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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (47387)	4/11/2012 10:55:50 AM
From: Sergio H	Read Replies (1) of 78751

Finding BDCs as a value play is a good question as they all trade close to book value and come with prescribed debt limits. Buying a BDC is a bet on management. Evaluation of past performance in order to gauge expectations for future performance. You can't really evaluate a BDCs holdings, so you have to evaluate management. BDCs grow only by increasing shares or increasing debt. You want to find BDCs that have successfully managed growth while maintaining their dividend and sales growth. A BDC that is producing growth while maintaing a low debt ratio is favorable as they are able to move quickly when they find an opportunity and have demonstrated their ability by their prior success. A quick look at Yahoo is a good place to start....gives you the five year dividend avg., debt to equity ratio and earnings growth. A good BDC bet has demonstrated earnings and income growth and a stable div. without suffering dilution of earnings when increasing shares or debt. Some BDCs pay a monthly div. PSEC is my largest holding. I think it holds up well in evaluating their payout history, their growth rate and their debt to equity position. I don't know if its a value stock.

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