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Strategies & Market Trends : Value Investing
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To: RumbleFish who wrote (39944)11/8/2010 12:04:39 AM
From: Paul Senior  Read Replies (2) of 78654
 
Thanks for info on TAXI. The distribution cut is old news.

I'm not worried about the company's financial adequacy. (Perhaps I should be.) Basically the company's got a lock on the NYC taxi medallion business, and I'd be more worried about legal/political changes that might alter that.

With a distribution yield of $.60 (annualized) on a recent new-high price of $8.78, that yield is 6.8% -- good enough for me to hold on, not so attractive for me to add more shares. And so holding all my shares is what I'm doing.

BDC's have been discussed here for several years. All that I'm aware of have fallen. Most have recovered. A few have not.

Buyers in the sector now seem to me to be late to the game. Jmo. I'd not be a buyer of any bdc stocks in significant size now that the stocks have recovered. It still might be iffy whether the businesses are going to be okay going forward, or if the companies will again falter.

That doesn't mean I don't have positions in several bdc's. Just that I'm not willing to add to any of my bdc holdings at current recovered prices. Possibly it's my issue -- once I've seen them fall (and fall sharply and deeply they have), I know they can drop again, regardless of yield. There's also a trust factor for me -- non-alignment of insiders with outside shareholders is the typical issue here. That manifests itself in insiders getting a % of profits when holdings are sold, issuing shares regardless of book value so as to manage a larger business and reap larger percentage of assets under management, and so forth.

TAXI might be one of the better of these bdc types. Controlling Murstein family at least has a substantial stake in this business that they've run for decades.
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