Hello, Fool! | Login | Signup | My Fool
Oct 12, 2008 7:45 PM ET | Feedback | Site Changes | Help
The Company is a business development company that also serves as publicly traded alternative asset manager.
View All Commentary (ACAS)
Recs
seadragons (57.27) Submitted: 5/15/07 8:45 AM : Start Price: $38.67 ACAS Score: -24.59
I like an 8% dividend with a history of being raised regularly and a management that states flat-out it won't declare a dividend it thinks it'll ever reduce. It's a hedge against price erosion. Then I look at the capital appreciation happening underneath, and I see dollar signs.I'd be more worried about the company and whether it can keep up the good work, except for two things. First, I read about the lead executive. His story is interesting, and it reveals something about his values. He's not looking for an easy buck, he's working for smart opportunities. And this leads to the second point: the company was recently punished for "missing" a quarterly prediction. Why? A deal didn't close during the quarter. ACAS' management would rather miss a deal than enter one on the wrong terms. ACAS' investing discipline, while it may drive analysts and traders nuts, should warm the hearts of long-term investors.ACAS participates in a variety of financing activities, holds senior debt, etc. even for companies for which it doesn't provide one-stop-buyout. ACAS makes money both from these investments and from its portfolio companies. The dividend is paid from ordinary income, and ACAS reinvests its capital gains.I see ACAS as a long-term growth story which, unlike Berkshire Hathaway or Markel, pays a dividend. Yes, it can't get paid to borrow money like an insurer, but its performance speaks highly for its management's competence in creating capital appreciation while paying income.Note: ACAS has a DRIP that enables owners to re-invest at 2% below market price. TD Ameritrade participates in the DRIP even though it's not listed on ACAS' list of participating brokers, so your broker may allow you to reinvest at a 2% discount, too. Check it out.
Report this Post Replies: 5 | Reply
Oops! There appears to be a problem with your comment. Check to see if there's something you left out.
seadragons (57.27) Submitted: 6/12/07 6:39 PM
Recs: 0 | Rec This
Is there some reason ACAS' dividend isn't being considered in the stock's return? To ignore the dividend in calculating the returns on dividend stocks is nuts.
Report this Post Reply
Gtrinvestor (99.99) Submitted: 9/06/07 1:55 PM
The dividend reduces your initial purchase price in CAPS.
seadragons (57.27) Submitted: 11/01/07 4:21 AM
Silly me, so it does!Dividend raised again, I see :-)
seadragons (57.27) Submitted: 12/20/07 4:36 PM
Recent reports regarding accounting are missing the meat behind the issues. Giving the shares a haircut over valuation practices worries aren't rational because (a) ACAS' valuations have been independently verified not just by an outside valuation specialist, but by actual buyers with real money who shelled out genuine cash for a cross-section of ACAS' whole portfolio at the price ACAS said it was worth, meaning that the assets have stood the real test of valuation: good faith purchase by an informed buyer; and(b) Worries about ECAS valuation ignore that ACAS, as >50% owner of ECAS, can simply liquidate and achieve the market value of ECAS' assets, so the share price of ECAS (which trades below NAV on a London exchange segment that I can't access through the brokerage I'd normally use to buy on the London exchange) below NAV doesn't mean ACAS' rights are worth less than NAV; ACAS could get NAV any time it preferred to get the value rather than to enjoy the returns on its so-far-perfectly-profitable investments.I bought more at 32.98. I am also set up in the company's DRIP. Let's hear it for a rocking dividend!
seadragons (57.27) Submitted: 12/31/07 2:04 PM
Bought more at 32.5.Given the track record of management, this is some kind of steal here.
Terms & Conditions
RSS Headlines
Fool UK