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8766921( Rajendra Agrawal)

8766921( Rajendra Agrawal)
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  • Prospect Capital And BDC Expenses [View article]

    Quite like your lucid description of the Taxable and Net Investment Income and the subtle but important differences between the two.

    My question: If an entity such as PSEC has a large enough capital base, it should have enough repayments and prepayments in any given quarter to enable it to originate new loans and the origination fees that go with it, without having to rely on new capital. I would therefore think that in the long run, it should be able to even out the quarterly variations in origination fees thus making the taxable income a relevant metrics for assessing whether it can meet its dividend obligations.


    Long PSEC and opportunistically adding to my position.
    Nov 20, 2014. 09:27 AM | Likes Like |Link to Comment
  • Prospect Capital's Challenges And Opportunities [View article]
    An excellent article clearly summarizing the pros and cons of BDCs in general and PSEC in particular.

    I am long PSEC. I had done my research and bought it based on the company's record of consistently delivering the high level of dividends over the last decade which included a severe recession. In doing so, I accepted the higher risks that go with the higher yields and the fact that its share price would show a greater level of volatility than the general market.

    While I am concerned about the drop in the recent share price, I still believe that the fundamentals that led me to make this investment in the first place have not changed significantly. The going forward plan enunciated by management at the last share holders meeting appear to be steps in the right direction. In my opinion, it should help the company better meet its obligations to its investors and continue to deliver attractive level of returns.

    I am therefore staying long in PSEC and am opportunistically adding to my position.

    Once again, thank you for sharing your thoughts with us.
    Nov 18, 2014. 09:12 AM | 4 Likes Like |Link to Comment
  • Prospect Capital: What Comes Next? Part 6 [View article]
    Touche, my sentiments exactly chuckleh. I am holding on to my position in PSEC and am not spending a lot of time worrying about its price fluctuation.

    I have a relatively small portion of my portfolio invested in this stock and have accepted that the dividend will most likely be cut to match their income. However, even with the cut, it will still produce a yield of 9 -10% making it a worthwhile investment.

    Buzz, appreciate your article and providing the facts to help us make decisions based on our own specific goals.

    Please keep them coming.
    Oct 20, 2014. 11:29 AM | 5 Likes Like |Link to Comment
  • Brazilian Elections And Brazilian Stock Market [View article]
    Peter, Thanks for this update. I am long CIG and have been wondering about the drivers behind the recent and continuing drop in its share price. I am in it for its dividend and have in fact added to my position taking advantage of the lower price. I have looked at its historical performance and am quite comfortable holding on to my position and not worry about the short term swings. I believe, Brazil as one of the BRIC countries has plenty of runway for growth ahead and utilities such as CEMIG should, in the long run, benefit from it.

    My question to you is do you have any thoughts on CIG's ability to maintain its dividend as Brazil goes through the political process you mention in your article above.
    Sep 29, 2014. 10:43 AM | Likes Like |Link to Comment
  • Dynex Capital Pays 12% Dividend Yield And Earns A Recommended Buy And Hold [View article]

    Thank you for this article. I am with you all the way and have a substantial position in Dynex and have not only held on to it but opportunitiscally added to it, in spite of the market gyrations and the related noise.
    Sep 20, 2014. 09:28 AM | 2 Likes Like |Link to Comment
  • Retirement Strategy: How Will Rising Interest Rates Affect Dividend Growth Investors? [View article]
    Hello RS, Good article although I do not fully agree with your thesis. I am with DAS555 above and believe that any investment should be made on the basis of the underlying soundness of the business and if that has not changed then there really is no justification for rotating out of it, just because others are doing so. As for the effect of rising interest rates on mREIT stocks such as NLY or in my case DX, my simple way of thinking is that as long as there is a good mix of short and long term assets in the portfolio of these mREITs, it should all balance out since the interest rate they will lend out at will also rise as the cost of borrowing rises.

    Sep 14, 2014. 10:23 AM | 2 Likes Like |Link to Comment
  • A Conversation With Prospect's Grier Eliasek [View article]
    Thanks DS for sharing this informative article.

    I am long PSEC and have been concerned about their recent performance and their ability to meet future dividends from their earnings. I have been thinking about unwinding my position. However, before I did that, I wanted to hear what the PSEC management had to say about it.

    I therefore called in to the August 26 conference call. While there was no additional information, beyond what was already disclosed, provided at the call I did come away with a renewed confidence in their senior leadership in general and their COO in particular. I was therefore pleased to note that my assessment aligned well with yours and that you, like me have concluded that although there are no guarantees for how the company will do in the future, at least they appear to have a team in place that understands their business and the challenges associated with consistently delivering the high yields that their share holders have come to expect and many like me depend upon.

