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Bulldog Investors Sniffs Out Value in the Pacholder High Yield Fund

- By Kyle Ferguson

Bulldog Investors LLC, an investment firm headquartered in Saddle Brook, New Jersey, with the philosophy of "Unlocking Value," continues to buy shares of the Pacholder High Yield Fund Inc. (PHF).

Bulldog Investors added 31,569 shares of the Pacholder High Yield Fund, in eight transactions, between March 6 and April 12.

The purchases came at an average price of $7.8 per share according to SEC filings.

Bulldog Investors now owns 1,126,222 shares of the company.


Headquartered in New York City, Pacholder High Yield Fund is a closed-end, diversified management investment company. The fund's investment objective is to seek a high level of total return through current income and capital appreciation by investing primarily in high yield, fixed income securities of domestic companies. Under normal circumstances, the fund invests at least 80% of the value of its assets in high-yield debt securities.

The fund invests in floating rate loans and other floating rate debt securities. The fund invests in various sectors, such as consumer discretionary, automobiles, consumer services, hotels, restaurants and leisure, household durables, media, specialty retail, food and staples retailing, food products, personal products, oil, gas and consumable fuels, insurance, health care technology and construction and engineering.

Pacholder High Yield Fund has a market cap of $102.02 million, an enterprise value of $142.06 million, a price-earnings (P/E) ratio of 5.96, a price-book (P/B) ratio of 0.99 and a dividend yield of 7.20%.

According to GuruFocus, the company has a 5 of 10 financial strength rating. It has an equity-asset ratio of 0.71 and an interest coverage of 18.65.

The company has a 4 of 10 profitability and growth rating. It has an operating margin of 75.34%, a net margin of 188.65%, return on assets (ROA) of 12.37% and return on equity (ROE) of 17.78%, ranking it higher than 82% of the 1,518 companies in the Global Asset Management Industry.

The company is worth $15.27 according to its Graham number. The Graham number is based upon legendary value investor Benjamin Graham. The Graham number is the upper bound of the price that a defensive investor should pay for the stock.

Over the previous year, Pacholder High Yield Fund's market price has gained an estimated 18%.

Pacholder High Yield Fund is trading below its intrinsic value according to the Peter Lynch chart below.

Disclosure: Author does not own any shares of this company

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This article first appeared on GuruFocus.