MCG Capital Corp (MCGC)

bought into this at 60 adn 70 cents with real money and took a decently sized stake. MCGC should benefit from recent covenant revisions and from mark to market accounting revisiosn. See my march blog on mark to market accounting and why I invested in BDCs for further discussion.

way overbeaten. possible takeover target.

Trying to fish the bottom. Stock is beaten down, because of cancelled dividend.

Plus:

- 3 star in CAPS

- Book Value about 10.-

Minus:

- Cancelled dividend

- Managment is not trustworthy

- Overall bad situation in financial sector

It has been more or less washed from its dirty debts and by doing so has been pounded into the ruts. I suppose the economy could go completely down but I doubt it. Walmart had a bad day and that helped push MCG Capital down further. Go to your local Walmart and see that people are still packing the place. MCG is now clean and shall do quite well in the next six to twelve months.

I've followed these guys for about a year now waiting for them to pull the plug on their Cleartel debt and kill the dividend, thinking the bloodbath that would ensue would provide an excellent opportunity to buy a decent portfolio of diversified high yield debt at a tremendous discount to even currently depressed market values.

I am confident that even without access to the 2 credit lines they disclosed would be lost, they are in a stable enough position that this isn't a zero, and would be exceedingly confident were they able to monetize their Broadview investment. At 2.88 all the hopes for Boroadview have been washed out of the stock, as has indeed all hopes of recovery on Cleartel, as it should. We also (since we have no dividend now) are no longer paying for the PIK income assumptions we were warlier this year.

We are left with a stock currently in the midst of wholesale abandonment by it's yield-seeking retail investor base, trading at under 6x my estimate of 2009 NOI generating ability, and well over 15% yield on what I conservatively think could be 2009's dividend level.

At 3.96 (my purchase price) and with the quarterly dividends of .27/share, not a bad return for my investment. The FUD factor seems to be waining and the economy may be on the rebound. I expect this stock to start riseing... if they don't go bankrupt fisrt. :)

Low share price offers an attractive entry point along with "adjusted" dividend payout which should boost its value as the market recovers. Questionable management strategy but overall a solid company.

The pummeling is overdone, this company is okay even with the reduced dividend

This company lied to it's shareholders and the shareholders punished them pretty good. They had a rights offering that diluted shares, and 3 weeks after the RM was complete, they cut the dividend in half. They had a -92% drop in EPS last quarter. Had they not raised cash from their own shareholders, they would have had a -150% EPS. Way to dissapoint your supporters!!

They have an investment they are holding onto that is not making any cash. For some mysterious reason, they can't explain anything about the financial state of this investment. They say it's not accuring money, it's not costing money, blah blah blah. Something is really wrong here. Good luck!!

"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it."

As with all my picks: A very attractive P/E, excellent EPS growth rate and high five year growth prospects.

Tough times but I think they can pull through... if nothing else it's worth a small chance bet that they can survive some credit issues.

Two factors have influenced my opinion of this stock recently. The first is that the Rights issuance by the company is about complete, I think that will reflect the "low" point of the stock. The other is that the price to book value represent a significant discount. I believe this to be a significant factor for a company of this nature. This discount at some point will evaporate, and my thought is that it will come mostly in a higher price of the stock. Word of caution, this is still a small cap stock and has inherent volatility and risk.

I read the article "Contrarian Shopping List" and I seem to be missing something. I looked at Yahoo finance for "earnings estimates' and found that the actual earnings for MCGC were 40,51,42,48 cents for $1.81 total for the last four qrts. That combined with the fact that MCGC issued an extra 2 cent div in late march would indicate that somebody at MCGC thinks they are making money. Now even if they cut their DIV in half they would be paying our close to 10% and that seems to be a good dividend.

SO WHAT AM I MISSING????????? WHY THE BEARISH TALK??

Earnings Suprise... above is good. Dividends always help too.

Don't mind me, I'm testing some strats.

A microcap suffering from guilt by association. There is nothing wrong with this stock that time won't figure out. Look at the fundamentals and the companies underlying assets to see the possibility.

it'll underperform during these financially troubling times but will jump right back up after that. But it'll continue to provide investors with dividend income throughout the year to make up for losses.

Under value.