Wednesday, May 2, 2012

Fool Lives Up To Its Name

The Motley Fool once more published that buying shares below NAV was bad for shareholders at American Capital Ltd. Unfortunately, it still hasn't managed to make an even slightly plausible case that management somehow is injuring shareholders through funds mismanagement, when it raises NAV per share by retiring shares at one third below NAV.

A Jaded Consumer rebuttal to the Fool's latest missive is called Why American Capital Is Buying American Capital.


Anonymous said...

Jaded, love your continued analysis of ACAS. I am long and strong. What do you think of FLY Leasing (NYSE: FLY), great dividend, NOI, and sharebuybacks? Thanks!

Jaded Consumer said...

I'm afraid I don't know enough about FLY to have anything like an opinion on it. In particular, I'd want to better understand the market for leasing aircraft -- a field in which I don't feel especially informed.

I do much better developing conviction in tech or investing, where I have some background.

Anonymous said...

Thank you Jaded. I can understand where you are coming from. Do you have any opinion on PSEC (also growing NAV AND paying out a monthly dividend >11.5%). Seems more attractive than ACAS at the current time? Any analysis would be appreciated!

Jaded Consumer said...

I haven't looked at PSEC, previously, but according to the descriptions I just read it sounds like it has an external manager (making it more akin to AINV or AGNC than to ACAS) and primarily invests in debt. A look at's page on Prospect Capital depicts the company's net assets steadily climbing while NAV per share was in decline in 2009, suggesting dilutive issuance. It also looks like the shares presently trade without much of a NAV discount (and recently traded at a premium to the last-published NAV).

PSEC looks like it's of potential interest to folks desiring a dividend (which seems to be paid monthly, a plus for those intending to live on it). Is there a reason to believe the published NAV understates the value of the assets available to generate returns for investors? Is PSEC a dividend-only story, or is there a reason to expect strong growth in principal?