American Capital suspends buybacks


A spinoff of the asset management unit coming? The move to suspend repurchases comes as the board studies whether American Capital's (ACAS) corporate structure is the "optimum means for operation and capitalization of the business."

In Q1, the company bought back 8.9M shares or 3.3% of the float at an average price of $15.38 each. Since Q3 of 2011, American Capital has bought back 101.6M shares or 29.4% of the float at an average price of $11.74, accretive to Dec. 31 NAV of $18.97 per share by $1.75.

Comments (6)
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    Good move for the stock today, but an improving US and EU economy would help more.
    31 Mar 2014, 09:42 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message
     
    Interesting move. Let's see what happens next.
    31 Mar 2014, 10:45 AM Reply Like
  • Brian621
    , contributor
    Comments (2) | Send Message
     
    Does it seem they are considering reinstating dividends?
    31 Mar 2014, 02:46 PM Reply Like
  • kmetviner
    , contributor
    Comments (143) | Send Message
     
    Looks to me they are establishing an asset management company, to run the different subsidiaries. Look at NRF, when they announced that decision, the stock ran from 9 to 16. Asset managers get a higher PE than portfolio companies. Seller of ACAS will wish they hadn't been so hasty.
    31 Mar 2014, 06:27 PM Reply Like
  • momoneymoproblems1
    , contributor
    Comments (25) | Send Message
     
    Its been a long time since ACAS has payed a dividend. With all of the stock repurchases, I feel like they should be able to afford it now.
    1 Apr 2014, 03:04 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    They are buying back stock because it is a more efficient return of capital to shareholders than a dividend. As long as the stock trades meaningfully below net asset value, i do not think investors should expect a dividend.
    1 Apr 2014, 04:06 PM Reply Like
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