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Pitbull Trading
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Strongly believe in Nassim Taleb's theories. Have a strong focus on the market psychology and behavioral finance aspect of equity trading. Prefer longer term trades for best risk/reward profiles. Still believe Buy & Hold strategies can be relevant in the current market.
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  • Corporate Debt Buying Opportunity - AFC 0 comments
    Dec 12, 2009 3:50 PM | about stocks: AFC, ARCC

    AFC is the publicly issued debt of the company ALD, which is currently in the process of being bought out by ARCC, in a deal that should close at the end of Q1 2010. Check out AFC's profile here: quantumonline.com/search.cfm . I think that the chance of ARCC not going through with the deal, and/or not assuming the debt of ALD is very minuscule, and that at the current yield of the debt (~10%), AFC offers a great payout while waiting for the upside in price appreciation. To make this an even better deal, the call date on the bonds is 4/15/2012, so ARCC will most likely choose to pay the PAR ($25) at that time and retire the debt.

    This is a solid play for investors looking for a low-risk, high yield play with great upside potential, most other debt assets of this type are priced to yield a more appropriate 5% or so, yet this opportunity has so far been overlooked by the investing community.

    Disclosure: Long AFC

    Stocks: AFC, ARCC
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