    I have therefore decided to hold my position and indeed add to it if and when opportunity arises.
    Aug 29, 2014. 11:46 AM | 3 Likes Like |Link to Comment
  • Update: Prospect Capital's Earnings For Fiscal Q4 2014 And My Reaction To The Results [View article]
    Thanks for another fact based analysis and your conclusions. I look forward to these.

    I am long PSEC and like other investors was disappointed with their latest results. However, before I took any action, I wanted to hear what the management had to say about the results and what if any plans they had to better meet future dividends from income rather than retained earnings or return of some capital.

    Although there were no concrete plans provided beyond what had already been disseminated earlier, I did come away with some renewed confidence in the management. It was clear that the top brass of the company had a good grasp of the business and the challenges that lay ahead in meeting the high dividends that the share holders have come to expect and indeed in may cases rely upon for their income. I am optimistic that based on the steps the company has planned for the future, it will get back on track albeit not as quickly as the investors may like.

    I have therefore decided to stay with my holdings and have prepared myself to accept a temporary(?) reduction in dividends to keep it more in line with the earnings and the resulting and inevitable drop in the share price. After all, even if the dividend is cut to about $1.00, it will still yield about 10% and there are not very many investments out there that provide this level of return and have consistently done so for the last 10 years.
    Aug 28, 2014. 11:40 AM | 3 Likes Like |Link to Comment
  • Dynex Capital Is The Best Buy In The MREIT Universe. [View article]
    Long DX and have been for the last 3 years. I like its dividend yield and even though it was lowered twice this year, have still kept my position. I am, however, concerned about its negative share price performance and wonder if it could be presaging a further dividend cut. On the face of it, NYMT appears to be a better investment, as mentioned by cojoel above.

    Any comments?
    Jul 27, 2014. 03:15 PM | 2 Likes Like |Link to Comment
  • Prospect Capital: BDC Dividend Coverage Part 18 [View article]
    BDC Buzz, would appreciate your response to my question.

    Jun 26, 2014. 09:34 PM | 1 Like Like |Link to Comment
  • Prospect Capital: BDC Dividend Coverage Part 18 [View article]
    Hello BDC Buzz, Enjoy your articles.

    I am new to BDC's and trying to understand the details of some of the big expense items. One of these appears to be Management Fee and incentive Fee. Can you pls explain who are these fees paid to and why do you believe they are higher than the industry norms.

    Thx and look forward to your reply.
    Jun 26, 2014. 09:23 AM | Likes Like |Link to Comment
  • Prospect Capital: Don't Ignore Concentration Risk [View article]
    DIA, much appreciate your writing this article and making us aware of some of the factors that constitute the risks associated with any high yield investments.

    I invested in this company after studying their past history and concluding that they have managed their portfolio well and have, in the most part, been able to pay the dividends out of their earnings - a critical requirement for me to invest in a high dividend paying company.

    My question is, do you have any data that shows whether their recent investment mix has changed over the years thus causing concern with respect to the over concentration of assets in a small number of companies.
    Jun 12, 2014. 11:01 AM | Likes Like |Link to Comment
  • Prospect Capital: Why I Am Buying This Book Value Bargain That Yields Over 13% [View article]
    Reinforces my belief that if a company can meet its dividend obligation through its net income, it is a good business and worth investing into it - specially if it has been doing so for a good many years.

    PSEC met this criteria. Therefore during this "tempest in the tea pot" I am glad to have increased my position in this company by 30% at an attractive price.

    I am now counting on its management to put this episode behind them and get back to running a good and profitable business.
    Jun 10, 2014. 06:06 PM | Likes Like |Link to Comment
  • Does Share Price Recover After Dividends Are Paid Out On The Ex-Date? A Case Study With Cheung Kong Holdings [View article]
    Interesting article that addresses the question I have myself been pondering on. Although, I understand the conclusion drawn by the author, the underlying stock price must recover eventually lest in the limit it would approach zero, which clearly is not the case for this or most any other stock.

    My own non scientific thinking is that as long as the dividend is adequately covered by the income of the business in question, the stock price must eventually recover albeit not in the 5 day time frame examined by the author.

    Would be interested in hearing from the SA community their thoughts on this rather interesting and important question for people like me who count on dividend income and who are concerned about not eating into the capital.
    Jun 3, 2014. 10:09 AM | 3 Likes Like |Link to Comment
  • Pfizer Offers A Nice Dividend... But Not Much More [View article]
    I believe this conversation has gone on longer than it needs to. You are all saying the same thing just looking at it from different perspective. I suggest it is time to move on and get back to discussing the future value of this stock.
    Jun 1, 2014. 10:44 AM | 2 Likes Like |Link to Comment