They actually earned only 2 cents this quarter. The rest is non cash nonsense. I'll have to listen to conference call to see what they say but I think TiO2 prices are killing them. The Rockwood acquisition was a bone head move.
El Nino has brought above average rainfall to Brazil this year. The months of Dec. to Apr. are the rainy seasons. Years of drought has reduced the cheap hydro power that CIG depends on for profitability. The recent strength in CIG is probably due to this.
Buy CIG for long term income and capital gains. But have a LONG term outlook, several years at least. The company is currently selling about 1x potential PE.
About $38 million in convertible notes matures and MUST be paid off. If the company can do that without breaching covenants on its other debt then it would be very positive. If the company's leverage goes over the RIC limit of 200% that triggers all sorts of penalties. That actually happened to some BDCs in the last recession, ACAS and ALD for instance.
After March 15 KCAP could be another busted BDC and probably sub $1 pink sheet stock. If KCAP can make it through this crisis it is probably worth $5+.
The companies announcement that it would waive fee in order to cover the next quarter's dividends tell you all you need to know. Bad earnings and possible energy related write offs next quarter.
Wait for single digits to buy. Single digits coming sooner than you might think.