BDC Market Weekly Review: Watch Out For The Management Narrative

Nov. 20, 2021 10:36 AM ET, , , , , , , , , 24 Comments

Summary

  • We take a look at the action in BDCs through the second week of November and highlight some of the key themes we are watching.
  • The BDC sector has continued to rally through November, buoyed by good earnings and NAV gains in the sector.
  • Though valuations have risen in aggregate, the high aggregate sector valuation is skewed by a small number of companies which leave quite a few opportunities for investors.
  • We take a look at why investors often need to do go beyond the narrative provided by management in their commentary or presentations to get a clear picture of a given company.
  • We also highlight new pieces of our analytics toolkit such as historical NAV ranges, quarterly total NAV returns vs. the sector and the RSI metric.
  • I do much more than just articles at Systematic Income: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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This article was first released to Systematic Income subscribers and free trials on Nov. 13.

Welcome to another installment of our BDC Market Weekly Review where we discuss market activity in the Business Development Company sector

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This article was written by

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ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CGBD, FDUS, PSEC, PSEC.PA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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