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Albert Alfonso  

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  • Prospect Capital: The Strong Quarter Should Help Silence The Bears [View article]
    Old Wise1,

    You can't have it both ways. You are claiming that Javelina is in denial regarding the capital loss. Yet, I showed you that with the dividends this loss would be recovered in little over 2 years.

    On the topic of assuming, do you really think PSEC will forever stay at a 30% discount to NAV? The norm for this stock is to trade near par.

    No one here is pumping anything. PSEC is discounted, just like many other high yielders (mREITs, etc.). So far, the bears have not made any compelling arguments for why this discount should persist.
    Aug 28, 2015. 01:14 PM | 3 Likes Like |Link to Comment
  • Prospect Capital: The Strong Quarter Should Help Silence The Bears [View article]
    dhauff,

    I am looking a bit longer term. I am worrying that the loan pipeline could be drying up. Economic growth has been sluggish. PSEC could then be faced with incoming capital with no where to deploy it, which would hurt earnings. So far they have been good regarding quality control on their investments.

    On the other hand, if PSEC gets smaller, they could focus that capital on buying back stock.
    Aug 28, 2015. 01:05 PM | Likes Like |Link to Comment
  • Prospect Capital: The Strong Quarter Should Help Silence The Bears [View article]
    Old Wise1,

    Assuming the cost basis is $10 per share and the share price stays at $7.50 and that the dividend stays at $1 per year:

    Cost basis: $700,000
    Current value: $525,000

    No DRIP: 30 months ($175,000 in cash from dividends and 70,000 shares worth $525,000)
    With a DRIP: ~26 months (from owning ~93,333 shares worth $700,000)

    So in other words, not that long.

    Of course, this does not factor in the dividends received since the shares were purchased. PSEC was last at $10 nearly a year ago. So you can factor in at least another $70,000 in cash dividends.
    Aug 27, 2015. 10:15 PM | 2 Likes Like |Link to Comment
  • Prospect Capital: The Strong Quarter Should Help Silence The Bears [View article]
    Leverage actually went down Q/Q. They have the dry powder.

    Investment activity is a very important metric. The $22M net number is one of the smallest on record for PSEC. Keep in mind they had a quarter a year back with over $1B in investments.
    Aug 27, 2015. 10:59 AM | Likes Like |Link to Comment
  • Prospect Capital Needs To Combat The Persistent NAV Discount [View article]
    The ARCP issue was not inflating asset values. They overstated a non-GAAP metric from one quarter to another to make themselves seem more profitable than they actually were. The errors were discovered and intentionally hidden from investors. The dollar amounts were tiny, but all trust with management evaporated.

    What you are accusing of PSEC is much more serious in nature. Are you really saying there is a conspiracy to cook the books? They just completed their fiscal year and the NAV actually went up. These results were audited.
    Aug 27, 2015. 10:50 AM | Likes Like |Link to Comment
  • Prospect Capital: The Strong Quarter Should Help Silence The Bears [View article]
    rogerk2,

    The yield based on NAV is under 10%. ($1/$10.31 = ~9.70%).
    Aug 27, 2015. 02:39 AM | 6 Likes Like |Link to Comment
  • Prospect Capital Needs To Combat The Persistent NAV Discount [View article]
    Bill,

    A DRIP program is not there to raise capital. Rather, it provides a method for long-term holders to gradually accumulate their position at a very low cost. DRIPs are very shareholder friendly and most stocks have a plan in place. Many also have a buyback program to ensure no dilution occurs.
    Aug 26, 2015. 08:46 PM | Likes Like |Link to Comment
  • Prospect Capital NII in-line, misses on total investment income [View news story]
    Very strong results. NII covered the dividend, NAV up a penny. There is also the chance of a special dividend.
    Aug 26, 2015. 05:02 PM | 10 Likes Like |Link to Comment
  • VEREIT - A Major Buy From The New CEO [View article]
    Wilco1,

    Regarding the looming rate hike, have you seen the price action in treasuries? It went from a near certain two 25 bp increases in July to a 50/50 chance for one 25 bp increase by year end.

    In other words, I do not think the market knows where rates are heading. It is worrisome that even the Fed seems to be using the market as a gauge rather than say inflation/ job growth data.
    Aug 26, 2015. 04:02 PM | 4 Likes Like |Link to Comment
  • VEREIT - A Major Buy From The New CEO [View article]
    That link should be corrected soon.
    Aug 26, 2015. 03:56 PM | 1 Like Like |Link to Comment
  • Crude Oil sneaks into positive territory as crude inventory decline [View news story]
    Bearcatbrant,

    Not true.

    from Reuters:

    US GASOLINE CONSUMPTION over last 4 weeks averaged 9.6 million b/d, around +530,000 b/d above prior year.

    Drivers are using much more gas due to the lower prices.
    Aug 26, 2015. 03:48 PM | 4 Likes Like |Link to Comment
  • Linn Energy Gets A New CFO [View article]
    JCCIII,

    That is a really hard question to answer. As I noted above, I do see some value in the common, but getting to it is quite hard.

    The mostly likely scenario would be a prepackaged bankruptcy where the creditors become the new shareholders. I do not see that coming until 2017, assuming no oil price recovery. The common unit holders would more or less be wiped out if this happens.

    As for any other options, LINE already sold some units earlier this year which crushed the share price. They are doing the best now, focusing cash flow towards debt.

    I can also see some large asset sales, assuming a modest oil price recovery.

    There is also the possibility of private equity getting involved. Taking LINE private may be the best case scenario for the common outside of higher oil prices. After all, they did start off as part of the Quantum fund.
    Aug 26, 2015. 01:33 PM | 1 Like Like |Link to Comment
  • Prospect Capital Needs To Combat The Persistent NAV Discount [View article]
    Lowering the fees, if it results in a normalized share price, is a win-win. Investors are happy (they'll see higher returns) and PSEC can start growing again using its equity.

    PSEC management has every incentive to get rid of the NAV discount. I believe we'll get some major news today. If nothing happens, we could see the discount widen.
    Aug 26, 2015. 11:57 AM | Likes Like |Link to Comment
  • Crude Oil sneaks into positive territory as crude inventory decline [View news story]
    It's funny how oil sells off with a "surprise" buildup but does nothing when inventories decline. That really tells you who is driving the price action...
    Aug 26, 2015. 11:00 AM | 15 Likes Like |Link to Comment
  • Linn Energy Gets A New CFO [View article]
    There is plenty of blame to pass around.

    LINE got big when oil was high using high-yield debt.

    Almost all excess cash was distributed -- no retained capital.

    With oil low, the capital structure is coming under pressure.

    Is there some value here? Yes, though via the debt and not the common units. However, even the bonds need higher oil prices sooner rather than later.
    Aug 26, 2015. 10:54 AM | 1 Like Like |Link to Comment
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