Oxford Lane Capital estimates higher NAV per share in January vs. December

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• Oxford Lane Capital (NASDAQ:OXLC) on Monday estimated its net asset value to be $5.02-$5.12 per share as of Jan, 31, 2023, up from $4.63 at the end of 2022.
• Expectations for a higher NAV comes after OXLC, a close ended fund that invests in fixed income securities, posted mixed fiscal Q3 results as net investment income slipped from the prior quarter, while total investment income gained.
• The fund had around 167.4M shares of common stock issued and outstanding as of end-January.
• Seeking Alpha contributor Ryan Bowen took a deep dive into OXLC and its six other publicly-traded issues.

Comments

[w.sak]

I saw a funny cartoon that made more sense than most comments. The wife told the husband , When you bought your first computer, you should of bought stock in he company instead !

[w.sak]

I keep getting the dividends till I see a sell price I like & then a buy back after a an ex date.

[analystmjh]

@w.sak CLO equity is a great trading product. The pogo stick of debt instruments. If only we had a less expensive wrapper as individual investors

[analystmjh]

I hope to get an answer eventually, does anyone have any information at all re: the sudden departure of this fund's portfolio manager? The firm refuses to address it but he has been gone for weeks as the common shares have soared to 20% above NAV. Apologies for anyone seeing me repeat this.

[TBG_MK]

H8r's in 3, 2, 1...

[Steven Bavaria]

It's probably rising because the market for healthy corporate loans has risen from the low-90% range where it was a month or so ago to the mid-90% range recently. Since a CLO's equity = the value of its loans minus the amount of its debt, any increase in loan values raises its equity value, from an accounting standpoint.
This can be a mixed blessing of course, as we've discussed in the past with other CLO funds, since the cheaper loans are in the market the more money (future capital gains and extra loan spread) CLO investors make when they reinvest their cash flow (i.e. loan repayments) in new loans at bigger discounts. So while increases in loan prices can increase the theoretical accounting value of CLO equity, a decrease in loan prices can actually increase a CLO's business value and future cash flow. (For more info re this apparent inconsistency, see this: seekingalpha.com/... )

[sme20]

Still a debt holding trading at a 22% premium. No thanks. This happened in the summer and didn't last. Let's see if this can be sustained this time. Long term chart remains negative. Balance sheet stretched by 167 million shares. Makes any per share numbers tough going forward. Good to see that January was quite for share sales.

[analystmjh]

@sme20 Not to mention - where did Deep Maji go? He disappeared

[DCBAXX]

@sme20 the “premium” is a quarterly appraisal of the NAV in a distressed sale. It’s not like an ETF NAV where it’s easily compared to the current price of marketable securities.

[sme20]

@DCBAXX The market for them may be limited, but i don't buy off on the lack of accuracy and reliability given they are consistently calculated and consistent metrics from the debt market are applied. At the end of the day, whether you like it or the amount means anything, the reality is it does calculate the net assets on the funds balance sheet and that has leverage implications for the fund. Its comfortable to have an answer to say the amount isn't really measurable, and yet there it is on an audited balance sheet. Menas something to me.

[CrimsonPhoenix]

Listed as a Hold by SA Authors, a Strong Buy by Wall Street, and ... hmm ... why's it got a 'Not Covered' listing on the Quant I wonder? Long 1000 shares, it's a nice little bump to the monthly paycheck at the moment. ;)

[StevenK1]

@CrimsonPhoenix CEF's never report with the SA quant. Wish they did.

[R&J Schultz]

Why is the expense ratio so high?

[kedzie114]

@R&J Schultz int rates, mgt fees, etc. but divi is net of expenses

[DCBAXX]

@R&J Schultz Closed end funds in general have high expenses since the AUM remains very low relative to ETFs and mutual funds. CLO equity is a very niche actively managed high yielding asset class that basically trades through a network of insiders. The yields are still insane even after accounting for the huge fees, very risky relative to a lot of other income oriented investments though.

[John Windelborn]

@DCBAXX compared to some other income investments, sure, but I would say it's not much more risky it's just more volatile. That and most retail investors are used to highly valuing NAV which leads them to false conclusions.

[thebellsareringing]

Very happy with OXLC. One of my largest holding and cash generators..Soon I will have a capital gain, plus the dividends. I also own the preferred.

[kedzie114]

Good to see it start rising.

[patientmike]

Keep the divs flowing!