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American Capital Agency Corp. Message Board

quadruplemalt 14 posts  |  Last Activity: Jan 21, 2016 5:34 PM Member since: May 7, 2000
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  • quadruplemalt by quadruplemalt Jan 21, 2016 5:34 PM Flag

    As the song suggests, some of the folks on this board just need to get over the pre-crash stuff and all the festering hostility to management, and deal with the present and the future.

    The stock has done well since the crash and has some interesting stuff going on. The constant whine and drone makes me wonder why the disgruntled haven't just moved on.


    btw - Jennifer Nettles does a mean duet with Idina

  • Reply to

    Here we are down over 2% right now

    by lenyw Jan 13, 2016 12:45 PM
    quadruplemalt quadruplemalt Jan 13, 2016 4:52 PM Flag

    We're down .28 YTD, or just over 2%, off less than one third the market. This morning we were up year to date. What does it matter?

    Management can't control exogenous factors. Buyout prices/values are affected not only by what management does, or how much the CFO is paid, but also by varied issues affected the economy, investor psychology, market outlook, prospective buyers prospects, etc. etc.

    No body has enough information to make a rational assessment of the CAO issues - just potshots from afar. It is a fact that employee retention during a sale is a practical issue.

    I recommend patience and detachment.


  • Reply to

    Maintaning perspective

    by quadruplemalt Jan 9, 2016 6:06 PM
    quadruplemalt quadruplemalt Jan 12, 2016 5:06 PM Flag

    lake - sorry to hear you're grumpy too. When I become disenchanted with a story or a management I move on.
    To my knowledge no one is forced to own ACAS shares - presumably that decision is based on investment analysis of all facts....
    My post had to do with perspective - meaning some good along with the bad. The grumpy post is dismissive of the good and regurgitates the bad, leaving me questioning perspective.
    I hope ACAS does pulls together a good outcome. It if doesn't I have myself to blame for my investment.


  • Reply to

    Maintaning perspective

    by quadruplemalt Jan 9, 2016 6:06 PM
    quadruplemalt quadruplemalt Jan 10, 2016 6:23 PM Flag

    You sound grumpy.


  • quadruplemalt by quadruplemalt Jan 9, 2016 6:06 PM Flag

    I get the criticisms of management - but they have done some things right.

    In fact, since 12/31/11, holding ACAS shares until today (then 6.73, now 14.26) produced a 111.89% return. That performance bests other BDC that I follow away (e.g. MAIN 87.14%, PSEC 18.97%, HTGC 80.06%, ARCC 31.35%, etc. etc.), SPY returned 64.97%, and QQQ did 95.73%.

    So, please - you've got to give credit where it is due. Their unorthodox approach to dividends (or not) and share repurchases has (ahem) paid dividends. So let's keep all of this dour sentiment in perspective.

    We don't know what's in store with the sale and what values will be realized. I have some hope that management and the Board's sale savvy will be considerable. I appreciate their out of the box thinking. Money parked in this BDC four years ago can buy all of its competitor shares more favorably than it could have four years ago.

    They've done some things wrong but it's been a winning investment. With any further bump in shares from actual news their comparative returns will only improve.


  • quadruplemalt quadruplemalt Jan 3, 2016 6:09 PM Flag

    While activist investors racked up big successes last year, they didn’t have much luck lifting the shares of specialized financial firms known as business-development companies. A profit pinch has beset BDCs, the congressionally created venture industry that invests in small businesses and then pays out most profits, free of corporate taxation, to public shareholders. Shares of BDC funds dropped by double-digit rates in 2015, leaving their stocks at sharp discounts to their net asset values and provoking angry fights between some BDCs and their outside shareholders.

    But the sun peeked through the gloom a month ago, when Nasdaq-listed BDC American Capital (ticker: ACAS) abruptly caved in to the demands of activist firm Elliott Management and agreed to a “strategic review” that could lead to American Capital’s breakup or sale at a value probably higher than the stock’s recent $14. American Capital’s independent directors are due to report on breakup plans and bids by Jan. 31. Elliott says American can realize an $18-to-$23 per share valuation. At the midpoint, that would be about 45% above recent levels. Such a valuation would add force to other activist campaigns at BDCs such as TICC Capital (TICC) and Fifth Street Finance (FSC).

