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Retired Bureaucrat

Retired Bureaucrat
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  • Traders pound Exelixis [View news story]
    Thanks.
    Apr 1 11:07 PM | Likes Like |Link to Comment
  • Traders pound Exelixis [View news story]
    How long do we have to wait for the trial to be completed and and any results on efficacy announced?
    Mar 30 09:38 PM | Likes Like |Link to Comment
  • Traders pound Exelixis [View news story]
    I double my holdings today and will buy more, if it goes lower.
    Mar 26 10:37 PM | Likes Like |Link to Comment
  • Prospect's Growth Hides Bad Underwriting [View article]
    The author has done a great service by writing an insightful article--shamelessly to say, mirroring some of my own concerns voiced on SA. They seem to be greedy and taking undue risks and making too many bad loans, because their interests/bonuses do not seem to be aligned with shareholder returns.

    Only when the (economic) tide goes out again will the investors discover that PSEC does not have a bathing suit.

    Other BDCs are not all poorly managed. I favor ARCC.
    Mar 4 10:43 PM | Likes Like |Link to Comment
  • The Dream Of The Insulin Pill: Oramed Vs. Rivals [View article]
    I enjoyed your comments. Thank You/ What other stocks do you follow?
    Retired Bureaucrat
    Feb 9 02:40 AM | Likes Like |Link to Comment
  • Prospect Capital Corp.'s Dividend Sustainability Analysis (Post Fiscal Q4 2013 Earnings) - Part 2 [View article]
    The union is right on and knows a lot more than you think, or those that do spurious analysis. the facts speak for themselves. Prospect Capital management are running the company to enrich themselves, not the shareholders as the union points out. No amount of pages of irrelevant analysis can convince me otherwise to not think poorly of a management that continually has dividend payouts of over 100% and sells stocks below market to fund those dividends and rewards itself on the size of the company rather than profits. Another smart way to evaluate a BDC is to look at its cost of capital. Try comparing PSEC's cost of borrowing compared to ARCC!.
    Jan 24 07:55 AM | Likes Like |Link to Comment
  • Prospect Capital Corp.'s Dividend Sustainability Analysis (Post Fiscal Q4 2013 Earnings) - Part 2 [View article]
    At least there are more people understanding that earnings per share is more important than dividends. PSEC management is not increasing shareholder value:

    UNITE HERE: Prospect Capital Monitor Finds That PSEC’s Rapid Share Issuance Hasn’t Translated into Significant Gains for Shareholders
    BY Business Wire
    — 8:00 AM ET 01/08/2014
    NEW YORK--(BUSINESS WIRE)-- UNITE HERE’s Prospect Capital Monitor has released its second report on Prospect Capital Corp. (PSEC
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    ) , a business development company (BDC). The report, titled Prospect Capital (PSEC
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    ) an Outlier in Share Issuance investigates Prospect Capital’s rapid issuance of equity over the last several years and its effect on shareholder value. Prospect Capital Monitor is a website and series of reports by UNITE HERE analysts, independent of Prospect Capital Corp. (PSEC
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    ), which aim to be a valuable resource for investors about PSEC and Business Development Corporations (BDCs).
    The report finds that Prospect Capital (PSEC
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    ) has increased its number of shares outstanding by 246% in the past three years ending September 30, 2013, three times more than the average of the ten largest BDCs. In the same three-year period, Prospect’s rapid equity issuance did not significantly increase net asset value (NAV) per share, which grew 4.7% compared to the 20.3% average NAV growth of the ten largest BDCs. In the year ending in September 30, 2013, Prospect issued 98 million new shares, increasing its shares outstanding by 57% while its NAV per share decreased by 1.5%. Prospect’s fees and expenses relative to investment yield spiked during 2012, cutting into profitability.
    PSEC’s most recent and largest secondary offering of 35 million shares on November 1, 2012, resulted in an 8.9% share price drop. Since its November 1, 2012 secondary offering, Prospect Capital (PSEC
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    ) has issued an additional 75 million shares through its ATM program and has scheduled the future issuance of the equivalent of 70 million shares at the latest conversion rate through convertible bonds. Equity issuance exerts a downward pressure on a company’s share price and earnings per share by increasing the supply of outstanding shares.
    The report can be viewed here:
    http://bit.ly/19dyXcg
    For more information and updates about PSEC and Business Development Companies, go to http://bit.ly/19dyVRH.
    Prospect Capital Monitor is a website and series of reports by UNITE HERE, the union for hospitality workers in North America. Our 250,000 members are beneficiaries of pension funds with over $60 billion in assets. UNITE HERE Local 7, based in Baltimore MD, is currently organizing workers whose common landlord, Airmall USA Inc., is 100% owned by Prospect Capital Corp. (PSEC
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    ) .
    Source: UNITE HERE
    Jan 8 08:59 AM | Likes Like |Link to Comment
  • OPKO Health Inc. And Rayaldy [View article]
    Thaks John. I have bet heavily on NPSP, and greatly reduced my OPK holdings, but may increase them when the opportunity arises.
    To change the subject, what do you think of Relypsa? should I double up in spite of the run up?
    Dec 10 11:36 AM | Likes Like |Link to Comment
  • OPKO Health Inc. And Rayaldy [View article]
    I am trying to understand which is a better risk: Rayaldy or Natpara by NPSP.
    Dec 6 07:58 AM | Likes Like |Link to Comment
  • Prospect Capital Corp.'s Dividend Sustainability Analysis (Post Fiscal Q4 2013 Earnings) - Part 2 [View article]
    Scott,
    You did some painstaking analysis. I am just commenting flippantly, noting that if a small firm pays 12.5% to borrow from PSEC, they have to be junk rated. In a rising economy, the total defaults on the portfolio of loans will be small, but I if the economy starts tanking, I am comforted that I will be able to exit faster that those waiting for the results of tests!
    Hoping to tip toe thru the taper,
    RB
    Oct 23 09:40 AM | 1 Like Like |Link to Comment
  • Prospect Capital Corp.'s Dividend Sustainability Analysis (Post Fiscal Q4 2013 Earnings) - Part 2 [View article]
    The analysis offered so far is exemplary but misses the point. BDCs are nothing but a junk bond fund lending to small and microcaps. They pay a dividend, which is unqualified like bond interest, and they tank when the economy goes sour and the loans they made come home to roost. However, in 2013, when the economy has been recovering for some time since the great recession, it is surprising that PSEC is writing off $ 104 million in 2013 as non operating expense.
    PSEC had a great big gain a few years back on a major Oil & Gas firm, but they have been diluting stock to both have capital for growth and to pay the high dividends. Perhaps a larger reserve against bad debts, if the IRS permits, would be one way to protect against periodic haircuts through equity dilution.
    Also, they are borrowing rate is high compared to Ares Capital and it borrows at intermediate term, hence its borrowing rate may go up when the Fed tapers--however, they are lending at Libor, which is short term index which is unlikely to go up for much longer. hence there is interest rate risk.
    Hopefully the economy will have recovered by the time the Fed has the courage to taper, but if the economy tanks, as may happen when the Tea Party Taliban decide to blow things up come Jan, or force severe and immediate budget cuts, then I will be the first to exit my position in this mini junk bond fund.
    I am too lazy to calculate meticulously, but lending at 12.5% less net losses on write downs (which can be significant) and corporate expenses, and paying 7% on debt and 11.7% on equity, giving a cost of capital at a 50% D/E ratio of somewhere around 9.4%, there is not much room to play with--- and the most critical metric, earnings per share, went down significantly in 2013.
    Rather than create shareholder value, the management seems to go for growth at any price and keep the retirees like me happy by giving us more in dividends that they earn.

