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Prospect Capital Corporation Message Board

donf22 7 posts  |  Last Activity: Dec 24, 2014 1:01 PM Member since: Jul 27, 2011
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  • Q3 NII $.25, Dividend $.25. Coverage 1.0 NAV 12/31/14 $7.51 increased over 9 mos to $7.67. Low leverage Liability to Assets .44, Debt to Equity .78 Interest coverage 3.89 Expenses as percent of income 17.8% versus average of 33% for industry (this is a big plus) NII increasing modestly from beginning of year. Seems reasonably solid to me. Other opinions based on data ro actual news welcome.

  • BBEP has a decent hedge book at prices significantly above current oil prices. Does anyone have thoughts on hos this might affect dividend and value of the stock?

  • Several law firms are trying to bring class action lawsuits against ARCP. Any thoughts on how this might go would be appreciated. In addition to ARCP, any form with a big drop in value is being pursued this way, SDRL and Petrobras specifically. My concern is the impact on continuing shareholders like myself. Will the costs mean dividends have to be cut? Would a ruling in favor of exited stockholders mean some assets of ARCP would have to be sold impacting continuing shareholders? Any thoughts are welcome.

  • donf22 donf22 Nov 26, 2014 9:57 PM Flag

    This is a really bizarre juxtaposition. SDRL issues are the huge drop in oil prices which make their oil drilling customers less willing to drill. This combines with the large number of rigs under construction that SDRL has to pay for with or without clients to lease them. Fly is leasing to airlines which are financially the healthiest they have been in 20 plus years and actually benefit from the drop in oil prices.. FLY buys only existing planes which it finances and generally leases at time of purchase. Fly has no planes under construction and thus no obligations to make forward payments.

  • There is a perception that AYR is much larger than Fly. The gap in terms of number of aircraft has narrowed with substantial sales by AYR to lower their average age. Fly now has 121 aircraft with an average age of 8.2 years and lease term of 4.9 years. AYR has 19 more aircraft = 140 with and average age of 8.6 years and lease term of 5.0 years. Size difference is in book value Fly $3.477 billion / 121 = average BV of $28.7 million. AYR $5,233/140 = $37.3 million per aircraft. Must be in size mix. Note - when reading AYR's quarterlys, the 2014 numbers are on the right. If you read the leftmost column you are reading 2013 numbers. An odd convention.

  • Took a look at AYR and FLY return on capital. Used the measure of Adjusted Earnings before Depreciation (so interest was paid) versus Book Value. AYR quarter annualized 29.6%. AYR 9 Mos annualized 31.1%. FLY quarter annualized 38.1% and 9 Mos annualized 34.7%. FLY better returns on equity. Selling, G&A - AYR for quarter 7.78% of revenue and for 9 mos 7.21%. FLY for quarter 9.40% and for 9 months 10.83%. Fly more expensive by 1.62% for quarter and 3.62% for 9 months. For the quarter the gap narrowed as AYR's percentage went up and FLY's went down. Even with the expense advantage AYR's return on equity was less than FLY. FLY dividend yield on 19-Nov-14 stock price is 7.60% vs AYR 4.32%. Fly better yield by 3.28% or an increase in yield of 76%. When you look at the companies financials and results, they are pretty close with FLY being excessively punished for an Ireland address, external aircraft management, and what is portrayed as annoying self serving management .

  • Not a single asset was destroyed. Not a single lease was terminated. The lawyers will try for a settlement. If it requires that assets be sold to make payments, they will have damaged all existing shareholders to benefit the selling shareholders. There should be a class action lawsuit against them.

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