    As recently as Nov. 6, American Capital’s managers were proposing a reorganization they claimed would revive the Bethesda, Md.–based company’s stock. The proposal—to separate its BDC fund and its asset-management businesses and retain current management—didn’t go over well with outsiders. On Nov. 16, Elliott unveiled an 8.4% stake and a blistering letter to the board, complaining the plan would reward managers who had already been overpaid for poor results. The New York hedge fund firm, overseen by founder Paul Singer, had an intimidating record of rattling boardrooms at the likes of Juniper Networks (JNPR).
    Enlarge Image

    But just a week later, American Capital waved the white flag and hired bankers to consider a sale. That quick surrende

  • Reply to

    IRA question.

    by copanylava Dec 2, 2015 3:13 PM
    quadruplemalt quadruplemalt Dec 3, 2015 4:38 AM Flag

    Of course one major allure of an IRA is the contribution deduction in the year funded, entirely apart from subsequent investment gains, thus enabling investment returns on pre-tax dollars....


  • quadruplemalt quadruplemalt Nov 27, 2015 5:18 PM Flag

    NMB - I'm at a bit of a loss to imagine a company with modest ROC trading at a nice premium to book....but perhaps such an animal exists.....

    We've heard about AINV and ARCC - do you have any other names in mind as possible suspects?

    For my money though, selling ACAS assets in pieces might be the mechanism to find premium buyers who can absorb assets without needing to acquire operating overhead to manage -- and then perhaps it could all add up to more than selling in one lump. Seems like few buyers of scale (BDCs) out there - but a number of BDCs hunting for investments with better operating metrics.


  • quadruplemalt quadruplemalt Nov 25, 2015 5:54 PM Flag

    NMB - I hope you're right about the prospects. For my money the ACAS assets are substantially fungible, so the premium would be deserved for a "greater than the sum of the parts" analysis - which is not impossible -
    or because of a premium deserving management or operating acuity. Absent those I don't see the likelihood of substantial upside to BV in this environment (hope I'm wrong).


  • quadruplemalt quadruplemalt Nov 25, 2015 4:01 PM Flag

    Well I'm in favor of the highest possible pps outcome - but the universe of potential acquirers willing to pay bv+ would seem small.


  • quadruplemalt quadruplemalt Nov 25, 2015 3:31 PM Flag

    If ARCC acquired ACAS at a greater discount to book than its own it would be accretive to ARCC bv.


  • Reply to

    #$%$ happened today???

    by nickspinner Nov 12, 2015 4:44 PM
    quadruplemalt quadruplemalt Nov 12, 2015 8:02 PM Flag

    WMC stock price closed on Dec. 31, 2011 at 10.52, adjusted for all dividends received.

    It closed today at 11.01.

    In almost four years the simple return has been 4.66% total - or about 1.2% per year.

    What's that worth to you?

    The problem is that prospects going forward aren't that rosy.


  • Reply to

    Settler's Crossing

    by quadruplemalt Nov 12, 2015 6:51 AM
    quadruplemalt quadruplemalt Nov 12, 2015 8:57 AM Flag

    I've read all the pleadings/decisions through the June 29th decision - obviously the judge hasn't been too impressed with Lennar, to say the least. I really don't understand the logic of Lennar continuing to run up legal/interest expenses with such a low prospect appeal.
    Almost impossible to imagine the SC would hear an appeal - in the meantime we're getting 12% unlevered and already have too much cash.


  • quadruplemalt by quadruplemalt Nov 12, 2015 6:51 AM Flag

    In an order dated June 29 by the US District Court judge Lennar was granted its request to stay enforcement of the amount due iStar pending its appeal of the judgment to the 4th Circuit Court of Appeals. The order provided that Lennar had to post an appeal bond in the amount of $223,440,000 within two weeks of the order, and that interest would continue to accrue at 12% during the appeal process.

    Presumably it will take some months for the 4th Circuit Appeals Court to rule, at which point, if the judgment is affirmed, the litigation will be over....

    If anyone has further updates please post....


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