Top Forestry Stocks To Buy Right Now


 

By Moe Zulfiqar

Leverage, at its very core, is borrowing money to invest. If investors want to use leverage in their portfolio, it can be very risky. My friend, Mr. Speculator, who I met not too long ago, disagrees with this claim; he thinks it’s the greatest invention: “With leverage, your gains can be huge and your portfolio grows much faster,” he said.

As usual, Mr. Speculator isn’t very clear about a very important concept of investment management.


While Mr. Speculator is in favor of taking leverage, I tend to be very cautious about it. At the end of the day, it’s all dependent on the investor and if they want to take on leverage or not.

Top Forestry Stocks To Buy Right Now: Team Inc.(TISI)

Team, Inc. provides specialty maintenance and construction services for maintaining high temperature and high pressure piping systems and vessels that are utilized in heavy industries. It offers inspection and assessment services, such as inspection and evaluation of piping, piping components, and equipment; field heat treating services, including electric resistance and gas-fired combustion; leak repair services comprising on-stream repairs of leaks in pipes, valves, flanges, and other parts of piping systems and related equipment; and fugitive volatile organic chemical emission leak detection services consisting of identification, monitoring, data management, and reporting. The company also provides hot tapping services, such as hot tapping, Line-stop, and Freeze-stop services; field machining services, including the use of portable machining equipment to repair or modify machinery, equipment, vessels, and piping systems, as well as flange facing, pipe cutting, line bori ng, journal turning, drilling, and milling services; and technical bolting services comprising the use of hydraulic or pneumatic equipment with bolt tightening techniques for leak-free connections, plant maintenance, and expansion projects, as well as bolt disassembly and hot bolting services. In addition, it offers field valve repair services consisting of on-site repairs to manual and control valves, and pressure and safety relief valves, as well as specialty valve actuator diagnostics and repair. The company markets its services to companies in a various heavy industries, which include the petrochemical, refining, power, pipeline, steel, pulp and paper, and shipbuilding industries, as well as to municipalities, original equipment manufacturers, distributors, and engineering and construction firms. It operates in the United States, Canada, Europe, and internationally. The company was founded in 1973 and is headquartered in Alvin, Texas.


Advisors’ Opinion:

  • [By Laura Brodbeck]

    Earnings Releases Expected: A. Schulman, Inc. (NASDAQ: SHLM), Team, Inc. (NYSE: TISI), ZEP Inc. (NYSE: ZEP)

    Economic Releases Expected: Japanese current account, US consumer credit, Chilean trade balance, Swiss CPI, Spanish industrial production, German industrial production

  • [By Seth Jayson]

    When judging a company’s prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it’s booking in the accounting fantasy world we call “earnings.” This is one of the first metrics I check when I’m hunting for the market’s best stocks. Today, we’ll see how it applies to Team (NYSE: TISI  ) .

Top Forestry Stocks To Buy Right Now: Plexus Corp.(PLXS)


Plexus Corp., together with its subsidiaries, provides electronic manufacturing services to original equipment manufacturers and other technology companies. The company offers product development and design services, including program management, feasibility studies, product conceptualization, specification development, circuit design, field programmable gate array design, printed circuit board layout, embedded software design, mechanical design, development of test specifications, and product verification testing. It also provides value-added services, such as engineering change-order management, cost reduction redesign, component obsolescence management, product feature expansion, test enhancement, and component re-sourcing. In addition, the company offers prototyping and new product introduction services comprising assembly of prototype products, materials management, analysis of the manufacturability and testability of a design, test implementation, and pilot productio n. Further, it provides test equipment development; material sourcing and procurement; agile manufacturing; fulfillment and logistic; after-market support; and regulatory requirements services. The company serves the wireline/networking, wireless infrastructure, medical, industrial/commercial, and defense/security/aerospace markets in the United States, Malaysia, China, the United Kingdom, Mexico, and Romania. Plexus Corp. was founded in 1979 and is headquartered in Neenah, Wisconsin.


Advisors’ Opinion:

  • [By Jake L’Ecuyer]

    Equities Trading UP
    Plexus (NASDAQ: PLXS) shares shot up 6.98 percent to $42.09 after the company reported its Q2 earnings of $0.60 per share on revenue of $557.60 million. The company also issued a strong Q3 outlook.

