Business development companies (BDCs) have been hit hard in the past two years due to worries about rising rates and a slowing economy. Gregg Abella, portfolio manager at Investment Partners Asset Management, said the turn is at hand for the small business lending vehicles. 'I like them for their forward yield, their discount to net asset value (NAV) and I’m a fan of them because they trade at a low multiple of their earnings,' said Abella. 'It’s an out-of-favor sector with a lot of unloved companies and as a value guy that appeals to me.' Abella is bullish on Prospect Capital (PSEC) which last traded at $7, a nearly 30% discount to its NAV of $9.65. The shares, which yield over 14%, are down over 20% in the past year, but have bounced back 30% since reporting better than expected net investment income a share earlier his month.
More from Video
Amid the Selling, Here's the Big Question Now
How quickly do we find support, is what we'll want to know now, as the correction is occurring while economic optimism builds.
One Tweet Pulls the Rug Out From Under the Indexes
Despite the president's promise of no stimulus until after Nov. 3, there are no signs yet that this is the sort of correlated selling that leads to a deep correction.
A Technical Look at the New Dow Jones Industrial Average
Salesforce, Amgen and Honeywell will give a lift to the DJIA going forward.
Conagra Brands Looks Tastier After Its Upgrade to Buy
CAG has hung onto the bulk of its recent gains, and could rise to the $50 area, according to the charts and indicators.
Biogen Bulls Get a Lift From Quant Upgrade and Strengthening Charts
Breaking down an approach to the long side of this biotech stock.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.