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Fifth Street Finance (FSC)

  • Tue, Jan. 6, 2:11 PM
    • These income producers might typically enjoy the big run lower in interest rates (the 10-year yield is all the way down to 1.94%), but it's coming alongside a continued plunge in oil (now all the way down to $47.61).
    • Individual names: Fifth Street Finance (FSC -2.1%), Ares Capital (ARCC -1%), FS Investment (FSIC -1.6%), Main Street Capital (MAIN -2.6%), PennantPark Investment (PNNT -3.2%), TCP Capital (TCPC -2.9%), KCAP Financial (KCAP -1.6%).
    • Notably higher for a 2nd straight day is OHA Investment (OHAI +1.9%) after SA Pro's Cahaba Research on Monday morning made the case for buying this busted BDC at a greater than 40% discount to book value.
  • Dec. 17, 2014, 3:41 PM
    • Popular high-yield ETFs HYG and JNK are each ahead by 2% in today's session as the energy sector - which makes up a sizable portion of the high-yield universe posts a strong rally, with the XLE higher by 4.1%.
    • BDCs can sort of be considered the equity equivalents of junk bonds, and they're putting in a big rally today as well.
    • Prospect Capital (PSEC +1.5%), Main Street (MAIN +4.1%), Blackrock Kelso (BKCC +2.4%), Triangle Capital (TCAP +6.4%), KCAP Financial (KCAP +2.6%), THL Credit (TCRD +3.5%), Medley Capital (MCC +2.2%), Fifth Street Finance (FSC +1.5%)
  • Dec. 9, 2014, 12:57 PM
    • Unable to catch a bid for a few sessions, mortgage REITs (REM +1%) have turned higher in afternoon action, led by Annaly (NLY +0.7%) and American Capital Agency (AGNC +1.5%).
    • Helping are jitters in the stock market (though U.S. averages are well off the lows), and a 10-year Treasury yield that's retreated all the way to 2.21% after hitting the mid-2.30s on the back of Friday's strong jobs number.
    • Armour (ARR +1.1%), Two Harbors (TWO +0.9%), CYS Investments (CYS +1.4%), Invesco (IVR +1.8%), American Capital Mortgage (MTGE +1%), Hatteras Financial (HTS +2%), Capstead (CMO +2%).
    • Other ETFs: MORT, MORL
    • Also showing some green are the recently beaten-up BDCs, including Prospect Capital (PSEC +0.2%), Fifth Street Finance (FSC +0.2%), Ares Capital (ARCC +0.5%), FS Investment (FSIC), Triangle Capital (TCAP +1.7%).
    • Previously: Money flows back into fixed income (Dec. 9, 2014)
  • Dec. 8, 2014, 11:30 AM
    • A bellwether of sorts in the BDC sector, Prospect Capital (PSEC -6.2%) earlier announced a big dividend cut, and the suspension of its stock issuance program so long as the share price is so far south of book value.
    • Prospect has some of its own issues to deal with, but common across the sector is too much money chasing too few deals, and the resultant lower yields for lower quality lending.
    • Fifth Street Capital (FSC -2.9%), Triangle Capital (TCAP -6.1%), TICC Capital (TICC -2.2%), KCAP Financial (KCAP -1.7%), Medley Capital (MCC -2.3%) Gladstone (GLAD -3.6%), OHA Investment (OHAI -5%), Blackrock Kelso (BKCC -1.1%), Main Street Capital (MAIN -0.2%), PennantPark (PNNT -1.3%).
    • Previously: Prospect Capital suspends ATM stock issuance program as dividend is cut (Dec. 8, 2014)
  • Dec. 1, 2014, 11:17 AM
    • Fifth Street Finance (FSC -4.1%) reported mediocre FQ4 results earlier this morning, but nothing particularly out of line with the rest of the sector for the quarter ended September 30.
    • Nevertheless, the entire industry (BDCS -2.2%) is lit up red in mid-morning action: Prospect Capital (PSEC -3.7%), Ares Capital (ARCC -2.2%) FS Investment (FSIC -2.4%), Main Street (MAIN -2.1%), Triangle (TCAP -3.5%), OHA Investment (OHAI -3.8%), FIdus Investment (FDUS -4.2%), PennantPark Investmnet (PNNT -3.2%).
  • Dec. 1, 2014, 7:34 AM
    • FQ4 net investment income of $37.5M or $0.25 per share vs. $34.7M and $0.25 the previous quarter. Dividend is right about $0.25.
    • Net asset value per share of $9.64 vs. $9.71 previously, and Friday's close of $8.87.
    • $274.9M of investments funded during quarter. Weighted average yield on debt investments up 30 basis points to 11.1%.
    • FSC +1.5% premarket
    • Conference call at 11 ET
    • Previously: Fifth Street Finance misses by $0.01, misses on revenue
    | 1 Comment
  • Oct. 15, 2014, 11:05 AM
    • The spread of the junk bond index over Treasurys was below 300 basis points around the start of the summer, and around 400 bps near Labor Day. With today's sharp drop in Treasury yields (without a comparable move down in junk), the spread has blown out to more than 500 basis points.
    • HYG -0.25%, JNK -0.3%
    • Rough publicly traded equity proxies for high-yield, if you will, BDCs remain stuck in a bear market. Prospect Capital (PSEC -3.6%), Fifth Street Finance (FSC -2%), Main Street Capital (MAIN -3.8%), Blackrock Kelso (BKCC -2.6%), TICC Capital (TICC -5.1%), KCAP Financial (KCAP -4.7%).
