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Robin Heiderscheit

Robin Heiderscheit
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  • A Good Day To Buy ARCC [View instapost]
    I was a little ahead of my time in turning attention to growing off balance sheet liabilities at BDCs. Now BDC Buzz and BDCReporter and others are talking about it.

    Generally BDCs are much more leveraged today than they were going into the last recession. ARCC certainly is.
    May 15, 2015. 02:39 PM | Likes Like |Link to Comment
  • MCC's NII Keeps Falling [View instapost]
    They should have cut the dividend to 25 cents instead of 30 cents. They haven't learned to play the game. Gotta have good NII coverage and dividend increases to attract the masses!
    May 15, 2015. 02:35 PM | Likes Like |Link to Comment
  • Rising Interest Rates: Bear On Banks [View article]
    Vast, thank you for writing this. If I hear one more sloppy, sugary thinking sell side analyst suggest buying regional and community banks because "bank profits go up during rising rate periods" I will puke. As you correctly point out, the spreads off which banks feast may or may not benefit from rising rates, but there are real reasons to believe as the cost of raw material rises, profits will fall.
    May 15, 2015. 01:58 PM | Likes Like |Link to Comment
  • Getting Defensive With The PowerShares S&P 500 BuyWrite Portfolio ETF [View article]
    Long run total return of 3% since it went live in 2007. I dunno, doesn't seem like much to write home about to me. And you had to live through a 40% drawdown to get the 3%!
    May 15, 2015. 01:52 PM | 2 Likes Like |Link to Comment
  • Stay Away From Capitala Finance Corp. [View article]
    I got into an argument with another BDC article writer about this one -- it should be called "Crapitala" Finance (how's that for sophomoric?). Their current operating expense structure is ridiculous and unlike my teenage child I mean that in a bad way.

    I offer a friendly amendment to the Factoids rule for BDC investment --

    BDC assets +$500ml, good dividend coverage . . . good
    BDC assets -$350ml, not good dividend coverage . . . bad

    Thanks for all your data driven work on this site.
    May 15, 2015. 01:38 PM | 4 Likes Like |Link to Comment
  • As Safe As It Gets, Is ACNB Corp's 3.9% Yield A Buy? [View article]
    Why don't insiders own the stock? Relatedly, any potential they get sold?
    Do you think they will stick to the "penny a year" approach to raising the dividend?
    Thanks for the quality write up.
    May 15, 2015. 09:19 AM | 1 Like Like |Link to Comment
  • Fairchild Semiconductor: Ignored And Unloved Cash Flow/Buyback Story With 50%+ Upside [View article]
    I see FCF deteriorated markedly year over year. Anyone know what was up with that?
    May 15, 2015. 09:05 AM | Likes Like |Link to Comment
  • Saratoga Investment Seems A Decent Investment Here [View article]
    I would have liked to see them announce they were closing the fund and distributing NAV to the shareholders. They would have shocked the world and their timing would have been great. On the next upcycle they could have made a fortune. (OTOH, this is a slow motion way of doing the same thing, although you can be sure management will take its dividend in stock.)

    The dividend makes their "dry powder" situation even worse, but at current pricing and terms I am sure management is fine with not growing the portfolio. There just aren't enough deals out there to go around.
    May 15, 2015. 09:02 AM | Likes Like |Link to Comment
  • BDCs And Prospect Capital Make Me Optimistic About High Yield Investing [View article]
    Darren I am curious why you own BDCL if getting "only half" the gross interest and fee income is a problem for you? In that respect, PSEC is very typical of the BDC industry. Outside of the externals, you can count on one hand the BDCs that allow more than half of gross revenue to drop to shareholders.
    May 14, 2015. 09:28 AM | Likes Like |Link to Comment
  • Doing Fantasy Accounting With The FULL Numbers Could Produce Reality [View instapost]
    Too modest as always Factoids.

    I believe your numbers are correct. They have about $45ml they can put to work now in receivables and allowing for a little credit line expansion. That might generate net of fees another $3.5ml in NII over the coming twelve months, or an extra 3-5 cents per quarter.

    Net net I think you take last quarter GAAP NII of $.165, divide it in half to get around $.08 and add back $.04 and you get a reasonable NII expectation going forward.

    That would be a yield of 14% which isn't too shabby but they won't do the fee rebate forever I assume and FULL is too far below critical mass to interest me above $3.20 or so.
    May 13, 2015. 01:05 PM | 1 Like Like |Link to Comment
  • I Maintain My Bullish View On Fly Leasing [View article]
    They are doing a really good job on expense control, which drops straight to the bottom line. If you look at most commercial REITS or BDCs these aircraft leasing companies are much more efficient at generating a dollar of net interest income.
    May 12, 2015. 01:55 PM | Likes Like |Link to Comment
  • Fifth Street Finance: What Comes Next? [View article]
    It is possible but not simple or cheap. A few activists are poking around in some of the smaller BDCs. Bulldog Capital, for example, is trying to force MVC Capital to make some changes. So far about 99% unsuccessful.

    That said, I think if these 20-25% discounts persist, activism will pick up. Other types of closed end funds have seen alot of activism over the years.

    My hunch is that the smart money is waiting for a recession, when credit losses combined with the discounts really opening up will make for much more attractive entry points. A 20% downturn in the equity markets could easily lead to a $5 entry point for FSC . . . that would be nice.

    As a believer in free markets I believe, eventually, BDCs will all adopt more shareholder friendly fee structures. Right now BDCs are, like the shark in Jaws, perfect killing machines. That won't last forever, just like the shark that blew up in the end.
    May 12, 2015. 09:38 AM | 4 Likes Like |Link to Comment
  • OHA Investment Corporation: A BDC Trading At 30% Discount To NAV With Significant Margin Of Safety [View article]
    Ho hum quarter but still don't see how they achieve "escape velocity" given how far they are below critical mass. Best hope is another period of "BDC insanity" where everybody trades to a 10% premium to NAV and therefore everybody can do offerings.

    Sold my small sub $5 position at $5.45.
    May 12, 2015. 09:20 AM | Likes Like |Link to Comment
  • The Dirt Cheap Value Portfolio - Recent Implosion Prompts A Grand Slice Of Humble Pie [View article]
    Isn't that portfolio supposed to be highly volatile. I mean the 9% drawdown takes you back in time to what, about January?
    May 10, 2015. 01:59 PM | Likes Like |Link to Comment
  • MFC Industrial: Large Discount To Book Value Not As Enticing As It Appears [View article]
    thanks to all above
    May 8, 2015. 01:01 PM | Likes Like |Link to Comment
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