Prospect Capital Corp (PSEC)

[Sone]

No portfolio is perfect. Strong stocks sometimes carry the weak ones . It's the overall that counts.

[leftovers]

Myself I like to average up not down. This stock has show extreme weakness so averaging down at this point looks like throwing good money after bad.

I need to see strength not weakness before I consider adding. Most of my stocks are long term holds collecting dividends. I use some short term trades and when I have profit to offset losses in stocks like this one I look for an exit myself. Averaging down is not in the cards yet here.

[bar1080]

With ultra high yield stocks investors always think they can sell before the rout. But in reality they more often average down with the sinking stock. These gimmicks can go out of business, and they often do that in recessions. Sucker bets targeting retirees and the unsophisticated

Question: Why is PSEC having so many problems when the economy is booming?

Excellent SA article today on PSEC:
https://seekingalpha.com/article/4102581-prospect-capital-united-sporting-companies-driving-lower-nav-dividend-coverage?

[Sone]

Not wishing.. said If i add it's at a higher yield to make up for the loss of divy. Then it will bounce as the new freshly cut divy is safe for a while

[leftovers]

Why would you wish this to go into the 5's? If it does you would be better off selling now and buying back later.

The recent news is factored in now. Time to let the dust settle and shake the weak leaves from the trees. Wishing the stock you own drop another 30% from here sounds like a death wish and you should consider selling? IMHO

There is a bunch of better more secure stocks than this one if you really believe it's going drop into the 5's! Good luck

[Sone]

My average is $7.3. May add more but looking for $5's

[Sone]

At $6.2 is 11.6%

[leftovers]

depends if you buy fresh shares and average down? for the people under water now their yield is negative when you factor the capital loss.

What kind of yield are you looking for? that would be a starting point.

[Sone]

11% yield?

[Sone]

Low $6's is 11%?

[leftovers]

not the 4's but will be in the 6's for a while.

Divy drop from .083 to .06. Where will the share price settle, in the $4.00's?

[Scotttrader80]

Divy drop from .083 to .06. Where will the share price settle, in the $4.00's?

[idiotinvestor0]

oh, and the hysteria about the dividend cut: people will start seeing that it was inevitable, a healthy move and it was already factored in (by a panic factor of 50, at least..) in the mini-price crash started late last month. I think this cat isn't dead yet, in the past dividend cuts brought price stability

[idiotinvestor0]

They missed again: .19 EPS for the quarter. But the numbers look pretty good, I'm staying in spite of price gyrations, which I anticipate will die down in the coming weeks: once the panic of the overly unrealistic projections on the "naked" numbers (EPS) dies down, this will start looking the good buy it is.

The company, based on the numbers it released, looks in very good health: debt reduction, income deriving from "repeatables", rather than one time sources, getting out of bad investments and all other prospects for their core business; liabilities to investors; cash on hand.. I think it is extremely cheap, right now, I may even buy some more.

[leftovers]

Today is earnings day Prospect Capital Corporation (NASDAQ: PSEC) is expected to post quarterly earnings at $0.21 per share on revenue of $172.09 million.

Q4 2017 Earnings Release

11:00 am ET

along with a CC

[Scotttrader80]

with the X date being Tuesday some cheap shares will be available the remainder of the week

[Scotttrader80]

watch out for the know it all boneheads

[blue finch]

I did extremely well on Psec
Buying
Collecting dividends
Then selling for fat profits

Did this a few times in the past 8 years

[leftovers]

So I am watching for an entry point. If the news is not a horrendous as this spike down, there is a trade coming up.

I think you're on to something Captain!

[conix]

This haircut is starting looking like a skinhead's.

I bet the CC will divulge the huge dividend cut and Book Value "revaluation".

But all dead cats bounce. So I am watching for an entry point. If the news is not a horrendous as this spike down, there is a trade coming up.

IMO

[leftovers]

based on the 13% scalping this took in the last 4 trading days I'll bet everyone is chomping at the bit to hear this conference call news!

Something tells the hair cut is still in progress.

[bar1080]

Note that REITs aren't mREITs which are very dangerous. The former directly invests in real estate while the latter places highly leveraged bets on mortgage securities.

The saving grace of BDCs has been their lack of leverage, although allowable BDC leverage has increased lately which may make them riskier.

[bar1080]

REITs have been excellent but ONLY if you held. Many things beat "The Average Investor" who trades his brains out following hunches, whims and silly charts. It's certainly possible to lose even with REITs.

Note the limitations of that old chart. #1 Ranked "Energy" has gone thru an awful spell lately.

Sad thing is most investors improve... when they die and stop flipping stocks.

[Sone]

I own mostly REITs so I'm good !! Lol

[bar1080]

Ugly reality of the average investor. So with BDCs like PSEC most people buy near the top and sell at the bottom which produces result shown on this chart. Frequent traders do even worse!

[Sone]

True if it's compounded

[bar1080]

That's not counting the sizable dividends. Few investors understand that the Dow and S&P 500 numbers, as usually presented, don't include the dividends.

[Sone]

120% in 14 years is horrible lmao

[bar1080]

PSEC down 50%; S&P 500 up 120% since 2004. You pay a huge price for fat divs. Also a single BDC can go out of business in tough times while a S&P 500 portfolio won't.

Ultra high yield stocks are sucker bets. Investors forget those that fail over the years especially during The Great Recession.

There's a reason that great investors like Buffett never buy these.

[bar1080]

Moderate yield (1%-3%) quality stocks far outperform Reach-For-Yield gimmicks in the long run. That's especially true in bear markets when many such firms shut down. Also investors tend to buy these at the top and sell at the bottom compounding the poor results.

