I had bought some SPP after they announced that they were going to restart their distribution. I think that since they have already gone through their own collapse and rebirth that maybe now is when they can best exploit the oil and gas market. Whether by buying more midstream assets or by buying drilling land that has a return at very low oil and gas prices. If I am right they will be a survivor. I should have tried to buy more but the stock is thinly traded and large orders can push the price. Good luck.
By buying back their shares they are increasing their percentage of ownership. In about 3 to 5 years they will probably take the company private and the excuse will be poor stock price performance. What is really going on is a way for management to increase their income while the fools, I mean unit holders pay their taxes for them. For me I am now out since there is many other places to put the money where I will earn more and gain as much or more than them.
I agree with to what you say. My point was that this is a possibility outcome. I would rather have my eyes open to the downside than have a rosy outlook and get clobbered.
I would think a distribution cut would be a reasonable assumption since they can not pay their preferred shareholders in cash. I would expect with a reverse split that the distribution would be cut in half to give them the ability to grow their company and future payouts. Though the history of this company is not very good and I would not put much money here. I would also watch for a price collapse with the 1 for 10 reverse split like what happened to SPP recently. Best of luck to all.
Insiders will not sell with multiple brokers because they still have to fill a form 4 with the SEC. If they are trying to avoid filling a form 4 they will go to jail. If you do not know what a form 4 is it is a form showing their trades that is made public. Also as far as I can see the supposed dumping is an automatic sale of 3394 shares which is usually done to help pay the taxes on their bonus shares given to them by the company.
If you want to see what a real short attack looks like look at KMI. I doubt there are many shorts in PSEC. But I do think that since PSEC hired a PR firm that they are getting the sheep to buy again. If I were still in this dog I would use this rise to be able to get out. Also I am not short, I am a former shareholder who got out a lot higher than it is now.
When you have capitulation you will have a huge down draft followed by a huge updraft with very large volume. You had the down but not the up. What I do think is going on is that there are some who think they are buying cheap when the stock continues to get cheaper. I would wait till you see the management being changed or they lower fees and announce a share buy back that is substantial with debt repayment. PSEC has to shrink before it can grow again. Another big worry is how low can the stock price go before their loan covenants are called and they have to repay debt or face bankruptcy.
Sentiment: Strong Sell
On the CC they said that they were going to pay in all shares and no cash. But they did not say the ratio and I so far have not been able to find it. I hope that they have sweetened the deal since I think they low balled RGP to start with.
You need to go to their website and click on the CC link. Instead of selling I would suggest that shareholders write to IR and ask them to tell management to start defending their book value and buy back shares. If they do not then I would sell.
If you are disappointed then everyone should write to investor relations telling them to buy back shares and support the book value rather than sell shares below book and destroying value and diluting shareholders and then lowering dividends as they are now doing. I wrote to them and said I would not be buying till they change to a more shareholder friendly company.
I sure hope you and those here who are so positive and blinded by your bullishness push the stock price well over $9 so I can buy the puts back. My thoughts are that Buzz had linked to the 10 K that gives fact instead of hope that you have. I too have looked at these assets and think one must be realistic about them. While I also think we are either near or at a bottom in oil and these investments will be alright no one will know till these CLOs are sold for a profit. Bottom line is if you are not concerned with PSEC selling stock below book and destroying book value while at the same time a larger share count is driving down earnings and the dividend then buy and buy big. I want out of this company but do not want to lose any more money. Also I am listening to the CC and when they were about to tell their exposure to oil in the CLOs another person stopped them and switched the subject, so I was right about what they would do.
This is per BDC Buzz; Author’s reply » Darnoc - Check out page 121 of the 10-Q. It shows $235,544,000 of direct oil & gas and $57,372,000 of direct energy. That accounts for 4.5% of the portfolio but does NOT include $1,123,283,000 in CLO investments with a footnote that says:
(1) Although designated as Diversified Financial Services within our Schedules of Investments in Item 1 of this report, our CLO investments do not have industry concentrations and as such have been separated in the table above.
I'm sure this will be discussed on the call
The 4.5% is direct exposure through their investments. This does not include the CLO's that are leveraged. Like I said maybe someone will ask in the CC today. One problem is that the CLOs are leveraged and this can knock down book even faster than their direct investments. You need to dig deeper to get to the truth. I owned another stock once CEG and they buried in their 10K that they were leveraged to something and the leverage collapsed the stock. Not saying this will happen here but leverage can kill a stock.
PSEC today said they have direct exposure of 4.5%. But does anyone know if that includes the CLO's. My thoughts is that it does not. Buzz said they have around another 18%+ exposure in the CLO's. The CLO's are part of the 30% allowed leverage the BDCs can have, so exposure here can be more than they say.
In the conference call hopefully someone will ask how much exposure they have to oil, and hopefully they answer it. Though I doubt they will publically answer the question because of fear of being sued for being wrong.
BDC's have to payout over 90% of their earnings to be tax avoided, but they can keep some of the money and pay an excise tax on it till they pay the money out. I guess you would rather management keep making investments that Might make money rather than buy their stock back that they are guaranteed to earn 20% on. I understand buy high sell low, but I usually like to make money rather than loss it like you.
I would agree with you. I actually would like to buy but I am tired of their management only working for themselves and not the shareholder. I had own PSEC since 2008 but sold to take advantage of the losses I had. If I saw them buying back shares I would join them in buying since this would put a floor under this stock. But seems many here think a dropping book value and dividend is a good thing, buy high sell low. I think the stock is up today because oil is rising and this is good for PSEC since they have a lot of exposure to the oil industry.