Skip The Preferreds Of Oxford Lane, Buy The Debt Instead

(10min)

Summary

  • Market turmoil presents opportunities; however, Oxford Lane Capital's common stock is too risky due to increased volatility after recent capital raises and tariff-induced sector-wide impacts.
  • Oxford Lane Capital's portfolio is heavily invested in high-yield CLO-equity tranches, making its common stock volatile and susceptible to economic uncertainties.
  • Preferred stocks appear overvalued compared to Baby Bonds, which offer better yields and higher security in the capital structure.
  • In uncertain times, we prefer defensive investments like Oxford Lane Capital's Baby Bonds over its common stock and preferred stocks.
  • This idea was discussed in more depth with members of my private investing community, Trade With Beta. Learn More »
Collateralized Loan Obligations CLO is shown on the business photo using the text

Andrii Dodonov

Co-authored by Relative Value.

Overview

Big market turmoils often create opportunities, and it is up to the active investors to seek and potentially profit from them. Oxford Lane Capital Corporation's (OXLC) market evaluation took a hit in March 2025, after

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This article was written by

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Arbitrage Trader, aka Denislav Iliev has been day trading for 15+ years and leads a team of 40 analysts. They identify mispriced investments in fixed-income and closed-end funds based on simple-to-understand financial logic.

Denislav leads the investing group Trade With Beta, features of the service include: frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of 1200+ equities, IPO previews, hedging strategies, an actively managed portfolio, and chat for discussion. Learn more.

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

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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