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Highland Funds I - Highland Income Fund (HFRO)

NYSE - NYSE Delayed Price. Currency in USD
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8.97+0.07 (+0.79%)
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  • J
    Joe
    Incredible how the NAV keeps dropping amid an exploding market rebound.
  • T
    Turbo
    The NAV is holding up really well but the stock price keeps dropping. We are now seeing over 35% discount which I am looking at as a good buying opportunity. What am I not seeing that is driving the stock price down?
  • J
    Joe
    2 years ago HFRO sold at a premium and now at a 35% discount. Did the portfolio really change that much?
  • J
    Joe
    So are any of the assets the fund holds asset backed?
  • J
    Joe
    Share price keeps going down and NAV hanging in there. Now at 34% discount.
  • R
    Ray
    The assets are certainly difficult to understand. The largest position is Creek Pine Holdings at 16% of the portfolio. Given that this holding is a large parcel of timberlands, it is difficult to value. However, with lumber prices up 170% this year, and fires ravaging timberlands out West, I would think this asset is worth a lot more today than it was a year ago.
  • J
    Julian
    How is it this fund is trading at a 35% discount. If the $40M hasn’t been booked yet, that implies a 40% discount. What am I missing? This appears like a great investment when the market starts humming again. Not only do you get market appreciation and a great yield, but the benefit of a normalized discount.
  • S
    Sigalnb
    HFRO has a $40 million dollar judgment to collect, it has so far not been added to NAV. That would add 7% to HFRO's market cap, or 4% to stock price even if discount remains around 40%.
  • d
    dan
    Jeff, Ray B, others, can you share any update or clarify current status of litigation and process/timeline of when it might be resolved? I saw this in Seeking Alpha article that is quoting 26m instead of 40m and stating it as a done deal on loss of damage award.. "Credit Suisse has to pay Highland Capital Management only $26 million of a nearly $314 million award stemming from fraud claims over a failed Las Vegas real estate deal, the Texas Supreme Court ruled Friday."
  • T
    Tino
    After being alerted to this security by an article on Seeking Alpha, I've done a bit of research, as I am always interested in big yields. Here's what makes me nervous:
    - average loan portfolio ratings have dropped significantly in 2020 (since the last annual report), plus there is some real garbage in there that may go bankrupt
    - 35% leverage, which has increased annually and is now very close to its allowed maximum
    - expense ratio is massive, even after accounting for the leverage interest paid
    - they have a plan in place to buy back shares, but are limited in doing so because they are at maximum leverage
    - who knows what some of these very illiquid holdings are worth

    I think they are eking out enough income to pay the dividend right now, but if they have to write down ANY assets, they are going to be forced to reduce leverage and lower the dividend. It looks like they are squeezed really thin, hence the heavily discounted share price vs the hypothetical NAV. The market is currently pricing in a dividend cut. As of today, I think the preferreds have a better risk/reward ratio. If the leverage/dividend were cut, I would probably start putting in some buy targets. I just don't want to be holding it on that day.
  • d
    dan
    Still nothing public but obviously somebody knows... called Highland also. So here we go - another clear example of insiders having access and trading on news before the common bag holders.. at least this time it's good news.
  • s
    scottschmidt086
    According to their HFRO website NAV is $12.16 as of June 10, 2020. According to CEF Connect their discount is around -34% and their average discount is around -15%. Does anyone know why the current discount is so high?
  • A
    ALF Tanner
    The long term chart shows that this fund is very good at losing investor money. They also seem to have a fake "yield" that includes plenty of ROC. I also do not trust their NAV as it seems they have some unusual investments that are difficult to value. The discount to NAV and the high "yield" brought me here, but I think I will pass.
  • S
    StevenS
    CS looked terrible in front of the SC....admitted fraud of omission. So what's their argument? they lost at trial and didn't want to pay? so they appeal to punish investors. Awesome.
  • J
    Jack
    Any reason to believe the dividend on this will be lowered in the coming months? The heavy discount makes the yield extremely attractive. Pushing 13%. Even if share price slowly erodes a little further it's worth buying purely for the dividend. What am i missing?
  • S
    StevenS
    The TX SC reversed their court of appeals as is that supreme court's reputation, as they nullified the jury verdict on all theories...a massive and permanent loss for Highland, at the worst possible time
  • J
    Jack
    The climb begins
  • S
    StevenS
    These days NAV isn't calculable with any degree of confidence at this time. It isn't like they own gold.
  • J
    Julian
    Has the $40 million been booked yet into the NAV of the fund?
  • Y
    Yahoo Finance Insights
    HFRO-PA reached an all time high at 23.82