Prospect continues Friday's slide


Prospect Capital (PSEC) is lower by another 1.5% premarket after Friday's 2.1% decline behind the Chapter 7 bankruptcy filing by portfolio company New Century Transportation.

The carrying value of the loan of $35.9M (was originally $44M) pales in comparison to Prospect's $6B loan portfolio, but -  as SA's Lawrence Zack Galler points out - the speed at which the investment progressed from performing to bankruptcy (less than 2 quarters) should unnerve investors relying on Level 3 portfolio marks when economic times get tough.

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Comments (29)
  • zack54
    , contributor
    Comments (155) | Send Message
     
    Great timing if your dripping PSEC 6-19-14 pay date and were just getting more shares for the Dividend........love it.
    16 Jun 2014, 08:09 AM Reply Like
  • Interesting Times
    , contributor
    Comments (15175) | Send Message
     
    Looks like the stock had a quick turnaround. Some are missing buying at a great price !!
    16 Jun 2014, 12:06 PM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    The "slide" is over with and the " 2% discount" opportunity has now ended. The price is back to where it was before the bankruptcy news. Congrats to those who took advantage of the deal.
    18 Jun 2014, 04:43 PM Reply Like
  • jwill53
    , contributor
    Comments (477) | Send Message
     
    agree
    16 Jun 2014, 08:36 AM Reply Like
  • drmwsunner
    , contributor
    Comments (127) | Send Message
     
    Congrats on ignoring reality....we're dealing with incompetence and greed with our managers at PSEC. This punishment may result in a huge unwinding that will wipe the grins off of your faces.
    16 Jun 2014, 08:59 AM Reply Like
  • Hans Thoma
    , contributor
    Comments (395) | Send Message
     
    Congrats on trolling, short.
    16 Jun 2014, 09:59 AM Reply Like
  • bullsbearspigs
    , contributor
    Comments (903) | Send Message
     
    grinnin hard today...better hurry and cover, dont forget to pay our dividends,
    and thanks !

     

    Bulls
    TRADE WHAT YOU SEE, NOT WHAT YOU WANT TO SEE
    16 Jun 2014, 10:25 AM Reply Like
  • zack54
    , contributor
    Comments (155) | Send Message
     
    I can only say after watching management buy a lot of shares for over 10.25 and up that your thesis is in big jeopardy. But that's what makes a market...but paying the .1105 in monthly div's has got to be painful.
    17 Jun 2014, 08:01 AM Reply Like
  • drmwsunner
    , contributor
    Comments (127) | Send Message
     
    Long 10,000 shares. Sound like a short to you?
    18 Jun 2014, 08:42 AM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    Sorry, but we're not falling for your assessment. Prospect and its management team will ensure that the shareholders are compensated fairly.
    18 Jun 2014, 10:34 AM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    Yeah, riiiiiiight...
    18 Jun 2014, 10:35 AM Reply Like
  • roncor
    , contributor
    Comments (12) | Send Message
     
    So this situation "should unnerve investors". Why doesn't that bother me? Because unnerved investors have only a fleeting effect on current price, and no lasting effect on the value of the investment.
    16 Jun 2014, 09:11 AM Reply Like
  • AnAvgJoe
    , contributor
    Comments (555) | Send Message
     
    As someone pointed out on another thread (and I'm paraphrasing here), PSEC's 133 picks out of 134 is still pretty darn good. Hard to nail them all.
    16 Jun 2014, 09:46 AM Reply Like
  • koolsool
    , contributor
    Comments (501) | Send Message
     
    The shorts had to cover on the SEC & NICK news. They were going to loose a lot of money on theirs bets. This overblown manipulation gives them a chance to get out.
    16 Jun 2014, 10:12 AM Reply Like
  • U Mass baseball
    , contributor
    Comments (29) | Send Message
     
    I would hope PSEC's management has been sitting at the conference table a very long time in order to figure out why they made this loan. Lessons are made from mistakes. I am very long PSEC, and feel they'll come out of the current messes in good shape. It may take a year before it gets back to NAV, but .1105/ mo. dividend is no small change, while we wait for the stock price to improve.
    16 Jun 2014, 11:11 AM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    We don't need it back to NAV. We just need the price to iterate around its present price. That makes the drip all the more beneficial. A stable share price and a continuing .1104 will keep us long-term investors quite content...
    18 Jun 2014, 10:38 AM Reply Like
  • dundey
    , contributor
    Comments (1043) | Send Message
     
    Hope everyone added at the bell!
    16 Jun 2014, 11:23 AM Reply Like
  • Davephd
    , contributor
    Comments (1184) | Send Message
     
    I am long PSEC but I wonder if their external type management will eventually lead to the path that CWH went down with the Portnoys. http://seekingalpha.co...
    16 Jun 2014, 11:58 AM Reply Like
  • ka12345
    , contributor
    Comments (22) | Send Message
     
    I have to wonder what there circumstances surrounding the underwriting of this loan. The same methodology must be used company wide. One has to wonder if there are other loans that slipped under their radar.

