Oaktree Specialty: Fear Creates 11%-Yielding Buying Opportunity (Rating Upgrade)

The Asian Investor
29.11K Followers

Summary

  • Oaktree Specialty Lending's shares dropped due to a rise in the non-accrual percentage, creating a buying opportunity.
  • The BDC's focus on senior secured loans and ability to work out problematic loan situations mitigate the impact of non-accruals.
  • Oaktree Specialty Lending's actual financial performance was strong, with growth in interest income and net investment income.
  • The 11% yield is still covered by NII and OCSL stock is now trading near its longer-term P/NAV ratio.

Stock market down

Yuichiro Chino/Moment via Getty Images

Oaktree Specialty Lending (NASDAQ:OCSL) suffered fear-driven selling pressure after the BDC’s lending performance deteriorated in the December quarter. A non-characteristic rise in the non-accrual percentage caused Oaktree Specialty Lending to slide from $21.50 to $19.00 after

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of OCSL 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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