Seeking Alpha

Broad rally in BDC names

Comments (26)
  • doc47
    , contributor
    Comments (992) | Send Message
     
    Does anyone know why this happened? Did some firm put out a buy on the entire group?
    26 Jun, 03:53 PM Reply Like
  • 13302632
    , contributor
    Comments (221) | Send Message
     
    There has been quite a big build up of shorts in the sector anticipating the Russel de-indexing. I would not be surprised if this has been overdone a bit, and now there is short covering given there is only one more day for the de-indexing to finish. It may pop some more next week when shorts realize they really don't want to be paying the dividends on many of these names.

     

    PSEC the one I own, ex-date is today and paid .11 and yet is up .04...very nice to get a 1% div and the stock to go up .4%
    26 Jun, 03:55 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10084) | Send Message
     
    No short covering, sector completely sold off for no good reason. Once others saw this we took advantage of it..

     

    The Russell had no bearing on these BDC'S....
    27 Jun, 07:28 PM Reply Like
  • Dale Mackey
    , contributor
    Comments (105) | Send Message
     
    guessing short covering...
    26 Jun, 03:56 PM Reply Like
  • Teriee
    , contributor
    Comments (35) | Send Message
     
    I have a "hunch" that it's short covering, though tomorrow should be interesting.
    Price up because people feel safe buying below NAV (rightly so) and the prices have been suppressed for the last 1-2 months...All IMHO
    26 Jun, 03:57 PM Reply Like
  • smurf
    , contributor
    Comments (3766) | Send Message
     
    The "short" thing is a very popular theme on SA.

     

    So what's the basis for your "hunch"? Have you checked out the short data on all the BDCs?
    27 Jun, 02:18 PM Reply Like
  • smurf
    , contributor
    Comments (3766) | Send Message
     
    The "shorts" are everyone's favorite bogeymen on SA.

     

    And on what data do you base your "hunch"?
    27 Jun, 02:30 PM Reply Like
  • Robert Molzahn
    , contributor
    Comments (84) | Send Message
     
    The well-talked-about drop in BDC's prices coming 6-27-14 just ain't gonna happen. The shorts saw an easy buck to be made but, as usual, nothin's easy. The cool cat bargain hunters waiting in the wings to chase those juicy dividends are causing a stalemate with the shorts. Nothing like a free market, eh!
    26 Jun, 04:20 PM Reply Like
  • Teriee
    , contributor
    Comments (35) | Send Message
     
    I think the unloading must have occurred the day PSEC had a flash crash..has been going up ever since.
    26 Jun, 04:28 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4050) | Send Message
     
    I bought more that day! Lovely crash!
    26 Jun, 07:03 PM Reply Like
  • Teriee
    , contributor
    Comments (35) | Send Message
     
    Me too!!!! :)
    26 Jun, 11:27 PM Reply Like
  • HSnev
    , contributor
    Comments (2) | Send Message
     
    I'm waiting and watching....
    26 Jun, 04:23 PM Reply Like
  • Brucejfern
    , contributor
    Comments (1239) | Send Message
     
    Actually, if you didn't nibble a few weeks ago you missed the best entry point.

     

    I am kicking myself for not buying into TCPC back in May below $16. I hit on other BDCs but that has been one of the bigger percentage movers of late.
    26 Jun, 04:56 PM Reply Like
  • WFTilson4
    , contributor
    Comments (6) | Send Message
     
    It's completely reasonable that short covering caused today's BDC gains, but i think we may have seen the last of this nonsense for a while. I read a paper that was published late yesterday by a quality investment service that specializes in dividend investments, and the discussion was about the FRB really raisng interest rates or not - obviously, there has been a lot of white noise about rising rates being bad for BDC investments. The tenor of the report was pretty much that of a non believer - "My advice ? Do not listen to what the Fed says about interest rates. I will believe they are raising rates when I see it. and even then, it is going to be a long slog back to attractive yields from near zero."

     

    I think these short sellers and psuedo bears have lost signt of the fact that it has been 12 years since the banking system offered an investment grade interest rate with NO RISK, and there is a whole lot of us in the Great Unwashed Middle Class that need the dividends for our retirement. Yes, there is risk that is not present in pass book savings and certificates of deposit, but desperate people take chances - and pay attention. i'm long PSEC, I incease my holdings with every sell off, and I ain't changing my mind soon. Good luck, everyone.
    26 Jun, 08:49 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4050) | Send Message
     
    Some BDCs might even do better if interest rates increase, e.g., FSC. They have a lot of variable rate loans on the books.
    26 Jun, 08:56 PM Reply Like
  • mmlee11
    , contributor
    Comments (29) | Send Message
     
    As does PSEC.
    27 Jun, 07:54 AM Reply Like
  • Tack
    , contributor
    Comments (12677) | Send Message
     
    T:

     

    Over 85% of all BDC lending is on a floating-rate basis.
    27 Jun, 08:54 PM Reply Like
  • DHL-2
    , contributor
    Comments (79) | Send Message
     
    BDCs have been in a downward price trend since March or April of this year. I know because I initiated a basket of new positions back then and I am just now breaking even. Authors such as BDC BUZZ claim that a number of BDCs will benefit from rising interest rates, which means they may provide an attractive alternative to mREITS if and when interest rates begin to rise.

     

    It is clear that FED policy of near zero short term interest rates have forced many folks who want to save into the higher risk stock market or bond market. I am one such person because I cannot stand to make under 1% in bank savings, money market, or CDs. I think this situation also distorts and alters what most financial planners preach about the risk of high dividend paying stocks (which is incorrect IMHO). Being in "cash" is no longer an acceptable long or intermediate term alternative, esp if you are retired and need more income than SS will provide.
    27 Jun, 08:56 PM Reply Like
  • awagel01
    , contributor
    Comments (3) | Send Message
     
    I have been loading up on PSEC, FSC, FSIC, MAIN, GLAD and TCPC during this recent price soon. This time of BDCs trading below NAV or close to it is a great buying time to lock in great dividend rates. All are strong companies with good dividends and coverage. My portfolio is heavy in BDCs and Preferreds, most paying monthly dividends. Buying BDCs around NAV and Preferreds below par.
    27 Jun, 12:15 AM Reply Like
  • smurf
    , contributor
    Comments (3766) | Send Message
     
    Short lived rally. Sector down today.
    27 Jun, 02:19 PM Reply Like
  • smurf
    , contributor
    Comments (3766) | Send Message
     
    Short lived rally. Sector is down today.
    27 Jun, 02:31 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4050) | Send Message
     
    FSC was up today and PSEC too.
    27 Jun, 07:32 PM Reply Like
  • Tack
    , contributor
    Comments (12677) | Send Message
     
    s:

     

    Hardly.

     

    http://yhoo.it/1llMj5R
    27 Jun, 08:55 PM Reply Like
  • doctorspec
    , contributor
    Comments (126) | Send Message
     
    Short interest in PSEC is about 9% equal to 30 million plus shares.
    28 Jun, 12:27 AM Reply Like
  • bbro
    , contributor
    Comments (9299) | Send Message
     
    Long BDC's since June 5th...
    28 Jun, 03:06 AM Reply Like
  • njbother
    , contributor
    Comments (184) | Send Message
     
    Long bkcc for several years. Bought more with the big dip recently. Took some nice short term gains off the table today as well as the dividend,

     

    Will keep a core position in the stock.
    28 Jun, 07:22 AM Reply Like
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