Solar Capital: BDCs - The Good, The Bad And The Maybe? Part 5
Tue, Aug. 5, 7:26 AM
- Net investment income of $16.1M of $0.38 per share vs. $19.3M and $0.43 a year ago. Dividend is $0.40.
- Net asset value per share of $22.44 vs. $22.50 at start of year. Last night's closing stock price was $20.12. $19.5M of stock repurchased during quarter at average price of $21.93 each. Of the $100M program authorized, the company bought back $56.6M. The program expired on July 31.
- Investments made during quarter totaled $89.4M, and those prepaid or sold totaled $137.8M.
- Conference call at 10 ET
- Previously: Solar Capital EPS in-line, misses on revenue
- SLRC flat premarket
Mon, Aug. 4, 5:03 PM
Mon, Aug. 4, 11:31 AM
- With BDC earnings set to begin rolling in this week, a new report from JPMorgan expects them to show increasing originations in H1 and says the companies are well-positioned for a rising rate environment. Those rated Overweight by the JPMorgan team include:
- Apollo Investment (AINV +0.5%) - reporting Thursday - has its price target boosted to $9 from $8.50.
- Ares Capital (ARCC +0.1%) - reporting Tuesday - has had a portfolio yield which has declined thanks to a focus on higher-quality investments, but it's a move which should bode well for shareholders in the longer term.
- Solar Capital (SLRC +1.4%) - reporting Tuesday - is more conservatively run with a distribution (7.3%) at the lower end, and thus maybe more suitable for conservative investors.
Thu, May. 29, 10:51 AM
- High risk or high opportunity? That the market now views Prospect Capital (PSEC +0.6%) as high-risk can be inferred from the dividend yield, says KBW's Greg Kelly - a whopping 13.3% compared to, for instance, the more-conservatively run Golub Capital (GBDC +0.6%) which yields just 7.5%.
- While most BDCs are lenders, Prospect buys companies outright - the only of the 30 BDCs covered by Kelly which does this (though SLRC has done so with one).
- As has been noted before by other analysts and Prospect management itself, if the SEC prevails in the accounting dispute, it will actually boost money going to shareholders while cutting management compensation. Another positive: Equity raises are off the table until the issue is resolved.
- Prospect management paints the selling in the stock as "sell first, ask questions later," but The Street's Dan Freed muses that maybe owners are thinking twice about investing in a management which plays accounting games to line its pockets at the expense of earnings.
- In other news, Evercore upgrades Prospect from Underweight to Equal Weight.
Mon, May. 5, 6:37 PM
Wed, Feb. 26, 1:16 PM
- WIth business development companies getting the boot from S&P indices, will the Russell follow suit? It's a significant issue as investors are far more heavily invested in BDCs though the Russell indices than through S&P, writes Brendan Conway. He notes ownership of BDCs by Russell-tracking index funds are as high as 38 days worth of trading volume, and Wells Fargo estimates there are 24 BDCs where 10 or more days of average volume would be required to unload them.
- Wells, however, does not see Russell following S&P's lead, with item #1 being Russell's desire to "represent small cap reality." "Russell Indices receive acclaim because they are willing to provide investors access to the true investable small cap universe. To the extent BDCs are excluded, this would deprive investors the opportunity to invest in what has become a very large/growing industry."
- The following list is those BDCs with 10 or more days of average volume in index funds tracking Russell indices.
- NGPC 38.23 days of volume, CSWC 29 days, SCM 23.5, FDUS 20.7, GARS 20, MVC 19.7, SUNS 18, WHF 17.8, SLRC 17.2, CPTA 16, MCGC 15.1, BKCC 14.9, TCRD 14, HRZN 14, TCAP 13.9, PNNT 13.3, HTGC 12.6, TICC 12.6, GLAD, 12.4, GBDC 12.3, KCAP 12.2, TAXI 11.8, MAIN 11.4, NMFC 9.98.
- Related ETFs: BDCL, BDCS, BIZD
- Other major names - no doubt included in the indices, but whose holdings are less than 10 days of average trading volume: PSEC, FSC, ARCC, AINV, MCC, HTGC, TCPC, FULL, GBDC
Tue, Feb. 25, 5:22 PM
Tue, Feb. 25, 4:49 PM
Tue, Feb. 25, 12:20 PM
- "After consulting with clients concerned with certain reporting requirements, expenses, and investment restrictions relating to business development companies (BDCs), S&P Dow Jones has decided to remove all identified BDCs from its U.S. Indices.
- Press release
- BDC ETFs: BDCL, BDCS, BIZD
- Earlier: Prospect Capital (PSEC -2.7%) is removed from the S&P 600 SmallCap Index and Apollo Investment (AINV -7.3%) is removed from the S&P 400 MidCap Index.
- Prospect's market cap is $3.4B, Apollo's $1.9B. Other BDCs with market caps over $1B: Fifth Street (FSC -0.8%), Ares Capital (ARCC -1.5%), American Capital (ACAS -1.7%), Main Street (MAIN -1.7%), Hercules Technology (HTGC -2%). Close enough to $1B for an argument: Solar Capital (SLRC -1.8%) and Golub Capital (GBDC -0.2%).
Dec. 6, 2013, 9:08 AM
Nov. 1, 2013, 7:16 AM
- BB&T removes its Buy rating on Solar Capital (SLRC) as does Wells Fargo, citing valuation and limited earnings growth going forward.
- From Wednesday: Q3 results.
- It's tough finding new investments: After averaging about $100M per quarter of gross new investments since its IPO, SLRC did $65M IN Q3. Asked by an analyst on the earnings call (transcript) if it's better to model for $100M or $65M going forward, CEO Michael Gross says use the lower number if the current environment continues.
Oct. 30, 2013, 4:55 PM
Jul. 24, 2013, 9:16 AM
Jul. 24, 2013, 7:58 AMSolar Capital (SLRC) cashes in two legacy investments, agreeing to sell for $150M its second lien and preferred investments in DS Waters of America. Additionally, the firm's investment in Midcap Financial Intermediated Holdings is being redeemed at a premium to par for gross proceeds of $87M. The $237M will likely be used to pay off debt. Net income in Q2 is expected at $0.41-$0.43 and NAV/share is expected to be $22.35-$22.40. Accordingly, the quarterly dividend is being cut to $0.40. (PR) | 3 Comments
Jul. 24, 2013, 7:58 AM
Jun. 21, 2013, 12:13 PMTo find alpha in the BDC sector (BDCS), look for those companies with higher-than-average dividend growth, says BB&T's Vernon Plack. He still likes previous favorite Ares Capital (ARCC -0.8%), but his top 3 picks now are Fidus (FDUS -0.6%), Hercules Technology (HTGC +0.3%), and Solar Capital (SLRC -0.4%). Fidus - which invests at the low end of the middle-market space - has the potential for a 50% higher dividend, a 12.5% yield based on today's price. | 1 Comment
SLRC vs. ETF Alternatives
Solar Capital Ltd. is a closed-end, non-diversified management investment company. The Company invest in leveraged middle market companies in the form of senior secured loans, mezzanine loans and equity securities.
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