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Tracking The Changes In MAIN's NII Projections

I projected that the analyst NII projections for MAIN would fall.

The projections from late last week - pre-earnings release:

Earnings Est Current Qtr.
Dec 14
Next Qtr.
Mar 15
Current Year
Dec 14
Next Year
Dec 15
Avg. Estimate 0.58 0.58 2.18 2.39
No. of Analysts 8.00 8.00 8.00 8.00
Low Estimate 0.56 0.55 2.17 2.30
High Estimate 0.59 0.61 2.20 2.61
Year Ago EPS 0.57 0.52 2.06 2.18

The projections Monday morning:

Earnings Est Current Qtr.
Mar 15
Next Qtr.
Jun 15
Current Year
Dec 15
Next Year
Dec 16
Avg. Estimate 0.56 0.58 2.36 2.47
No. of Analysts 8.00 8.00 8.00 4.00
Low Estimate 0.51 0.54 2.18 2.29
High Estimate 0.61 0.61 2.61 2.65
Year Ago EPS 0.52 0.53 2.20 2.36

There has yet to be any change in the 'high' projection. I would expect that projection to fall. I still expect the average projection to fall to something close to $2.30. And I expect a price reaction when a company gets a (2.39/2.30) 3.9% decline in the earnings projection. (One can see from the two tables that the low 2015 projection fell from $2.30 to $2.18 -- or a fall of $0.12/share. I am only projecting a nine cent fall -- and that may be insufficiently bearish.)

This is one of the stats that retail investors will fail to notice -- until the analysts tell them to. Then there will be a price reaction. I would expect a temporary fall below $30.

MAIN still has very strong NII coverage of the dividend - and it is the lone 'growth' BDC. The 'yield + CAGR' will still be attractive after the CAGR falls to 4.5% from the previous CAGR of something around 6%. Now is the time to be thinking about whether MAIN merits inclusion in your portfolio. Be prepped when (or if) MAIN hits $29.99.

Why am I emphasizing that you ponder MAIN? Good things happen to your portfolio "weighted average yield" and "portfolio CAGR" when you have an investment yielding 6.5% with a CAGR of 4%. In general, those investments that improve your yield generally slow down your portfolio CAGR. For many investors, an investment in MAIN (if it performs in alignment with my projections) could improve both.

If it helps you -- think in terms of 'combo investments'. Some of you have yet to invest in stocks like APH and TEL, or UNP and UPS, or HRL and HSY, or MLPs like MLPX and SHLX. In your mind, those great stocks have too small a yield. So combine your investment in MAIN with one or two of the above. The combo yield would then be something you could find attractive. And you will in time generate some capital gains that will replace some of your (upcoming) yield hog mistakes.

Disclosure: The author is long MAIN.