  • Oct. 10, 2014, 4:24 PM
    • "The sector's drawdown is 50% of what occurred in the 2011 euro-crisis without anything like the accompanying conditions," writes a bullish BDC Reporter, noting the sector is lower by about 14% since its February high, and stalwart Ares Capital (ARCC -3.1%) is trading at a discount to book value for the first time in years.
    • Another example is TCP Capital (TCPC -2.5%), down about 15% from a high hit three months ago. The company has paid out a steadily-increasing dividend since going public, current and future earnings are in excess of the payout, the balance sheet was recently strengthened with medium-term debt capital, the average cost of debt is 2.63%. and its investments yield 9.2%. What's not to like?
    • If the current benign business and credit cycle is indeed over, then BDCs have further to fall. If, as BDC Reporter believes, low rates are here to stay for awhile (and even if rates rise the BDC sector should prosper), BDCs are reaching bargain levels.
    • Today's action: Prospect Capital (PSEC -2.9%), Fifth Street Finance (FSC -3.5%), FS Investment (FSIC -3%), Apollo Investment (AINV -2.1%), Triangle Capital (TCAP -1.6%), THL Credit (TCRD -2%), OHA Investment (OHAI -4.2%).
  • Sep. 22, 2014, 2:55 PM
    • As income favorites, business development companies often catch a bid during broader market selloffs (and bond market rallies), but the small caps (IWM -1.3%) are bearing the brunt of today's selling and the BDCs tend to fall into the that sector (though excluded from Russell indices).
    • Fifth Street Finance (FSC -1.1%) has a market cap of $1.3B; Main Street Capital (MAIN -2.6%) - market cap of $1.4B; Apollo Investment (AINV -2%) - $2B; Triangle Capital (TCAP -1.3%) - $730M; Ares Capital (ARCC -0.4%) - $5.1B. Hanging in there better than the rest is Prospect Capital (PSEC -0.1%), with a $3.45B market cap.
  • Sep. 11, 2014, 7:32 AM
    • Wunderlich starts FIfth Street Finance (NASDAQ:FSC) with a Buy rating and $10.50 price target.
    • Shares +0.4% premarket
    | Comment!
  • Jul. 10, 2014, 4:28 PM
    • It was a couple of days ago when Fifth Street Finance (FSC) rewarded its patient shareholders with a 10% dividend boost, but this afternoon the company is offering 13.25M shares, with underwriters having the option to buy nearly another 2M shares.
    • Source: Press Release
    • The stock's lower by 2.5% AH.
  • Jul. 8, 2014, 10:14 AM
    • Alone in the green in the BDC complex in early acton is Fifth Street Finance (FSC +1.5%) after boosting its dividend by 10% last night.
    • The company's stock went into the penalty box late last year after a "frustrating" FQ4 and a cut in the monthly payout. With initiatives put in place to improve performance apparently working, management more than three months ago hinted at an increase in the dividend.
    • For reference, the stock was trading at about $10.19 per share ahead of last November's tough report and was still in the low $9s this spring. The current price is $10.12.
    | Comment!
  • Dec. 2, 2013, 10:22 AM
    • "The market seems to have recalibrated expectations lower," on Fifth Street Finance (FSC -2.2%) following its "disappointing" FQ4 and dividend cut last week, says JPMorgan, restating its Buy rating but cutting the price target by one dollar to $10. The team notes the dividend yield remains a "secure" 10% and the stock trades below NAV.
    • UBS last week cuts its price target by one dollar to $10.50, but also rates the stock a Buy.
    • Last week's earnings coverage
    | Comment!
  • Nov. 27, 2013, 2:15 PM
    • "It's been extremely frustrating," says Fifth Street Finance (FSC -1.4%) CEO Len Tannenbaum on the earnings call (transcript), as the company has struggled executing on its five-point plan and yesterday cut the dividend to be more in line with reduced earnings.
    • He blames this FQ4's particularly weak result on prepayments being front-loaded coupled with a "lousy" origination number of $120M as several deal closing slipped into FQ1. "The board looked at $0.24 (NII) versus our dividend level, and said, all right, we just have not earned our dividend for several quarters and we have to put it at least temporarily in line with the current earnings level."
    • Responding to a question about whether the board will consider cutting the fee structure in light of the company's move into first lien, safer, lower-yielding assets, President Bernard Berman dances around a bit, but does promise an improvement in general and administrative expenses next year.
    • One thing investors don't have to worry about in the short-term is a stock offering as Fifth Street - given the tough deal environment - is sitting on plenty of excess capital (there was a secondary in September).
    • Company specific? Thus far, the rest of the BDC sector is shrugging off FSC's weak results.
    | 1 Comment
  • Nov. 26, 2013, 8:08 AM
    • Fifth Street Finance (FSCtumbles 6.5% in the premarket after slipping a dividend cut into last night's earnings release. The monthly payout falls to $0.05 per share in December from $0.0958 previously. For the first five months of 2014, the dividend will be $0.0833 per share.
    • The board cancelled the $50M repurchase plan and replaced it with $100M program.
    • Net asset value per share falls to $9.85 on September 30 from $9.90 at the end of Q2. NII of $0.24 per share fell from $0.27 in Q2.
    • CC at 10 ET
    • Press release
    | Comment!
  • Nov. 25, 2013, 6:46 PM
    • Fifth Street Finance (FSC): FQ4 NII of $0.23 misses by $0.03.
    • Shares -2.2% AH. (PR)
    | Comment!
FSC vs. ETF Alternatives
Company Description
Fifth Street Finance Corporation is a a speciality finance company. It invests in small and mid-sized companies in connection with investments by private equity sponsors.
Sector: Financial
Industry: Credit Services
Country: United States