Look at the insider buys over the past couple of months, and the price they were willing to pay. Personally, I consider it a buy - even today - and would if I wasn't already holding 85,000 shares. Still a good environment for BDC's.
Sentiment: Strong Buy
As a U of Mich alumnus, I have to mention Austin Hatch, a freshman on the Mich basketball team.
In 2003, he was in a small plane crash in which his mother and both siblings were killed. Then, in 2011, he was in another small plane crash [both piloted by his father] in which his father and step-mother were killed. Twice he survived crashes in which everyone else died. He suffered severe injuries the second time, and Michigan could have pulled a promised basketball scholarship ... but they didn't. Last night, he scored his first point in a Mich uniform, and the house came down as everyone knew his story. He hugged his coach like he was his father, and his teammates like they were brothers.
AFFO. GAAP includes things like unrealized gains and losses on assets [mark-to-market] which may never be realized. AFFO is much closer to cash basis which is the money available for divies.
"Through October 31, 2014, we have originated commitments of CRE loans totaling $641.7 million."
That means about $166M was added in October, or more than 3 times the rate of the first 9 months. The divy looks pretty safe to me.
I think a lot of people - including pro's - think like Cramer: high yield = high risk. Their analysis pretty much stops there.
We had a huge sell-off in 2011; Dow was down 3,000 pts. Yet, everything recovered, and sellers were punished. One thing I like about BDC's: they invest in U.S. companies so exposure to Europe is minimal.
Hang in there ... market is up almost 100 right now, and high yield will be coming back soon.
The last time we had a Repub Prez, we had the biggest stock market crash since 1929. The last time we had a Clinton, we had several years of surpluses.
Thanks for the correction. $2M per year is still not crazy high by Wall Street standards. PSEC has to compete for people, and money talks on The Street just like it does on this board.
I think this analysis is accurate, but comment if its not.
Total management fees = $50M per year
Total employees = 100
Average per person = $500,000 per year
That sounds like a lot to me, but, by Wall Street standards, it's a deal. It's easy to find guys making 100 times that or even a 1,000 times that.
Are you saying that the Democrats have not been patriotic? What is patriotic ... dropping bombs on the target du jour? I have hated every Repub since, and including, Ronald Reagan ... anybody is better. And no more Brush in the WH.
Hey Carl ...
I was in the USAF during the Viet Nam War, and flew over 200 combat missions. I had a reunion with about 50 of my flyer friends this past summer. Best Wishes to you.
One reason is that PSEC, and all other BDC's, were removed from the Russell 2000 a few months ago. Many institutions simply buy the ETF's that tracks the Russell, or other indexes. So, BDC's get left out of those institutional portfolios. I don't know how big of a percentage that is, about 7% - 8%, I think, but it's part of it. And, as mentioned below, PSEC has very high insider ownership compared to other stocks.
In that case, the new companies would have to buy any assets they wanted from PSEC .... the assets won't be just handed over to a new company with the existing owners [us] getting nothing.
Agree H ...
I don't think Barry spent over a million two days ago because he had nothing better to do. Does that guarantee a higher PPS for PSEC? Not in the short run 'cause Barry can't control the market, but it surely means he has confidence in the future. If anyone is not bolstered by the Chairman buying over a million in stock, then sell your stock and have a beer ... have a couple.
I flew intelligence flights from Okinawa to Viet Nam, Laos and the Gulf in RC-135's. Also, was stationed in Cam Ranh Bay TDY for about 6 months total flying RC-130's. Tour was from 1969 to 1971 [30 months]. I've been to Da Nang, and I've watched the gunships and helicopters rain bullets [tracers] on the Cam Ranh jungle at night when the enemy would try to sneak on base. We flew long flights so my 200+ flights were about 4,000 hours. I got 19 Air Medals and a Distinguished Flying Cross as souvenirs.
He said there are lots of deals right now; the hardest part is finding the leverage. Supposedly, that's PSEC's intention with the NAV question ... maintaining their credit facility on which they just got a rate reduction.
DEFINITION OF 'RIGHTS OFFERING (ISSUE)'
An issue of rights to a company's existing shareholders that entitles them to buy additional shares directly from the company in proportion to their existing holdings, within a fixed time period. In a rights offering, the subscription price at which each share may be purchased in generally at a discount to the current market price. Rights are often transferable, allowing the holder to sell them on the open market.
For example, a company whose stock is trading at $20 may announce a rights offering whereby its shareholders will be granted one right for each share held by them, with four rights required to buy each new share at a subscription price of $19. The company will also specify that the rights expire on a certain date, which is usually anywhere from one to three months from the date of announcement of the rights offering.
Companies typically issue rights to give their existing shareholders the opportunity to buy additional shares before other buyers, and also to enable current shareholders to maintain their proportionate stake in the company.
I don't know why these guys are so harsh with you ... seems like a totally reasonable question to me. Yes, since the shorts pay the divy on borrowed shares, the company doesn't have to.