Beaten-up American Capital (ACAS) announces the repurchase of 9.1M shares in Q2 - 3% of the...

Beaten-up American Capital (ACAS) announces the repurchase of 9.1M shares in Q2 - 3% of the float and roughly the same pace as the past few quarters - at an average purchase price of $13.77 each (today's close, $12.14). It brings the 2-year total of share buybacks to over 20% of those outstanding, with an average buy price of $10.63. (PR)

Comments (6)
  • Jonathan Christopher
    , contributor
    Comments (345) | Send Message
    ACAS SHARE REPURCHASE: With a book value of $19.04 (unadjusted for recent market changes in shares held for investment) and a purchase price of $13.77, the return on investment is an effective 38%. There are probably few other investments that the Board can make that offer that type of return.
    26 Jun 2013, 05:04 PM Reply Like
  • Stevlg
    , contributor
    Comments (884) | Send Message
    all of that aside- (the "book value)- the charts look lousey so far/currently. Your advice would be ......?
    26 Jun 2013, 05:59 PM Reply Like
  • Jonathan Christopher
    , contributor
    Comments (345) | Send Message
    With respect to advice; It depends on your time horizon. I started buying this stock at $6 and told people they should keep it until it reached $20. However I have need for current income, and need to sell when profits are made. If you have at least 3 years to retirement, and do not need the income for that period, I would suggest you buy and hold. IF you have a short-term view, and can hold for 6 months, I would expect you would make about 20 %, but there will be a lots of ups and downs. We are currently at the bottom of the approximately 75 year Treasury Yield curve. We can stay near the bottom for several years, but the trend is irrevocably up. Increasing yields will trash the long term bond market, and force money out of long-term fixed, though I expect that yields for 5 yr to 10 yr will not rise as fast, because of need for guaranteed income by retirees. Why this discusstion: BDC are more flexible with respect to income. They can mix bond and stock yields for reliable income. they will be a prefurred class of investment during a bond market with increasing yields and decreasing bond prices.
    26 Jun 2013, 06:16 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2860) | Send Message
    I agree. This could easily be at $20 and paying $1/share div in the next 2 years. I added more this week.
    26 Jun 2013, 06:41 PM Reply Like
  • Careful Investor
    , contributor
    Comments (136) | Send Message
    BDC's are making "15%" loans in this interest rate environment. Think about that for a moment. I would much rather own ACAS which is purchasing it's own stock at a deep discount to NAV than some of the other BDC's which pay a taxably inefficient dividend and are stretching to make new, sizeable loans. Recall that most management teams get paid on the amount of their Leveraged Assets. ACAS could readily be $15.00 whereas many others could lost 20% nearterm....
    26 Jun 2013, 06:55 PM Reply Like
  • metal27
    , contributor
    Comments (688) | Send Message
    ACAS stock is barely $12, yet they report average purchase price of $13.14 for the quarter. Buy now, before they start third quarter purchases! This is the only buy-back program that makes sense and we know they'll continue until the stock's market price approaches book value, and then they'll resume the dividend. Pretty much a no-brainer, regardless of interest rates. Only a black swan could derail this train (how's that for a mixed metaphor?)
    27 Jun 2013, 01:33 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs