BDCs are the Stars of Specialty Finance Stocks: a Wall Street Transcript Interview with Mike Turner, Senior Vice President and Research Analyst for Commercial Finance at Compass Point Research & Trading

RELATED QUOTES

SymbolPriceChange
KCAP4.17-0.02
CSWC14.73-0.08
EQS1.740.00
MFIN4.88-0.10

67 WALL STREET, New York - December 17, 2012 - The Wall Street Transcript has just published its Business Development Companies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Decreased Bank Loan Competition - Low Corporate Credit Default Rate - Consistent BDC Dividend Yield - Stronger Middle Market Loan Origination - BDC Risk/Reward Profile - Private Middle Market Funding

Companies include: Ares Capital (ARCC), PennantPark Investment Corporation (PNNT), and many others.

In the following excerpt from the Business Development Companies Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How are BDCs doing right now?

Mr. Turner: Right now, it is a good environment to be in for a BDC. Compared to other financials, they are under a lot less competition. The regulatory environment is unchanged for them, credit quality is strong, and lending conditions are historically favorable as far as new lending yields are concerned. So overall, it's a good time to be a lender, and I think a good time to be an investor in this space.

TWST: You mentioned there is less competition right now. Why is that?

Mr. Turner: I would say there is less competition for BDCs compared to banks, but maybe not when you are comparing BDCs to other BDCs. You have the same amount of BDCs as you have had historically, although there are a few smaller ones that have popped up recently. But relative to banks, where everybody is fighting over a smaller amount of loans and having to compete on price and structure, the competition in the BDC space has generally been unchanged.

TWST: You also said it's a good time to be an investor in BDCs. What makes a BDC a good investment?

Mr. Turner: I'd say first, when I look at financials, or really any potential investment, I look at what's my required return as an investor and what's the ROE that these businesses can produce. I think broadly the BDCs can generate double-digit ROEs right now. They're trading on average at book value or at NAV. In that scenario, I'm buying something at NAV, and I'm effectively going to earn a double-digit ROE in the process.

When I look at banks and other financials, I think it's harder to say that. For example, several banks are trading at significant premiums to book and can barely generate 8% or 9% ROEs. So from that standpoint, I think you're buying BDCs at attractive valuations, the dividends are secure, and the fundamentals of the business are improving. If we look at all that and we don't see any major red flags...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Oil prices fall as Saudi Arabia dampens prospects of output freeze
    Oil prices fall as Saudi Arabia dampens prospects of output freeze Reuters - 5 minutes ago

    Oil fell on Friday and was set for its largest weekly decline in a month after the Saudi energy minister watered down expectations that the world's largest producers might agree next month to limit their output. Brent crude oil futures were down 32 … More »

  • No impact from Brexit on Norway gas exports to Britain - minister Reuters - 15 minutes ago

    Exports of Norwegian gas to Britain will not be affected by Britain's vote to leave the European Union, Norway's oil and energy minister told Reuters. The Nordic country is Britain's top foreign gas supplier, accounting for some 40 percent of all … More »

  • Takata shortlists Daicel, KKR, Ningbo, others in rescue search - sources
    Takata shortlists Daicel, KKR, Ningbo, others in rescue search - sources Reuters - 18 minutes ago

    Takata Corp has shortlisted six or seven companies, including a competitor and private-equity funds, as potential financial investors to bail out the Japanese car-parts maker, people involved in the process said. Japanese chemical maker Daicel … More »

  • Markets under pressure before Yellen
    Markets under pressure before Yellen AFP News - 21 minutes ago

    European stock markets mainly fell on Friday, as investors waited on a speech from Federal Reserve chief Janet Yellen for clues over the outlook for US interest rates. Frankfurt and Paris held in negative territory, while Asian stocks wobbled ahead … More »

  • Hong Kong rules US short seller Left engaged in misconduct Associated Press - 22 minutes ago

    U.S. short-seller Andrew Left engaged in market misconduct by publishing false or misleading information about a Chinese property developer, a Hong Kong tribunal ruled Friday. The city's Market Misconduct ... … More »

  • New Stada CEO promises fresh start under activist glare
    New Stada CEO promises fresh start under activist glare Reuters - 25 minutes ago

    The new chief executive of German generic drugmaker Stada, under pressure from activist investors to reform its governance and replace board members, promised a more modern, dynamic approach to running the company. Matthias Wiedenfels, who stepped … More »