  • [By Seth Jayson]

    Plexus (Nasdaq: PLXS  ) reported earnings on July 17. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended June 29 (Q3), Plexus beat slightly on revenues and beat expectations on earnings per share.

  • [By Evan Niu, CFA]

    What: Shares of Plexus (NASDAQ: PLXS  ) have jumped today by as much as 13% after the company reported earnings results.

    So what: Revenue in the fiscal third quarter totaled $571.9 million, well ahead of the Street consensus of $565 million. Earnings per share were $0.68, similarly topping expectations of just $0.58 per share. CEO Dean Foate said the strong results were driven by the networking and communications as well as the health care and life sciences sectors.

Top Forestry Stocks To Buy Right Now: CA Inc.(CA)

CA Technologies, together with its subsidiaries, designs, develops, markets, delivers, licenses, and supports information technology (IT) management software products that operate on a range of hardware platforms and operating systems. It offers enterprise IT management software for organizations that addresses components of the computing environment, including people, information, processes, systems, networks, applications, and databases. The company provides a portfolio of mainframe and distributed software products with a focus on mainframe, service assurance, security (identity and access management), project and portfolio management, service management, virtualization and service automation, and cloud computing. It serves banks, insurance companies, other financial services providers, government agencies, manufacturers, technology companies, retailers, educational organizations, and health care institutions worldwide. CA Technologies offers its solutions through its d irect sales force and indirectly through global systems integrators, technology partners, managed service providers, solution providers, distributors and volume partners, and exclusive representatives. The company was formerly known as CA, Inc. and changed its name to CA Technologies in May 2010. CA Technologies was founded in 1974 and is based in Islandia, New York.


Advisors’ Opinion:

  • [By Patricio Kehoe]

    CA Technologies (CA) is an enterprise information technology (IT) management software and solutions company. The company’s products are designed to operate in a range of IT environments, from mainframe and physical to virtual and cloud. The company has three operating segments: Mainframe Solutions, Enterprise Solutions and Services.

  • [By Traders Reserve]

    CA Technologies (CA) is involved in a rapidly growing and necessary part of IT. It’s called Data Center Infrastructure Management or DCIM. All you really need to know about it from an investors’ point-of-view is its staggering market potential. Fewer than 10% of mid- to large-sized data centers utilize it, and 451 Research says DCIM supplier revenue will reach $1.8 billion by 2016, representing a 44% compound annual growth rate. While migrating away from mainframe services, the DCIM provider is also focusing on growing its cloud market share.

  • [By Jonathan Buck]

    IT management software and solutions provider CA Inc. (CA) can continue its resurgence with a focus on innovation.

    Early signs are encouraging. The company, formerly known as Computer Associates, is highly profitable. Its problem is a steady decline in revenue that has persisted for seven straight quarters.

    “If you take a look over the last several years, we lost our innovation edge,” Chief Executive Mike Gregoire said in an interview on the sidelines of the World Economic Forum in Davos. “And over the last year that is the No. 1 thing that I have been trying to put in place. You can structure deals and use financial engineering to a certain extent, package more things together and show growth, but at the end of the day you have to build great software that is highly differentiated and (that) people want.”


    Since joining CA a year ago, Gregoire has been trying to sharpen CA’s blunted edge. He has closed fragmented engineering shops, opened an R&D center in Silicon Valley and is trying to get ahead of the technology curve to deliver the products that customers will want in two years’ time.

    “This innovation is not something you do some of the time, you have to do it all of the time,” Gregoire said.

    “We are on a treadmill,” he added. “We have to keep the products that we currently have innovative and differentiated, and we have to be looking to what the market needs over time to make sure we are highly relevant in the largest markets.”


    He sees huge potential from mainframe applications to distributed applications to the cloud. CA, which competes with the likes of Oracle (ORCL) and International Business Machines (IBM), will have customers on all three platforms, which will need to be managed, and applications and security closely monitored. “There is lots of room for us to innovate,” said Gregoire. He has cut 1,200 jobs, and is looking to revitalize sales and marketing, too.

    CA, ba

  • [By Monica Gerson]

    CA Technologies (NASDAQ: CA) is expected to post its Q3 earnings at $0.71 per share on revenue of $1.13 billion.


    Xilinx (NASDAQ: XLNX) is estimated to post its Q3 earnings at $0.54 per share on revenue of $600.61 million.