Another SA article on PSEC https://seekingalpha.com/article/4099687-prospect-capital-dividend-cut-20-percent-30-percent

[Sone]

Damn SA needs to be investigated

[leftovers]

if it helps you're not alone! going to take many months of divs to get back to square one! Ouch brutal day today...

[wooferwax]

well, I guess my buy at 8.15 was another brilliant move to securing more financial freedom.

[manfromjax]

I guess I they must send that letter out alphabetly by last name. I just got mine today..... way after most other. They need to do it via email. Being the last to know of potential bad new only leave some holding the bag.

[idiotinvestor0]

Following up on my previous post and references made to it in ensuing ones, all with helpful comments and info:
I just received a call from PSEC (I had left a message on Barry's voice mail). Naturally, no comment on whether they are on course towards the analysts' earnings consensus (.20), but no explanation about possible causes of the price drop either. The letter seems available in paper mail format only, it seems generated by a good office printer. And they do send it out quarterly, I simply hadn't received it till now. The most worrisome statement I found in it is "Our twelve month return for the fiscal year just ended will not easily be repeated in any year." (verbatim). As I remarked to my caller, this is not the kind of message to send out about any company, but especially one that is under pressure for any reason, whether or not expectations are going to be met. With mere weeks to go to the next ER, I got worried; but I am sure others panicked, that is the only explanation I am left with, since the caller didn't provide others. All the worse case scenarios described in the posts following mine seem feasible, I am hoping the one about price drop is grossly pessimistic, and I am staying put hoping for recovery: my entry point is closer to the 52 weeks high, so if I sold now, it would be a matter of just what kind of loss I would incur. Since the fundamentals seem in order, I am biting the bullet (and swelling my liver). Unfortunately, somebody's observation that similar stocks have been affected by market conditions and imponderables, seems optimistic: a similar stock I have been watching, BRG, is up more than 3% today, for no apparent specific reason, while PSEC toed the NASDAQ.
Concerning insiders’ sell offs (though the letter states “We are committed to the long term and never sold a single share”), which I suspected immediately, I am re-thinking the quandary: they are public information that must be filed with the SEC; even options (which in my message I remarked they must be putting) are not made out of thin air, the shares must come from somewhere. If they were insiders’, form 4’s would have to be filed (though I am sure there are workarounds) within 48 hours of transactions.

[pearsby09]

I have been out of this stock for a couple of years and am dropping in to see how well this stock is doing in 2017. I remember two of the reasons for owning in 2015, was management and divi of 12 plus percent. I used to see consistent insider buying which boded well for my confidence in the performance of the stock. Question to board. Has there been continued insider buying in 2017? TIA and sorry for compulsive lack of DD...just a quick question...again..TIA

[blackcat]

This is an SA article on PSEC so take it FWIW, but there are some valid points in it.

https://seekingalpha.com/article/4098469-prospect-capital-time-jump-breach?auth_param=mugs1:1cp0rfo:ac310c1977be30a7a63ad2fb32ed9ad5&dr=1&uprof=44&utoken=72d301804c6ed17f2a89c79d1c664fa6#alt2

[blackcat]

Maybe so. They send this rah-rah letter out every qtr. I glance through it to see if they mention any upcoming caveats, but that seems not to happen. Price is still quite a bit above my basis, but if it drops more, I'd consider adding. I don't know what the sell-off relates to. it could always be inside information on an upcoming divi cut or it could have just been a seller who wanted out for other reasons. I've sold out of a stock when I thought there was a better opportunity elsewhere. Most of us have. The current political situation is putting pressure on BDC-type stocks also. "Flight to safety" seems to be the name of the game right now.

[racman]

Thanks for the head up. I have been in and out of this stock for a couple years. Ride the ups and downs most of the time with occasional dividend income. Looking interesting at this price... maybe lower

[blackcat]

Fair question- I don't see it posted anywhere, so I am thinking that it's just snail mail. I am signed up with my brokerage to get everything by email- and this shows up in my actual home mailbox.

[racman]

The letter you all are talking about.... is that in e format somewhere, or just by snail mail?
Thanks in advance.

[racman]

True. Think about a combination of a earnings miss with a dividend cut. That will drive the PPS down hard..... mid $6's or lower possibly.

[blackcat]

Earliest would be October payout for September.

[racman]

A dividend cut definitely crossed my mind!!

[Mattylite]

I'm wondering if there is anticipation of a dividend cut in the near futute?

[blackcat]

Not sure why this one would cause such a ruckus though. They send one every qtr.

[idiotinvestor0]

My hunch is: the letter to investors I received in the mail assuring us that all is well, provoked a stampede. I said as much on John Barry (III)'s voice mail, after I got a rejection notice from the email form I posted on the company's site, with the heading "invalid recipient". I am not sure that helps either, especially collated to a mailing ending with "As always, we welcome your commentary and questions", offering no way to provide them (it took a bit of research to find the phone number, which is listed in SEC filings. Nor did the frequency with which I receive such mailings help: NEVER. in the decade I have been active in financial markets, I had never received such a letter from a company I was invested in. A company perceived as struggling, such as this one is perceived by some analysts, must have left readers terrified. Panic ensued. I am holding on to my considerable number of shares, but I was worried as soon as I read the letter. And I am left with a bad feeling, that I am hoping I will get rid of as I see the share price recover...

[racman]

Anybody have a clue as to the big drops the last two days? Or is PPS just following the markets? Earnings not out till 8/29....

[oxnous]

What is the discount to NAV now.

[blackcat]

That's about right from my POV.