    I will be happier, however, if large shareholders urge management to focus on shareholder wealth, rather than theirs.


    Oct 20 03:41 PM | 1 Like Like |Link to Comment
  • Magnum Hunter's Hidden Billion Dollar Assets [View article]
    I did not say that they were not smart in getting the Schramm Rig, However, following the Cheasapeake model of overleverage and getting large stock bonuses for the CEO and CFO, before profitability and positive cash flow, should also be questioned.
    Sep 16 08:34 AM | Likes Like |Link to Comment
  • Magnum Hunter's Hidden Billion Dollar Assets [View article]
    Nice piece of wishful thinking that sweeps a lot of things under the rug. How does selling good oil rich 14000 acreage in the Baaken for $32.5 million come to $6000/acre? What about the overvaluation of assets and having to write off close to $100 million in assets recently? Judging by the pricing of the EQT midstream asset with higher capacity, should not the Eureaka Hunter be less than $500 million total and not $500 million net to MHR? --and by the way, is there any debt carried by the Eureka Hunter subsidiary? I find it difficult to track all the subsidiaries and their holdings. For example, is not Green Hunter a sister company, controlled by yours truly, that went almost bankrupt in biofuels and it now supplies accounting and water processing to MHR? Also, does Mr. Evans own the jets he flies on for MHR, and the jets are rented to MHR? In my opinion, any firm that has to borrow at 12.5% and continue to have a liquidity crunch, is betting the ranch on high gas prices and on spectacular drilling results. Granted Mr. Evans is good at buying acreage at low prices, but will all the Tableland acreage pan out and increase in value? Or is it a case that the folks (other than Triad which was a bankruptcy) selling him the acreage do not understand its value? I will be happy to short the stock if it goes somewhat higher.
    Sep 15 10:41 PM | Likes Like |Link to Comment
  • C&J Energy Services' IPO: Plenty of Intrigue [View article]
    What happens to cap utilization if nat gas stays low and rig counts for dry gas start to decline, particularly because of the acquisition and the order for fleets 6, 7 and 8. The equipment seems to have a short life ---is it being written off fast enough? the growth seems likely to be short lived as the barriers to entry also seem quite low.
    Jan 22 08:48 PM | Likes Like |Link to Comment
  • Kinder Morgan Partners: One Company, Three Ways to Invest [View article]
    KMI pays 1.89% dividend. KMP pays 6.5% dividend, which grew in the last five years by 7% per year. How fast do you expect the KMI dividends to grow and when do you expect them to catch up to KMP yields? What tresholds have to be met to generate high incentive rights and income for KMI?
    KMP is already quite large and unlikely to grow at a high percentage rate each year. Besides, the Rocky Express pipeline moving nat gas from West to East may have to reposition itself as the Marcellus gas supplies mount in the North East. I wonder if KMP will find the eastern leg of Rockies Express as profitable.
    To the extent that KMI owes, through its subsidary, retail gas pipelines in the Chicago area, that asset will always be valuable as supplies from the Mid Continent, Baaken and the Marcellus produce an abundance of nat gas.
    As for zero basis for KMP assets--I would prefer to cross that bridge when KMP starts to have no new projects and we start approaching zero. Any idea when that will happen and what the basis is now?
    Jun 20 09:16 PM | 1 Like Like |Link to Comment
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16 Comments
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