Top Forestry Stocks To Buy Right Now: Xerox Corporation(XRX)

Xerox Corporation provides business process and information technology (IT) outsourcing, and document management services worldwide. Its business process outsourcing services include human resources services; finance and accounting services; healthcare payers and pharma; customer management solutions; healthcare provider solutions; technology-based transactional services for retail, travel, and non-healthcare insurance companies; programs for federal, state, county, and town governments; transportation solutions; and government healthcare solutions. The company is involved in designing, developing, and delivering IT solutions, such as comprehensive systems support, systems administration, database administration, systems monitoring, batch processing, data backup, and capacity planning services; telecommunications management services; and desktop services. Its document outsourcing services comprise managed print services that optimize, rationalize, and manage the operation of Xerox and non-Xerox print devices; and communication and marketing services that deliver design, communication, marketing, logistic, and distribution services through SMS, Web, email, and mobile, as well as print media. The company also manufactures and sells products, including desktop monochrome, color and compact printers, multifunction printers, copiers, digital printing presses, and light production devices for small/mid-size businesses and large enterprises. In addition, it sells paper, wide-format systems, network integration solutions, and electronic presentation systems. The company sells its products and solutions through its sales force, as well as through a network of independent agents, dealers, value-added resellers, systems integrators, and the Web. Xerox Corporation was founded in 1906 and is headquartered in Norwalk, Connecticut.


Advisors’ Opinion:

  • [By Monica Gerson]

    Xerox (NYSE: XRX) dropped 2.96% to $11.13 after the company reported its Q1 earnings of $0.27 per share on revenue of $5.12 billion and lowered its FY14 earnings outlook.

  • [By Steven Russolillo]

    In the past, such a move could’ve had a much bigger impact on the stock price, even though a split doesn’t fundamentally change anything about a company or its valuation. As WSJ’s Jason Zweig previously wrote, Xerox(XRX) shares jumped 10% on Jan. 25, 1999, when the company said it would split two-for-one. The next day, eBay(EBAY) went one better with a 3-for-1 announcement that sent its stock up 37.4%.

Top Forestry Stocks To Buy Right Now: Hess Corporation (HES)


Hess Corporation, together with its subsidiaries, operates as an independent energy company worldwide. It operates in two segments, Exploration and Production (E&P), and Marketing and Refining (M&R). The E&P segment explores for, develops, produces, purchases, transports, and sells crude oil and natural gas. This segment conducts exploration and production activities principally in Algeria, Australia, Azerbaijan, Brunei, China, Denmark, Egypt, Equatorial Guinea, France, Ghana, Indonesia, the Kurdistan region of Iraq, Libya, Malaysia, Norway, Peru, the Russian Federation, Thailand, the United Kingdom, and the United States. The M&R segment purchases, markets, and trades in refined petroleum products, natural gas, and electricity. This segment serves motoring public, wholesale distributors, industrial and commercial users, other petroleum companies, governmental agencies, and public utilities. It also operates terminals and retail gasoline stations, which include convenience stores located on the East Coast of the United States. As of December 31, 2012, the company operated 1,361 HESS gasoline stations in New York, New Jersey, Pennsylvania, Florida, Massachusetts, North Carolina, and South Carolina. Hess Corporation was founded in 1920 and is headquartered in New York, New York.


Advisors’ Opinion:

  • [By Wallace Witkowski]

    Energy-services companies reporting this week include National Oilwell Varco Inc. (NOV)  and Ensco PLC (ESV) . Other energy earnings this week include ConocoPhillips (COP) , Valero Energy Corp. (VLO) , Hess Corp. (HES) , Phillips 66 (PSX) , and Marathon Petroleum Corp. (MRO)  

  • [By Monica Wolfe]

    Hess (HES)

    Manning & Napier’s second largest holding is in Hess Corp where the fund holds on to 9,529,403 shares of the company’s stock. This position makes up for 3.3% of the fund’s total portfolio and 2.78% of the company’s shares outstanding. During the first quarter Manning & Napier cut their position in Hess -14.04% by selling a total of 1,556,257 shares. They sold these shares in the first quarter price range of $73.92 to $83.96, with an estimated average quarterly price of $79.40. Since then the price per share has increased approximately 10.8%. Manning & Napier’s historical holding history:

Top Forestry Stocks To Buy Right Now: Baxter International Inc. (BAX)


