J Studios Co-authored by Treading Softly What's your favorite flavor of ice cream? What's your favorite food? Do you have a favorite car brand? Maybe a favorite brand for the sneakers you like to buy, or the jeans you prefer? Perhaps you have a favorite electrician or auto body shop? It's natural to develop a tendency towards having preferences because you have previously had positive experiences, or societal pressure encourages you to believe certain things are superior to others. Investors often have pref ...

Abstract Aerial Art Ares Capital (NASDAQ:ARCC) reported better than expected results for the second fiscal quarter at the end of July and the business development company continues to see good balance sheet quality as well as a dividend that is well-supported by net investment income. Shares sold off this week, on fears over a recession, but Ares Capital's results for Q2'24 were solid in more ways than just one. New investments boomed, and I believe, from a fundamental point of view, that Ares Capital i ...

8vFanI Rising interest rates have been a boon for business development companies such as Hercules Capital (NYSE:HTGC) since Q2 '22, given that their investments are mainly at floating rates, whereas the majority of their borrowings are usually at fixed rates. To note: 97.4% of HTGC's debt investments were at floating rates, as of 6/30/24. With the market currently thinking that the Fed will start dropping rates at its September meeting, it could be an about face for BDCs. HTGC's management reckons that a 50 ...

Net profit, also referred to as the bottom line, is one of the key tools determining the financial health of an enterprise. The metric demonstrates a company’s ability to convert per-dollar sales into profits.A low profit margin indicates higher risks, implying that a revenue drop might dampen profits, thus pushing a company into the red. Belden Inc. (BDC) , EZCORP, Inc. (EZPW) , The Gorman-Rupp Company (GRC) and Cantaloupe, Inc. (CTLP) , however, boast solid net profit margins.Net Profit Margin = Net profi ...

Core Insights - The article emphasizes the importance of simplifying investment strategies and understanding the fundamentals of specific sectors, particularly Business Development Companies (BDCs) [2][3] Group 1: Understanding BDCs - BDCs are not solely dependent on rising interest rates; they can thrive in various economic conditions by actively managing their portfolios and generating returns from portfolio realizations [3][4] - BDCs typically serve smaller or distressed firms that cannot access traditional bank loans, often lending at rates like SOFR + 6 or 7%, which remains effective even in low-rate environments [4] Group 2: Investment Opportunities - TriplePoint Venture Group (TPVG) is highlighted as a BDC that stands to benefit from lower interest rates, with significant investments in equity and warrants across multiple companies [4] - The VanEck BDC Income ETF (BIZD) offers diversified exposure to 26 public BDCs, yielding 11.3%, with the top five BDCs representing approximately 53% of its assets, indicating stability and resilience [6][8] Group 3: Historical Performance - A $10,000 investment in BIZD since 2015 would have generated $7,651 in total dividends, reflecting an annualized yield of 8.5% [7] - BIZD has consistently delivered growing dividends through varying interest rate conditions since its IPO in 2013, demonstrating effective portfolio management [8] Group 4: Strategic Importance of BDCs - BDCs provide essential liquidity to the economy by supporting companies overlooked by traditional banks, often securing their investments with access to borrowers' intellectual property and critical assets [9] - Maintaining exposure to BDCs can enhance portfolio performance, particularly for retirement planning, by providing a reliable income stream [9]

8vFanIRising interest rates have helped business development companies greatly over the past 1.5 years. Golub Capital BDC (NASDAQ:GBDC) reported strong earnings for its fiscal 2023, (period ending 9/30/23), with 55.5% revenue growth and 49% NII growth, with NII/Share rising ~48%. Earnings have remained strong in the two most recent quarters, (fiscal Q1-Q2, period ending 3/31/24), albeit not quite as spectacular as fiscal 2023, with revenue up 16%, NII up 29%, and NII/share up 30%. In addition, NAV/share ...

Melpomenem/iStock via Getty Images Introduction If you're an income-oriented investor and you currently don't own Ares Capital (NASDAQ:ARCC), then their recent quarter should convince you otherwise. The BDC has a long track record and in my opinion, is a must-own for income investors because of it. I do have some quarrels with the company, which I'll touch on later in the article. I also discuss why if you're looking to buy, I would wait for a potential pullback before doing so. Additionally, I touch on ...

thomas-bethge Welcome to another installment of our BDC Market Weekly Review, where we discuss market activity in the Business Development Company ("BDC") sector from both the bottom-up - highlighting individual news and events - as well as the top-down - providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving the market or that investors ought to be mindful of. This update covers the period through the fourth week of Jul ...

Pakin Jarerndee I have been covering Oaktree Specialty Lending (NASDAQ:OCSL) since early January this year, with the previous article issued right after the publication of OCSL's Q2 2024 earnings report. Starting from my initial thesis, the total return performance has been negative ~ 14%, while the overall BDC market has continued to advance. In the previous article I explained the key aspects that have pushed down the Stock price (e.g., build-up of non-accruals and spread compression), but, at the sam ...

Shares of Belden (BDC) have been strong performers lately, with the stock up 8.9% over the past month. The stock hit a new 52-week high of $102.47 in the previous session. Belden has gained 30.1% since the start of the year compared to the 5.8% move for the Zacks Industrial Products sector and the -3% return for the Zacks Wire and Cable Products industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any ...