the sheeple to trample. The sheeple have such short memories.....
Another tip and maybe most important is you must let the page completely load until clicking on anything. This goes back to the cookie issue with having to be on your device so the next page can verify you saw or had the chance to see the advertisements.
Nobody is right 100% of the time. Some are right 1/2 the time. Some are never right. Slick is right enough of the time to warrant a look at what he says. Anyone bashing his contributions to the board community just relishes drama. Unless provoked his posts are concise, to the point and beneficial.
The direct monetary gain from the settlements for the shareholders are minimal. They always are. The real win here is the forward operational conduct by this BDC will be more in line with shareholder interests. Other BDCs, particularly externally managed, are on notice as this sets a precedence. Whenever shareholder and management interests are aligned, even by force, stocks tend to do very well. The exmBDC segment stock performance as a whole has lagged valuations as the shareholder and analyst community did not see any restraint of conduct by managers. Any new scheme they could cook up was served the market.
These settlements will change that.
So management posts a 65 cent NAV increase. Mostly from unrealized CLO gains. This is certainly the right direction but....the dividend being handed out is still more than 50% capital. (55% ROC to be exact). I wouldn't call this a good performance as any money manager (including Bernie Madoff) can hand back capital.
I wish not to take any credit away from Coop as he did take initiative to put some muc needed pressure on the 5th street clan. That being said don't be too quick to give complete credit to the Coop. An elderly Florida resident was the pockets backing the derivative.
It's only 15 min into the open and so far I called this one wrong, Will see what the rest of the day brings. Either the pre-market panic contributed or the pre settlement announcement prices were in anticipation of a juicier settlement.
TICC reports today a 65 cent increase in NAV. Will this be the prevailing trend in the BDC space for the reporting period ? TICC posts unrealized gain of 48.8M with 37.3M of that being from CLO's.
Expect the segment to be green today !
The fiscal settlement is really pennies in the big picture but the dark legal cloud over this can now clear.
A 25 cent jump today. Then a slow climb to $7.50 provided the NAV reported next week is stable.