Baxter International Inc., through its subsidiaries, develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. It operates in three segments: BioScience, Medication Delivery, and Renal. The BioScience segment processes recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders; plasma-based therapies to treat immune deficiencies, alpha 1-antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions; products for regenerative medicine, such as biosurgery products; and vaccines. The Medication Delivery segment manufactures intravenous solutions and administration sets; premixed drugs and drug-reconstitution systems; pre-filled vials and syringes for injectable drugs; intravenous nutrition products; infusion pumps; and inhalation anesthetics. It also offers products and services related to pha rmacy compounding, drug formulation, and packaging technologies. The Renal segment provides products to treat end-stage renal disease or irreversible kidney failure. It manufactures solutions and other products for peritoneal dialysis, a home-based therapy; and distributes product for hemodialysis, which is conducted in a hospital or clinic. It markets its products to hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors? offices, clinical and medical research laboratories, and patients at home under physician supervision. The company was founded in 1931 and is based in Deerfield, Illinois.


Advisors’ Opinion:

  • [By Holly LaFon]

    Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. As stated in the current prospectus, the Fund’s Investor Class Share’s annual operating expense ratio (gross) is 1.28%. The Fund’s adviser has contractually agreed to waive a portion of its fee and/or reimburse Fund expenses to limit total annual operating expenses at 1.25%, which is in effect until October 31, 2015. Other share classes may vary. The Fund charges a 2.0% redemption fee on shares redeemed within six months of purchase. For the most recent month-end performance, please call (877)328-9437 or visit the Advisor’s website at www.auxierasset.com. The recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future.Spring 2014 Market CommentaryAuxier Focus Fund’s Investor Class returned a modest 0.25% for the quarter ended March 31, while Standard and Poor’s 500 Stock Index (S&P) rose 1.81%. The Fund ended the quarter with 70% in U.S. stocks, 16% foreign stocks, 1.7 % bonds and 12.3% cash. Since inception in 1999, the Fund’s equity exposure has averaged 72%. Our stockholdings in the healthcare industry generally gained for the quarter. But many of our multinational and foreign stocks were hurt by the threat of currency repercussions from geopolitical events in Russia and Ukraine. The foreign portion of the Fund is easily the most undervalued. Longer term, we see a very favorable risk/reward potential with our UK and European holdings. Some emerging market companies we follow are the cheapest in over twenty years. In allocating capital, we much prefer the gloom of down to flat markets and the corrective process that tempers exuberance. We re member that one of th

  • [By Monica Gerson]

    Baxter International (NYSE: BAX) is expected to report its Q1 earnings at $1.09 per share on revenue of $3.88 billion.

    The Sherwin-Williams Company (NYSE: SHW) is projected to report its Q1 earnings at $1.11 per share on revenue of $2.36 billion.

  • [By John Kell and Lauren Pollock var popups = dojo.query(“.socialByline .popC”); ]

    Baxter International Inc.(BAX) said it plans to create separate, independent health-care companies, one focused on developing and marketing biopharmaceuticals and the other on medical products. Shares climbed 11% to $77.90 premarket.

Top Forestry Stocks To Buy Right Now: Pactera Technology International Ltd (PACT)


Pactera Technology International Ltd. (Pactera), formerly HiSoft Technology International Limited, incorporated on May 27, 2004, provides global consulting and technology services. The Company provides business/information technology (IT) consulting, solutions, and outsourcing services to a range of multinational firms through a globally integrated network of onsite and offsite delivery locations in China, the United States, Europe, Australia, Japan, Singapore and Malaysia. In January 2014, Pactera Technology International Ltd announced the acquisition of Innoveo Solutions AG.


The Company’s services include business and technology advisory, enterprise application services, business intelligence, application development and maintenance, mobility, cloud computing, infrastructure management, software product engineering and globalization, and business process outsourcing. The Company’s clients include 3M, ABB, Cathay Pacific, China Merchants Bank, Citibank, E MC, Expedia, GE, HP, IBM, Lenovo, Microsoft, Mitsubishi, NEC and TIBCO.

Advisors’ Opinion:

  • [By Seth Jayson]

    Pactera Technology International (Nasdaq: PACT  ) reported earnings on May 23. Here are the numbers you need to know.