  • German economy set fair on growth path despite Brexit risk
    German economy set fair on growth path despite Brexit risk Reuters - 28 minutes ago

    Germany's domestic economy is set fair for further growth, with robust household and government spending propelling a self-reinforcing cycle of activity, though Britain's Brexit vote has unnerved German companies trading abroad. … More »

  • Brewer AB Inbev to cut thousands of jobs in takeover deal
    Brewer AB Inbev to cut thousands of jobs in takeover deal Associated Press - 36 minutes ago

    The world's largest brewer, AB Inbev, expects to cut about 3 percent of its total workforce — equivalent to thousands of jobs — once it completes its huge takeover of its closest rival, SABMiller. The ... … More »

  • Stock markets cautious ahead of key Fed speech
    Stock markets cautious ahead of key Fed speech Associated Press - 37 minutes ago

    Stock markets were mostly lower Friday as investors awaited a speech by U.S. Federal Reserve Chairwoman Janet Yellen later in the day for cues on the timing of the next interest rate hike. KEEPING SCORE: ... … More »

  • Equities set two-week low before Yellen speech, dollar dips
    Equities set two-week low before Yellen speech, dollar dips Reuters - 56 minutes ago

    Global shares slipped to a two-week low and the dollar edged down on Friday as investors turned cautious before a keynote speech by Federal Reserve Chair Janet Yellen that could map out a clearer path for U.S. interest rates. Investors were wary of … More »

  • Monte dei Paschi chairman says talks of CEO replacement are groundless Reuters - 1 hour 0 minutes ago

    The chief executive of Banca Monte dei Paschi di Siena Fabrizio Viola has the full backing of the lender's chairman and reports he will be replaced are groundless, the bank's chairman said on Friday. A report by Il Giornale daily cited financial … More »

  • 11 Turkish police killed in bombing blamed on PKK
    11 Turkish police killed in bombing blamed on PKK AFP News - 1 hour 4 minutes ago

    Eleven Turkish police officers were killed and 78 people injured Friday in a suicide truck bombing by suspected Kurdish rebels, three days into a two-pronged Turkish offensive against jihadists and Kurdish militia in neighbouring Syria. The early … More »

  • Singapore’s Air Quality Remains Unhealthy as Haze Worsens (2) Bloomberg - 1 hour 14 minutes ago

    The haze, caused by forest and land fires in Riau, is being carried by wind toward Singapore, said Sutopo Purwo Nugroho, a spokesman at Indonesia’s National Disaster Mitigation Authority which reported 67 hotspots. Fire hotspots have appeared over … More »

  • Agricultural Bank Plans to Raise $12 Billion Over Three Years Bloomberg - 1 hour 14 minutes ago

    The bank needs to strengthen its capital buffers, President Zhao Huan told reporters in Beijing on Friday, adding that the lender aims to maintain a stable dividend payout. The announcement came after the bank eked out a 0.5 percent increase in … More »

  • British economy escapes Brexit blow, for now
    British economy escapes Brexit blow, for now Reuters - 1 hour 21 minutes ago

    Britain's high streets are heaving with shoppers despite June's shock vote to leave the European Union, big companies have reported few signs of distress and some tabloid newspapers are even talking about a post-Brexit economic boom. The … More »

  • Germany's Merkel in Poland for talks on EU future, migrants
    Germany's Merkel in Poland for talks on EU future, migrants Associated Press - 1 hour 23 minutes ago

    German Chancellor Angela Merkel is in Warsaw for talks with the leaders of four central European nations about migrants and the future of the European Union after Britain leaves. Merkel is meeting the ... … More »

  • Japan PM in Kenya to launch summit on African development
    Japan PM in Kenya to launch summit on African development Associated Press - 1 hour 25 minutes ago

    Japanese Prime Minister Shinzo Abe has arrived in Kenya to launch the Tokyo International Summit on African Development which 35 heads of state are expected to attend. Abe was welcomed Friday by Kenyan ... … More »

  • Hong Kong Tribunal Says Citron’s Left Culpable of Misconduct (2) Bloomberg - 1 hour 30 minutes ago

    The Market Misconduct Tribunal of Hong Kong said Friday that information in the Citron note was “false and/or misleading as to material facts or through omission of material facts,” and that as such Left was either “reckless” or “negligent” in … More »

