I'm not seeing any appreciation for the data I have provided for you here, just more questions and criticism.
Not sure what you mean the "data you have provided". You mean the analyst saying he thinks the spins may not provide as much value as it sounded on the conference call? I'd call that opinion, not data. I gave my opinion that the spins, if they trade at a premium to book, should enhance shareholder value for PSEC. If they don't trade at a premium to book, then why spin them out? My logic is much better than that guy's unsupported opinion - he doesn't give any reason why they won't add value, he just says so and leaves it at that.
Or by data do you mean that PSEC issued equity below book value in .... 2007? I pointed out that all PSEC offerings (in recent history) were above book value in 2012 and 2013, and just a little below book in Q3 2014. My data is more useful than yours! :-) Who cares what they did 7 years ago?
I think you're overestimating your contribution a bit. Anyway, there isn't much in the way of "new" data coming out of PSEC or any of the BDCs until reporting season begins at the end of January.
You don't trust management? They invested a good chunk of their own money buying PSEC stock at $10.20 in Q3 and again around $9.20 in Q4. Now it's $8.40! I don't know if I trust them or not, but I've got no reason to think they are so tricky they invest their own money in PSEC in order to fool me.
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At the end of the day PSEC remains for me sort of a black box that spits out money. I can't say I'm 100% confident in their strategy. But all the BDCs are trading below book value, and I don't know why. The only good explanation that I've heard is that their energy loans (usually 5% of their portfolios) have a good chance to default. That may be, but I don't see how 5% of the portfolio defaulting means the shares should be down 20%. Down 5% sounds more like it.
I added some PSEC down here on margin, I plan to sell it before the end of February, but I'll likely sit on my core position for years. If massive defaults don't appear, I don't see why the entire sector should stay below book value, and while I wait I collect my ~10%/year. |
