Using similar methodology, and same caveats, and with following assumptions, a potential
annualized rate of return of approximately 18%* from Friday's closing price of $9.64.
Assume monthly dividend reduced to $.10 per share in February 2015---
Assume price of $10.00 by end of July 2015---Conservative?
Investor would realize appreciation of $.36 per share--
4 Dividends at $.11------------------- $,44 per share
5 Dividends at $,10 Feb-June** $.50 per share
*Actually somewhat higher annualized rate of return as money from
dividends received every month--not just at end---earlier post est. rate
also needs to be adjusted upward---
** June Dividend received late July Approx 9 months from now
Still would like to see management make some shareholder friendly
adjustments to their compensation structure---would resonate
strongly positive with "The Street"
Finally, IMHO although a reduction in the dividend to $.10 per month could
temporarily have a negative impact on share price---this would
be short lived, and stock would quickly rebound--(Investors
would not have the specter of a possible dividend cut
overhanging---also a reduced dividend would theoretically involve
less perceived risk as management would not have to scramble quite so
hard to achieve heroic investment returns on new investments.
A $.10 cent monthly dividend would still represent a return of
12% with stock at $10.00
My guesses Price Targets:
2015 $4.80 - $5.20
2016 $6.40 - $7.20
If a solid $6.80 were to be achieved by March 2016---
an annualized rate of return of approximately 47%
from current $3.72--hat would work for me!
This year third quarter---my guess EPS $.07-.$.08
versus loss of $.32 last year---If attained should
resonate positively with investors---
Still plenty of risks---need to continue due diligence efforts
Iit looks like one of the positions is new CFO (unless recently filled)--
This is a very important position and no room for mistakes on this---The person
in addition to the attributes specified on the website, needs to have a
great chemistry with Jerry--
It looks like they want the new CFO to head up HR as well as oversee
Legal---IMHO, a mistake and too much for one person---Should be able to find qualified
persons for HR and Legal at very reasonable salaries---let new CFO concentrate
on being CFO!
Have some additional thoughts to follow--
From October 16th closing price of 9.34 my guess is a 17.8% rate of return
on investment between now and end of 2015---hopefully conservative and
derived as follows:
(1) October through January Dividends $.11 x 4 mo = $.44
(2) Assume PSEC drops dividend to only 8 cents monthly
February 2015 through December 2015----this would be
extreme and perhaps unlikely ---in any event that would
be $.96 annualized and would represent a still excellent
and quite likely perceived to be secure rate of return on
$9.34 0f 10.2%
Thus 11 months X .08 = $.88
(3) Assume stock grinds its way to $10 by end of
2015---a gain of $.66---
Adding the $.44 + $.88 + $.66 to $9.34 = $11.32
1.16 years from now December 2015 works out to
rate of return of 17.8% comprised of dividend
plus capital gain---Best if stock held in tax free account.
Hopefully this is conservative---It would be helpful if
management took some actions that would be perceived
as shareholder friendly such as not computing management
fees on uninvested funds,
Still risks here, and everyone should continue with
own due diligence efforts.
Risky IMHO like everything else in the market these days---However, I do like
our chances and hope your price target materializes.
Yes I agree--Time is very short---
Best outcome in my opinion--Company works with the activist investor group
to find strategic buyer for company---substantially higher price than current
could be realized. IMHO this should not be a stand alone company in current market
Yes I agree with Simp---another little "chip" taken from the rock of confidence required
to be involved in this or any stock---small chips have a tendency to grow in number,
and also can morph into bigger chips---Ouch!
Rico's perception that CG "seems to have no regard for us. never has" is interesting,
understandable, and should be debated---In this business perception is pretty close to reality!
With greatest respect and just IMHO but a stock is either a buy or a sell---
Here are two questions- would you buy the stock on Monday at $10.12 if
you did not own it?--Is there some other stock that you would rather buy,
if you would not buy PSEC?
Well to answer your question--and this is only my opinion but they are NOT thinking---
The good news is I do not think they are crooks---greedy perhaps but
not crooks---what we do have here is incompetence and arrogance---which
seems to be pretty prevalent throughout much (not all) of Corporate America--We have a good
example here ---the outside shareholders (i.e the OWNERS of the company)
are not being kept informed --ARROGANCE seems to me to be the best word to describe
Pip's management at this time--- sad, but true IMHO--
Management should be given credit for picking attorneys that were better
than Siga's attorneys---"we outlawyered em"---at least up to now---
Siga seems determined to demonstrate the principle that if they are going
to go down in flames---take everybody else with them---
Thanks fuji as always-- Yes---liquidity an important consideration in today's market environment--
Spent some time on the10K--I wanted to check on the NOL's---they are
substantial and a real "hidden asset" IMHO
NOL's are currently around $50 Million, and although some are going to
expire in the next 2-3 years, there will still be $40 million NOL'S not
expiring until 2020-2022.
Company will not be paying taxes for a long time---
Also, NOL's do have some value if BSQR were to be acquired, although
NOL's not as valuable to an acquirer, as they are to BSQR as stand alone co.
Next year, assuiming profitability anticipatd to continue in the future, there
is a good chance IMHO that valuation allowance will be rversed, and
deferred tax asset (approximately $14 million+/- will show as an asset
on the balance sheet with a corrresponding increase in retained earnings
(a one time non cash flow event but would likely be perceived as a positive
by the "Street".).
Company needs to be able to get operating margins into the 7-8% range
over next few years---would result in operating EPS of $.50-$.60---
I am hopeful that with continued progress, this company could be accorded
a market cap of at least one times revenues later in 2015-early 2016. Also
hope it will be possible to meet Mr. Chase in near future---he seens to be
doing an excellent job in turning this company around.
Thanks for your insight on this--
Do you think class action suit will be forthcoming against Siga officers and directors?
Not sure but I seem to recall fees are also computed on uninvested cash whereas some
BDCs do not follow this practice---