Alan - I tried to contact via email address that I've used in the past, but it bounced back. Do you have a current address for her ? Actually, I don't know why I bother because the co. has never responded to legitimate shareholder queries and comments. Your intelligent posts are probably what keeps me from abandoning this position. Thanks !
In the past I could reach Helen Xu, in management, via email ;not that I ever got a response to my questions or comments . Now her email address is no longer functioning. Shareholders can only hope that some of the institutional shareholders are able to influence management to act in the interest of shareholders .
I have followed the BDC sector for several years ;and, sadly, currently own several BDCs . This sector seemed to be appropriate for income investors. I am at a loss to understand why a number of BDCs with steady dividends and selling well below NAV are floundering. I am aware that excessive management fees and energy exposure have contributed to the fall-off in share price.
Two examples ( these are NOT recommendations) of undervalued BDCs , IMHO , are Medley Capital (MCC) and New Mountain Finance (NMFC). MCC has an NAV of $11 yet sells for about $6.46, with a 15% dividend. Historically the NII has covered the .30/quarter dividend ;estimates for the next 2 years also cover it. 5% of the portfolio is energy related. Share repurchased recently increased to $50M. Management fees recently reduced. Non-accruals = 2% . In December, two analysts re-iterated an outperform and a buy.
I have no opinion on CMO common shares. I am watching CMO preferred E , which pays 8% at the current price of $23.17 ; it's a preferred that I have owned in the past.
I do own shares in CYS. While the co. did lower the dividend by .02 in Sept,2015, it does cover the current divi. CEO Kevin Grant is quite knowledgeable. Currently selling at over 30% discount to book . Continues to repurchase shares ("Best use of capital now (10/21/15) are buybacks. As of that date still had $184 M in repurchase program. I'll await next earnings call (probably early Feb.) before deciding whether to add shares .
While no stock is immune to a sharply declining market, I continue to view ARI positively -recent dividend increase , implying that the dividend is secure ; ROE = 12.8%, up y-o-y ; $1B in loans completed in 2015, all at floating rates robust pipeline, selling at discount to NAV , insiders own 17% of shares. In this low yield environment, 10% dividend continues to have appeal for this income investor.
While the yield based on current price seems too good to be true, I believe that MCC can maintain the current .30 quarterly dividend for the following reasons - historically co. has covered dividend with NII ; estimated earnings for next 4 -6 quarters will cover current dividend ; recent increase in share repurchase program suggests that co. has cash to cover dividend .
I was told by IR in early Nov. that energy exposure was 15%, but that this included utilities. During the 3rd quarter earnings call, the co. stated that " the energy exposure is senior debt, backed by solid assets." We shall see.
Alan - as a GURE long, I am encouraged by your usually optimistic outlook. Yet I cannot understand how a co. with $2.60 per share in cash can be trading in the $1.50 range ; or why the co. wouldn't buy back shares . I have found management & IR unresponsive to shareholder queries. Apparently the term " shareholder value " is not translatable into Chinese.
I do appreciate your insightful posts on GURE. The two ways for a co. to "reward" shareholders are by instituting a dividend or by buying back shares. This management has not seen fit to buy back any shares (to my knowledge ) under the existing trivial $2M share repurchase authorization. So talk of initiating a dividend seems unrealistic . For this management, "shareholder value" is an oxymoron.
While the possibility of a dividend cut is always a concern for BDC investors, PNNT has .53 per share of undistributed income. This should provide some buffer if future earnings fall a bit short of the current .28 quarterly dividend.
It is my understanding PNNT's energy exposure is " senior debt backed by solid assets "( source -11/10/15 earnings call ). The 6% energy exposure quoted below is accurate. I question the comment about PNNT "owning " two energy companies.
Management's explanation for the buyback as stated in the 11/12/15 3rd quarter earnings call was that the $100M share repurchase would "accelerate the return of capital to shareholders" and " drive improved ROE & EPS ." The dividend will be discontinued after payment of the .25 dividend on 11/20/15 whether a shareholder chooses to tender or not.
Obviously the common share price is being held back by concerns over a possible cut in the .64 dividend. Yet the preferred B shares continue to decline in price despite a current dividend of 12 %. Not only are preferred dividends much safer than common, but the co. did announce that the money authorized for repurchase applies to both common and preferred shares. Unless RSO goes belly-up, the return on preferred shares is remarkable. What gives ?
I appreciate your insightful analysis of GURE, and am encouraged to hold the stock based on your optimistic outlook. Yet positive developments ( bromine pricing, NG holdings ) seem to have no positive effect on the share price. I believe that management has no concept of the term " shareholder value " as evidenced by their failing to consummate the $2M repurchase authorization despite having (supposedly) $120M in cash .
The current FFO payout ratio is 63% , so the co. could easily increase the dividend. The dividend has been at .17/quarter for the past year and a half. Dividend aside, share repurchase is another way to reward shareholders. In this regard, 1.6M shares out of the 10M share repurchase authorization ( July) have been repurchased. I continue to believe that LXP is undervalued .
I'm sure that a number of shareholders, including myself, have contacted FSC in the past . Obviously FSC's management has little regard for its' shareholders. Maybe this initiative by River North will produce some needed change. I would encourage every shareholder to make FSC aware of their support of this initiative.