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John Dalt is a retired small business owner who is now operates galtstock.com for stock investors and traders.
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  • MCGC, Opportunistic Buy 0 comments
    Sep 22, 2012 9:11 AM | about stocks: MCGC

    I recommend an opportunistic buy in MCG Capital Corp. (NASDAQ:MCGC). MCGC is a private equity firm that makes investments in middle market companies. It also provides financing in certain situations such as mezzanine, senior debt and revolving credit facilities. The company was founded in 1990 and is based in Arlington, VA.

    MCGC pays a quarterly dividend. It can adjust depending on how their business is doing. At the present time the annualized dividend is $0.56 payable $0.14 per quarter.

    MCGC typically invests up to $75 million dollars in American companies with revenue between $20 million and $200 million.

    MCGC's revenue was down last year, but we expect the company is planting the seeds of a good year now and will harvest good earnings going forward. We could get an immediate bounce when they next report earnings. We have missed this quarter's dividend but will be in line for November's.

    The company is trading for less than book value, and was knocked down last week on a downgrade by Stifel Nicolaus. Many investors key their decisions on the upgrades and downgrades. We like the fact that The Chairman and CEO, Richard Neu, bought a half million dollars worth of shares this summer.

    Because this is a small cap stock, you must use a limit order to buy this stock. If a rush of buyers put in market orders, the stock could easily shoot higher. The stock looks to have good support at $4.70

    This addition to our portfolio brings us another Dividend Champion paying over 11% annually.

    Action to Take: Buy MCGC Monday at <= $ 4.75 This is a small stock, USE A LIMIT ORDER.

    Disclosure: I am long MCGC.

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