As I have mentioned in previous newsletters, I will not be writing articles on Seeking Alpha as frequently as in the past so that I can focus on Premium Reports.
Included in this report:
- BDC Market Update
- Current BDC Multiples of NAV and NII
- Actual Total Returns by BDC
BDC Market Update
As discussed in many articles including “Top 10 BDC Issues For 2015” and “High-Yield BDCs Hit New Lows”, I believe BDCs could outperform the S&P 500 in 2015 for the following reasons:
- Continued outflows from leveraged funds resulting in more favorable loan pricing
- Less early loan repayments and refinancing at lower rates
- Continued bank regulations leading them to larger borrowers and reduced Level 3 assets
- Investors looking for returns that will beat the S&P 500 (likely to be ~5% for 2015)
- Low NAV multiples that could be corrected
- Overreaction to potential energy related issues (for certain BDCs)
Current BDC Multiples
I use core net investment income ("NII") that can be different from reported EPS for some BDCs because it excludes both income and incentive fees related to capital gains as well as some of the major onetime expenses, including fees related to amending debt facilities. I also do not include excise tax expense.
Explanation of total returns: The ‘Change in Stock Price’ assumes you purchased the stock at the beginning of the year and sold as of March 31, 2015. Dividends do not assume reinvestment and are calculated using the amounts paid divided by the purchase price at the beginning of 2014.
Please visit ‘Premium Reports’ if you are interested in more information on BDCs including:
- Rankings (risk, return, pricing, dividend potential)
- Individual BDC Projections
- Pricing and Valuation
- Dividend Coverage Potential
- Suggest BDC Portfolios
- My Current Positions