If they have more shareholders and more capital, I really don't see the pps appreciating, except that we get a distribution from the eps since 90% must be paid out. God forbid the economy turns South many of these loans will go into default or the borrowers go to Chapt 11. However, as long as they manage our money they get a fixed percentage of the revenues. I may have this wrong, but I'm concerned should we have another recession. I don't see their siding with the shareholders except pay them a distribution when there is a DCF. In other words the investor has all the risk, and the management has none.
As I remember MCC is managed external, probably by the group that created it. Does anyone know what their mgmt. fee is, and what incentives they have?. My fear is that they are diluting to death to increase their intake, until the house of cards comes down for the little investor. TIA.
BTW... I bought TCAP sometime back for a similar reason, except that they are more in seconds and mezzanine. My conclusion is that these BDCs will all do well on the up part of an economic cycle, but unload when the bubble starts. I'm basing my approach on that premise.
I took a first long position here the other day at 13.38, before knowing that these jokers were coming out with a 5M IPO, and I was going to beat the ex div date. Talk about timing! Oh, well.
I sense that this board has some very informed and sharp investors or traders by the comments here. The way I see it an 11% yield is way high, and there may be 2 reasons for it. Either the business is too risky and it demands a high return, or the economic cycle is such as to make the MCC investments attractive. If the second reason is true, then the pps should be at a level where the yield is about 7%. Am I misssing something here?
Especially right after the distribution being paid. My only guess is that there is institutional interest (ie high volume) for whatever reason. The other puzzle is that CEQP did not move the same way (maybe because of their terrible eps loss).
IF you are right then we will be in great shape. IF things turn sour, I will wait for the stock to go below 25 and add. My 6th sense tells me that the road ahead will be bumpy for them and the Market. GL
What you are really saying is that they will be borrowing to pay these distributions for at least another year. So we should be praying that their new acquisitions, once on line, will bring in the extra cash flow to cover these distributions. The way I see it we may have to wait until 2016. I might dump over 30 and wait for a better price. a payout of 2.74 seems excessive to me based on what they have now. Thanks
I bought 60% of my position at 41. It translates into an 8.5% yield assuming they don't cut the distribution. Not a bad return these days.
The fact that they are reducing says that they found a lot of non paying tenants and empty space. I think we will be seeing a fire sale soon. JMHO. Also, the sale of SIR shares says they needed cash to fix the problems here. Not a good picture for the short term.
What price would you consider this to buy, considering the dividend and their line of business (storage and pipelines seem to be stable areas, don't you think)?
Contractor, I can relate to how you feel. It's a dull stock to say the least. You need to understand that this is a dividend stock and not for growth. It's in the Utility category. You can't complain with an 8% return. What bank gives you that? If you bought high you can't blame the company. The way I see it is that they will pay down debt over time, giving them more funds for distribution. That might drive up the pps. But over a long period. My big fear is warm climate. IMHO. If you want growth you are in the wrong place. Good luck.
Will sell at 4.50. Great stock to trade right now. It won't go anywhere for years if anybody is willing to wait, and then nobody knows what will happen in the Courts.
A lot of the dividend stocks went up the same way, for whatever reason. Picked up some more down at 41. I think I have enough of this puppy, Good dividend, too. GLTA.