  • Deals of the day- Mergers and acquisitions Reuters - 1 hour 34 minutes ago

    Aug 26 (Reuters) - The following bids, mergers, acquisitions and disposals were reported by 1015 GMT on Friday: ** Asset manager Blackstone Group LP will invest about $1.5 billion in the oil-rich Permian ... … More »

  • SE Asia Stocks-Wary before Fed Chair Yellen's speech; Vietnam up Reuters - 1 hour 47 minutes ago

    By Krishna V Kurup Aug 26 (Reuters) - Most Southeast Asian stock markets trod cautiously on Friday as investors waited for signals on the future trajectory of U.S. interest rates from Federal Reserve Chair ... … More »

  • Malaysian fast food operator QSR Brands plans $400 mln IPO -IFR Reuters - 1 hour 48 minutes ago

    KUALA LUMPUR, Aug 26 (Reuters) - Malaysia's largest fast food operator QSR Brands plans to relist on the local stock market next year through an initial public offering (IPO) worth over $400 million, IFR ... … More »

  • UBS trimming headcount in Paris by 15 jobs - source
    UBS trimming headcount in Paris by 15 jobs - source Reuters - 1 hour 50 minutes ago

    Swiss bank UBS is cutting about 15 investment banking jobs as it scales back its share-trading business in Paris, a source familiar with the bank's plans said. The cuts under negotiation are on its share-trading platform and at its corporate centre … More »

  • Kerry, Lavrov meet on Syria conflict
    Kerry, Lavrov meet on Syria conflict AFP News - 2 hours 1 minute ago

    US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov met in Geneva on Friday for an expected push towards resuming peace talks for war-ravaged Syria. The pair sat down in a luxury hotel on the shores of Lake Geneva, launching … More »

  • Try chargeback request to get refunds, aviation commission tells Rayani Air's customers New Straits Times - 2 hours 3 minutes ago

    KUALA LUMPUR: The Malaysian Aviation Commission (Mavcom) has advised Rayani Air’s customers who have purchased tickets using credit or debit card to initiate a chargeback request in order to recover their monies. The commission in a statement said … More »

  • AB InBev expects to cut 3 percent of jobs after SABMiller takeover Reuters - 2 hours 13 minutes ago

    Anheuser-Busch InBev (ABI.BR) expects to cut some 3 percent of its combined workforce after it has acquired rival SABMiller (SAB.L), according to takeover documents published on Friday. AB InBev is aiming to achieve pre-tax savings of at least $1.4 … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.129+0.001+0.78%
    N21.SI
    1.855-0.040-2.11%
    MC0.SI
    2.84+0.02+0.71%
    C52.SI
    4.22-0.05-1.17%
    Z74.SI
    0.58-0.01-1.69%
    5TP.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.29+0.08+38.10%
    5VI.SI
    0.36+0.07+22.03%
    BPF.SI
    0.192+0.030+18.52%
    AYD.SI
    0.27+0.04+17.39%
    BLU.SI
    0.40+0.05+14.29%
    BFK.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.205-0.055-21.15%
    BTJ.SI
    0.34-0.06-15.00%
    BCD.SI
    0.39-0.06-13.33%
    AYB.SI
    0.31-0.04-11.43%
    5VP.SI
    0.24-0.02-9.43%
    BAZ.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3523-0.0007-0.05%
    USDSGD=X
    1.5269+0.0002+0.01%
    EURSGD=X
    1.7858+0.0015+0.08%
    GBPSGD=X
    74.2240-0.021-0.03%
    SGDJPY=X
    5.7335+0.0053+0.09%
    SGDHKD=X
    2.9705+0.0065+0.22%
    SGDMYR=X
    9,765.7412-52.8438-0.54%
    SGDIDR=X
    4.9329+0.0126+0.26%
    SGDCNY=X
    1.0329+0.0023+0.22%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,330.30+5.70+0.43%
    GCZ16.CMX
    18.67+0.18+0.95%
    SIU16.CMX
    96.51+1.17+1.23%
    ^XAU
    2.08+0.01+0.39%
    HGU16.CMX
    47.16-0.17-0.36%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.16+0.01
    ^FVX
    1.58+0.02
    ^TNX
    2.26+0.02
    ^TYX