American Capital: Surging NAV With More Upside Potential
Strangely, the stock market continues to allow a company to repurchase stock at a substantial discount to net asset value (NAV). American Capital, Ltd (ACAS)has completed a 52M share repurchase program for nearly $500M over the last 6 quarters at an average discount to a continuously soaring NAV of nearly 40%. The stock though continues to trade at a substantial discount even after having the ability to spend that much cash.
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 $18.6 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $117 billion of total assets under management (including levered assets).
The question remains why investors allow the stock to trade at the dramatic discount to the assets of the company. Especially considering signs exist that the company conservatively reports NAV.
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