Monday, January 7, 2013

American Capital: The Buyback That Keeps Giving

The market remains so uninterested in buybacks that a company can continuously buy its own stock at a substantial discount to net asset value [NAV]. American Capital, Ltd (ACAS) is a prime example, having recently completed an 8.8M share buyback in Q4 that will again help boost the NAV.

The company bought the stock at an average price of $11.72, for a total cost of $103M. In the previous quarter, substantial purchases below book value added $0.23 to NAV. The NAV stood at $17.39 prior to the quarter's start, so it undoubtedly added to that value.

American Capital is a private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. American Capital manages $17.2 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $101 billion of total assets under management (including levered assets).

Read the full article at Seeking Alpha.


Disclosure: Long ACAS. Please review the disclaimer page for more details. 



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