    The 10-second takeaway
    For the quarter ended March 31 (Q1), Pactera Technology International missed estimates on revenues and met expectations on earnings per share.

  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market’s best stocks, it’s worth checking up on your companies’ free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That’s what we do with this series. Today, we’re checking in on Pactera Technology International (Nasdaq: PACT  ) , whose recent revenue and earnings are plotted below.

Top Forestry Stocks To Buy Right Now: China XD Plastics Company Ltd (CXDC)


China XD Plastics Company Limited (China XD), incorporated on November 16, 1999, is a specialty chemical companies engaged in the research, development, manufacture and sale of modified plastics primarily for automotive applications in China. Through its wholly owned subsidiary, Harbin Xinda Macromolecule Material Co., Ltd. (Harbin Xinda), the Company manufactures and sells modified plastics, primarily for use in the fabrication of automobiles parts and components. China XD develops its products using its technology through its wholly owned research laboratory, Harbin Xinda Macromolecule Material Research Center Co., Ltd. (Xinda Macromolecule Research Center). Xinda Macromolecule Research Center is a macromolecular material research and development institution. On March 31, 2011, Harbin Xinda established a wholly owned subsidiary, Harbin Xinda Macromolecule Material Testing Technical Co., Ltd. (Testing Technical), to develop a testing laboratory and provide testing service s of macromolecule materials, engineering plastics and other products.


The Company’s modified plastics are used by its customers to fabricate the auto components, such as exteriors (automobile bumpers, rearview and sideview mirrors, license plate parts), interiors (door panels, dashboard, steering wheel, glove compartment and safety belt components), and functional components (air conditioner casing, heating and ventilation casing, engine covers, and air ducts). The Company’s specialized plastics are utilized in more than 23 automobile brands manufactured in China, including brands, such as AUDI, BMW, Toyota, Buick, Mazda, Volkswagen, Cherry, Geely, and Hafei new energy vehicles. The Company operates three manufacturing bases in Harbin, Heilongjiang in the People’s Republic of China (PRC). As of December 31, 2011, the Company had approximately 165,000 metric tons of annual production capacity across 38 automatic production lines utilizing German twin-screw extru ding systems, automatic weighing systems and Taiwan conveyer! systems. In December 2011, the Company launched its third production base in Harbin, which has 90,000 metric tons of annual production capacity across 20 new production lines installed in two completed factories.


The Company’s products are organized into seven categories, based on their physical characteristics: Modified PP, Modified ABS, Modified PA, Engineering Plastics, Alloy Plastic, Environmentally friendly plastics and Modified Plastic for Special Engineering. Modified PP includes brands, such as COMPNIPER, COMPWIPER and COMPGOPER. COMPNIPER products are primarily used for the interior parts, such as inner panels, instrument panels and box lids. COMPWIPER products are primarily used for external parts, such as the front and back bumpers and mudguards. COMPGOPER products are used for functional components, such as the unit heater shells and air conditioner shells. Modified ABS includes the MOALLOLY brand, which is used in functional components, such as h eat dissipating grids and wheel covers. Modified PA’s brand is POLGPAMR, which is used in parts requiring high flame and heat resistance.


The Company’s Engineering Plastics product group includes the MOAMIOLY brand, which is used in engine hoods, intake manifold and bearings. BRBSPCL is Alloy Plastic’s brand, which is used in rearview mirrors, grilles, automotive electronics and other components. Products can also be used in computers, plasma televisions and mobile phones. POLGBSMR is the brand under the Company’s Environmentally friendly plastics product group. Modified Plastic for Special Engineering’s brand is PEEK, which is used in communications and transport, electronics and electrical appliances, machinery, medical and analytical equipment.


The Company competes with Guangzhou Kingfa Science & Technology Co., Ltd. and Shanghai Pret Composites Co., Ltd.

Advisors’ Opinion:

  • [By Lisa Levin]

    China XD Plastics Company (NASDAQ: CXDC) shares rose 6.34% to touch a new 52-week high of $8.39 after the company reported its Q1 earnings of $0.34 per share.

  • [By Monica Gerson]

    China XD Plastics Company (NASDAQ: CXDC) shares gained 4.17% to touch a new 52-week high of $6.01. China XD Plastics’ trailing-twelve-month revenue is $1.05 billion.

