$2.94
-0.08 (-2.65%)
American Capital, Ltd. (ACAS)
CAPS Rating:
The Company is a business development company that also serves as publicly traded alternative asset manager.
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Going to zero. Given my usual short-term bad timing, it'll probably go to $3.00 before it goes to zilch.
what will happen on march 2 when they release q4 earnings?
Don't have a clue. Sorry.
So you're assuming their portfolio of holdings is worth zero? I find that hard to believe, even with M2M.
I'm curious on your rationale? Granted, the most recent quarter was pretty sour, but here's what I see: EBITD margin in excess of 75% (perhaps not updated for MRQ), total debt to equity ratio less than 1, super-low price-to-cash-flow and price-to-tangible-book ratios. Unless we assume "more of the same" for the next three quarters, the company doesn't specifically look unhealthy to me, only beaten down. Even the debt-covenants ordeal shouldn't pose a huge risk, as it's never in a creditor's best interest to force a call or (worst case) push a company into bankruptcy.Going down for a while, no question. Going to zero? I'm not so sure.
Splat!
CAPS went from 3 to 4 stars....hmmm
We're reaching the delusional bullishness state here on ACAS. About time for me to unveil my red thumb again.
GMX --- why the perma-bear on this stock? Im really curious.
There is no intelligent bearish commentary on ACAS... e.g. "going to zero", WOW!, real enlightening... "time for me to bring out my red thumb", WOW!, chock full of well supported facts... I feel that a large part of the problem ACAS faces also has to do with naked short selling. If the SEC implements meaningful reform with regard to regulation and enforcement of anti-naked-short selling rules, ACAS should see an increase in share price, and decreased volatility. ACAS has been a target of short sellers (it seems) ever since Einhorn decided to initiate a short position against ALD, and even wrote a book outlining his rationale denigrating the BDC model. It seems that since this time, all BDC's have been considered fair game for Hedge Funds who illegally "pay off" market makers for "rental" of their naked-short-selling exemption, by channeling order flow through the corrupt market-makers willing to "play ball".Coupled with the mark-to-market changes (FAS157) and the severe decline in the macro economy, short sellers intent on putting ACAS into a death-spiral almost created a self-fulfilling prophecy. I think the removal of ACAS from the S&P 500 was almost the final cut.Still... NAV remains FAR NORTH of current share price, management has taken prudent steps to hunker down and weather an extended financial crisis, and the illegal naked short sellers have not been able to drive the final nail in the coffin.As such, investors have started to look beyond the fear mongering, and are now focusing on the actual value and opportunity presented in ACAS shares. There is still risk if the economy continues to tank... but it appears now as though the worst has past, and ACAS is one of those stocks that could exhibit a substantial increase in share price (4 or 5 bagger from current levels) in a very short period of time as soon as it starts to trade on fundamentals, fear subsides, shorts are forced to cover, and illegal naked short selling to depress share price is curbed.
I think it will tank. First they took away our dividends noiw they want to have 4 reverse stock splits.
irc1944:The dividends in this company depend on profits because they're a BDC. No profits due to huge portfolio loss equals no dividends. I'm not happy either, but at least shareholders will get the rest of 2008 payouts later this year.The reverse stock splits do not bother me at all. Management flat-out said it was to take away any pressure from the listing agencies. If your stock stays in low-single-digit territory for too long, no matter WHAT your other financial facts, you get threatened with being delisted and all the fund managers run for the doors. I don't blame them a bit for doing this until their investments get back on their feet.I'll reiterate my prior opinion: It may languish or go down again, but it won't stay there forever. This year, maybe... but not forever.