E_K_S. I have full positions in BDC's ALD as well as ACAS.
Hard to say if any in the sector is undervalued. I was PM'd that ACAS could be trouble because of the way the company might be doing business: One internal entity apparently might or could be selling to another to get fee income. (A Ponzi scheme). Possible, but I doubt that significant amounts are involved. But I've really no inkling. Perhaps all these stocks are dangerous or risky --- that might be the reason for the high dividend yields (and occasional short attacks).
I also have shares - in smaller amounts - of all the companies Carl Worth just mentioned.
One argument against the older, established BDCs is that they sell for so much more than stated book value. And they always seem to be going to the trough for more money (by selling "inflated" stock). And it's tricky to understand where the money comes from to pay their dividends. However, the stocks have traded this way and done these stock issuances for years. Which might suggest to bears that yes, you can fool some of the people all the time.
I'm looking at it this way though, that the unseasoned BDCs - ones selling closer to book value - while they're perhaps untested in down markets and/or it's not so assured as how disciplined and competent their managers are in finding and consummating deals - yet because the stocks are selling close to book, the stocks might have a chance eventually to move higher--- closer to p/book of the seasoned BDCs. In any case, the dividends are good while waiting to find out.
As I mentioned in an earlier post, my portfolios' volatility and composition (lot of cyclical oil stocks) is starting to bother me. I'm hoping that the BDC stocks because of their dividends (dividend yields) will temper some of that volatility. I note though that I have relatively large holdings of a few of these BDCs, so even small changes in a few of these stocks show up markedly in my portfolio swings. That's one reason I've expanded the BDC companies into which I'm willing to commit funds. Another reason is that I'm hoping the diversity will reduce risk in any particular company. I have MCGC, and with a dividend yield close to 12%, one does have to worry that there's something just not real good there.
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