ACAS --
this is a hard company to follow. But I follow it VERY closely.
2 things happened recently. 2nd Qtr results had lower NOI than prior qtr. Management has always said qtrly results are lumpy -- they said that this was a blip. Said 7 cents of the 9 cent drop was due to raising more equity then necessary prior to the war, just to be safe. listen to the conf call. look at their website and view the slideshow. they also reaffirmed the ACAS will meet all profit, dividend and other goals. said that already in the qtr, have resolved 2 major non-accruing investments favorably. also said that NOI would be so strong in 2nd half, that dividends will be paid from NOI, although that was not a firm commitment. they may use capital gains (that's normal).
the second thing - today -- a disclosure that the SEC asked for some documents.
finance.messages.yahoo.com
finance.messages.yahoo.com
Finally, we note that the current valuation remains attractive from the historical perspective. ACAS shares recently traded at approximately 8.1X our 2004 NOI per share estimate of $2.90. Our price objective of $28 assumes that
ACAS shares trade at 9.7X our 2004 NOI estimate, or about 5% below its long-term historical average. ACAS' 5-year historical forward multiple is 10.4X, while its 2-year (i.e., during the recession) average historical forward
multiple is 10.1X.... Our forecasts of $2.90 NOI in 2004 mean that almost all of our $2.93 dividend estimate for next year will be covered by NOI. We forecast that dividends will
rise by approximately 5% in 2004 from $2.80 to $2.93 and that NOI will grow at a faster pace. It will increase by about 14% from $2.55 in 2003 to $2.90 in 2004.
bdcinvestor.com
'In the opinion of management, the ultimate resolution of all such proceedings is not expected to have a material adverse effect on the business, financial conditions, or results of operation of the Company.'
.................
i hope this just is another bump in the road and added to my position. insider buying is very strong and reassuring. i've found mgmt to be honest and open in the past. all my holdings are solidly in the black, even excluding the dividends received. i think it will take 3 to 6 months to resolve, because they need to put $250 million to work, and that could take a little effort. If they become more fully invested in Q3 (now), then Q4 will be quite healthy with added interest and fee income. in the conf call, they said deal flow is very strong.
the conf call had a number of pointed questions from skeptics and possible short investors -- it was good to hear them addressed. they asked about specific valuations, deals, accounting for investment banking fees, whether cash was used to help non-accruing loans to recover... solid answers...
Oh, there was a 3rd ithem -- the barron's article a month ago. it was a poorly research article and has been refuted in various places. it caused the stock price to drop temporally. a lot of the shorts used to opportunity to cover their positions. darn.
I calculate very impressive NOI in Q4, when the $250 million is invested.
regards,
grommit |