     

    Although it is "only 1 out of 135 loans" , it was a very small loan who's loss is easily absorbed. Let us not ignore the damage that could be inflicted should one of the handful of loans go bad that make of the majority of the portfolio in dollar terms.
    16 Jun 2014, 12:59 PM Reply Like
  • Interesting Times
    , contributor
    Comments (15175) | Send Message
     
    KA

     

    If you have that fear then don't invest in the BDC'S...

     

    You have to accept the risk for a 12% return. But you have to be able to sleep at night as well..

     

    Tough choice !!!
    16 Jun 2014, 01:02 PM Reply Like
  • DHL-2
    , contributor
    Comments (529) | Send Message
     
    Well, perhaps they gave the loan knowing it was high risk (with a very high interest rate), but since it was smaller portion of the portfolio, they did it anyway. Hopefully they use a more conservative criteria for the larger loans in the portfolio.

     

    I don't think, however, management considered the potential impact on their stock price.
    16 Jun 2014, 05:04 PM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    If this is of major concern to anyone, then those people should not be investing in BDCs. No one bats 1.000 in this business arena. If that's a criterion for an investor, then no BDCs for them. It all comes down to one's risk tolerance and risk/reward assessment with one's own needs in mind.
    18 Jun 2014, 10:43 AM Reply Like
  • a.e. smith
    , contributor
    Comments (17) | Send Message
     
    anybody else notice the insider trading that went on. My e-mail has been popping with the news
    16 Jun 2014, 06:52 PM Reply Like
  • Dividends#1
    , contributor
    Comments (4332) | Send Message
     
    You mean these!!! It's a BEAUTIFUL thing!!!

     

    http://bit.ly/T2kecY

     

    http://bit.ly/UGDDSl

     

    http://bit.ly/UGDC0I
    16 Jun 2014, 07:26 PM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    Yeah, and isn't all so interesting that they all took place on the same day? Looks like they got together for morning coffee and arrived at a conclusion that it's an optimum time to strike. It's "uplifting" to see this in addition to them paying a higher price than many did in recent days --- like 2 - 4 % more...
    18 Jun 2014, 10:50 AM Reply Like
  • dundey
    , contributor
    Comments (1043) | Send Message
     
    Yes it was reported on Friday - but great to see
    16 Jun 2014, 11:18 PM Reply Like
  • ka12345
    , contributor
    Comments (22) | Send Message
     
    Interesting

     

    To elicit such a response from you regarding out loud thinking smacks of fear. Festering rancid fear my fine friend. It is you who lie in bed at night staring up at the ceiling, ruminating about your risky investments and if you truly have the stomach. If you were truly comfortable with your investment you would not be on this board looking for comfort from other postings at the same time being unable to let a post scroll by that might shatter your head in the sand world.

     

    Yes I have fear. It keeps me alive. It keeps me from sky diving, running with the bulls, blindly loosing money in investments, scaling Mt Everest, gambling in the stock market, and doing all kinds of other scary stupid stuff for no material reason or gain.

     

    If you don't want to analyze your investments from every angle you are either a cheerleader or fearful of discovering something about yourself.

     

    As for me, I am a thinker. I want to think about every angle. I have to know where I've been, where I am, and where I'm going in every aspect of my life.

     

    Since we are on the subject. I don't normally post on forums but I always try to make people think and think some more. Just because its paying 13% doesn't mean someone should be an inert shareholder.

     

    Enough with the cheerleading.
    ..
    17 Jun 2014, 01:37 AM Reply Like
  • dundey
    , contributor
    Comments (1043) | Send Message
     
    And that KA is what makes the world (and stock markets) go round!

     

    BTW, you should try sky diving, its a great rush. Life is for living my friend!
    17 Jun 2014, 05:05 PM Reply Like
  • a.e. smith
    , contributor
    Comments (17) | Send Message
     
    let me know when the rest of you guys catch up with the most current news. It looks like upper mgmt. at PSEC bought a couple hundred thousand shares of their own stock. Sounds very encouraging to me!
    17 Jun 2014, 08:28 AM Reply Like
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