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PRO articles cover stocks that fly under most investors' radar screens.
American Capital: 50% Upside With Downside Protection
- American Capital (ACAS) is a BDC which is generating strong cash flow but not paying dividends due to a large tax loss carry forward.
- Its current net asset value (NAV) is $20.12 so that it is trading at a discount of 31%.
- ACAS is planning to implement a restructuring which should unlock its true value with the resulting equities trading at or above current NAV.
- If, for some reason, the restructuring does not take place, ACAS will almost certainly resume share repurchases which will drive the price up to the $16-17 level.
- NAV will tend to increase at roughly 10% per year while this scenario is playing out - providing further downside protection.
American Capital Is Attractive Below $15: Here's Why
- American Capital (ACAS) current price of $14.73 offers the investor a discount of 26% to the true value of $19.81.
- ACAS management has been shareholder oriented and is currently exploring restructuring alternatives that may unlock substantial latent value.
- ACAS has a subsidiary, American Capital Asset Management, which may be the focus of the restructuring and which could generate substantial value for investors.
Municipal Mortgage & Equity: Big Upside For Limited Downside
- MMAB is worth at least $2.00 a share.
- This value does not include several potential windfalls buried in the balance sheet.
- The biggest is a massive ($405.9 million) net operating loss carry forward.
- Other goodies include a tax credit and residual interest in managed funds.
- Management has executed brilliantly and is shareholder oriented.
- Digital Cinema Destinations Has Much More Upside Than Downside
- iStar Financial: Enigmatic But Attractive