Jman, I agree with everything you are saying, but the market has priced in armageddon on some of these stocks. They were valued at 60% of NAV when financial crisis was at its worst. I researched PSEC, and go back and look at history. If you buy it at a 40% discount, it always pays you back 100% to 150% returns in 2 to 3 yrs. World interest rates are crazy right now. Some negative, US approaching all time lows. It makes no sense with employment growing, wages growing, earnings will increase now that oil quit tanking. The talking heads keep saying the bull market is too old and a recession has to come. Recessions typically come after some excessive gains. Maybe that is what we are seeing now, but it does not feel like.
I wish I was up on my purchase, I bought a little too early. This lower rates for longer is going to push people back into some of these BCDs that were killed when oil dropped and everyone thought the bad oil loans would spill over into all debt investments. Well it didn't happen and some of these BCDs with little oil exposure are trading at extreme discounts. Making 30% a yr is not only possible, but likely.
FSC is far from perfectly run, but even at $5.00 it is still trading at a 40% discount to NAV. It can run quite a bit yet, probably to $6.00 without too much resistance. Look at the move KCAP is making, it also was over a 40% discount to NAV. I sold that one way too early and missed the last .50c move. I am still holding and buying more at these levels.