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

To: Jurgis Bekepuris who wrote (54705)	1/4/2015 1:18:32 AM
From: Elroy	Read Replies (2) \| Respond to of 78625

PSEC was issuing lots of shares when the price was above book value. It's accretive to book value (since the shares were sold at a premium), it provides more cash which produced more fee income for closing deals, and it helped the company gain scale so they became one of the largest BDCs (which hopefully has some benefit). Now that the shares are below book value AND the dividend has been cut, they probably won't issue new shares (until the share price is once again at a premium to book). So yeah, they were growing the company, but not growing the per share performance. But I think they're going to say that it was to the long term benefit of shareholders. Better to be the second largest BDC with the same per share performance than the 10th largest BDC with the same per share performance. Time will tell if it's true or not. PSEC seems like a good way to pay little attention and get about 10% per year on your funds. I can't imagine what could go wrong now other than complete catastrophy where all their loans blow up on them. Buying a loan company at a price to book discount seems pretty good, but what do I know?