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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: rllee who wrote (36009)	11/24/2009 11:09:39 AM
From: MCsweet	Respond to of 78659

I tend not to like companies that continually dilute shareholders with stock offerings (I think they had at least three this year), particularly when they are trading at a discount to NAV. However, they seem to be executing their strategy. Also, if the CEO buys stock then maybe he will decide to cut down on the offerings so he won't dilute himself (or maybe he will just buy more stock in the offerings). MC

To: rllee who wrote (36009)	11/24/2009 11:26:54 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78659

I sold my PSEC after company machinations with share issuance and repurchase. I could not understand why, if the company were in good shape, it would dilute the stockholders by issuing more stock. And there were two such issuances, within a couple of months, if I recall right. Following that, the company then initiated a stock BUYBACK. Maybe it's a way to raise ammo for acquisitions and keep the balance sheet debt-free, but I don't like this jerking around. And the possibility they'll continue doing it. A company so willing to issue new shares when stock is below NAV, they'll maybe be even more willing to do so if/as stock rises above NAV. Company management though is positive about the company, as you point out by their purchases. I'd say maybe worth a shot based on management's buys. Too expensive for me though at current price. Maybe if the stock can be bought closer to $10, where it's been recently.

To: rllee who wrote (36009)	11/24/2009 11:45:39 AM
From: Paul Senior	1 Recommendation Read Replies (2) \| Respond to of 78659

Fwiw, I'm adding to my position in bdc, FSC today. I like it better than PSEC. It has several recent small insider buys at prices higher than current price. It has Greenlight (David Einhorn) as an investor. It has a 10% distribution yield. It's only been public for a couple of years. Management says that means there are no legacy problems, and they have had opportunity to deploy money recently when competition has been much less. It trades at .85 stated bv. and does not have much debt (according to Yahoo). finance.yahoo.com