Buy Prospect Capital Corporation (PSEC)   2 comments

Sometimes, markets overreact to silly things. For example, they hear “SEC investigation”, and a stock drops like a watermelon off the Empire State Building. However, sometimes the SEC is just telling a company, “You need to restate your financials to include your holding companies.” No fines, no courtrooms, nothing ominous (unless the restated financials are bad).

Such is the case with Prospect Capital Corporation (PSEC). From everything I have read, even if the SEC wins this battle (PSEC is appealing the SEC’s finding), PSEC will not be revealing anything Enron-esque, nor will it have a negative impact on PSEC’s dividend, which will yield about 13% this year (slightly above their 5 year average). With PSEC selling below book value now (book is $10.68, and today’s price is in the $9.90’s), now is the time to strike.

As for their business, the main thing to remember is “business development company”. They do just about every type of financing possible for small to mid-sized businesses.

I will be adding PSEC to my 401k, as I would like to keep it for quite awhile.

UPDATE: PSEC was added to my 401k at $9.96.

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Posted May 15, 2014 by edmcgon in 401(k), Portfolio, Portfolio Moves

2 responses to “Buy Prospect Capital Corporation (PSEC)

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  1. Interesting buy Ed.

  2. Nice ed! I have owned it for years and just doubled up at about $10.15. Not happy about further drop but very happy to collect my monthly dividend. Now have Ed seal of approval for good luck.

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