Top Forestry Stocks To Buy Right Now: Fifth Street Finance Corp (FSC)


Fifth Street Finance Corp. is a specialty finance company that lends to and invests in small and mid-sized companies in connection with investments by private equity sponsors. The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments and capital appreciation from its equity investments. As of September 30, 2011, 90.9% of its portfolio consisted of debt investments that were secured by first or second priority liens on the assets of its portfolio companies. As of September 30, 2011, it held equity investments consisting of common stock, preferred stock or other equity interests in 27 out of 65 portfolio companies. It is managed and advised by Fifth Street Management LLC. In June 2013, Fifth Street Finance Corp. announced that it has closed its portfolio company acquisition of Healthcare Finance Group, LLC (HFG).


Investments

The Company tailors the terms of its debt invest ments to the facts and circumstances of the transaction and prospective portfolio company. As of September 30, 2011, it directly originated a majority of its debt investments. It is focusing its origination efforts on first lien, second lien and subordinated loans. Its first lien loans have terms of four to six years, provide for a variable or fixed interest rate, contain prepayment penalties and are secured by a first priority security interest in all existing and future assets of the borrower. Its first lien loans may take many forms, including revolving lines of credit, term loans and acquisition lines of credit. Its second lien loans have terms of four to six years, provide for a fixed interest rate, contain prepayment penalties and are secured by a second priority security interest in all existing and future assets of the borrower. Its second lien loans often include payment-in-kind (PIK), interest, which represents contractual interest accrued and added to the principa l that generally becomes due at maturity. Its unsecured inve! stments have terms of five to six years and provide for a fixed interest rate. It may make unsecured investments on a stand-alone basis, or in connection with a senior secured loan, a junior secured loan or a one-stop financing. Its unsecured investments may include payment-in-kind (PIK), interest, which represents contractual interest accrued and added to the principal that becomes due at maturity, and an equity component, such as warrants to purchase common stock in the portfolio company.


In addition, the Company from time to time non-control, equity co-investments in connection with private equity sponsors. It structures equity investments, such as direct equity co-investments, to provide the Company with minority rights provisions and event-driven put rights. The Company make investments in the private equity funds of certain of its equity sponsors. It makes these investments where it has a long term relationship and is comfortable with the sponsor’s busin ess model and investment strategy. As of September 30, 2011, it had investments in six private equity funds, which represented less than 1% of the fair value of its assets as of such date.

Portfolio Management

As a business development company, the Company offers managerial assistance to its portfolio companies and to provide it if requested. It monitors the financial trends of each portfolio company to assess the appropriate course of action for each company and to evaluate overall portfolio quality. It has several methods of evaluating and monitoring the performance of its investments, which includes review of monthly and quarterly financial statements and financial projections for portfolio companies; periodic and regular contact with portfolio company management; attendance at board meetings; periodic formal update interviews with portfolio company management, and assessment of business development, including product development, profitability a nd the portfolio company’s overall adherence to its busine! ss plan.

In addition to various risk management and monitoring tools, the Company uses an investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in itd portfolio. It uses a five-level numeric rating scale. In the event that it determines that an investment is underperforming, or circumstances suggest that the risk associated with a particular investment has significantly increased, it monitors the effected portfolio company.

Valuation of Portfolio Investments

As a business development company, the Company invests in illiquid securities, including debt and equity investments of small and mid-sized companies. The Company perform valuations of its debt and equity investments on an individual basis, using market, income, and bond yield approaches as appropriate. Under the market approach, it estimates the enterprise value of the portfolio companies, in which it invests. To estimate th e enterprise value of a portfolio company, it analyze various factors, including the portfolio company’s historical and projected financial results. It requires portfolio companies to provide annual audited and quarterly and monthly unaudited financial statements, as well as annual projections for the upcoming fiscal year.

Under the income approach, the Company prepares and analyze discounted cash flow models based on projections of the future free cash flows of the business. Under the bond yield approach, it uses bond yield models to determine the present value of the future cash flow streams of its debt investments. It reviews various sources of transactional data, including private mergers and acquisitions involving debt investments with similar characteristics, and assess the information in the valuation process.

Advisors’ Opinion:

  • [By Bryan Perry] Popular Posts: Trade of the Day: Groupon (GRPN)Lloyds (LYG): A Sweet Stock Across the PondDoes Fifth Street Finance (FSC) Deserve a Spot in Your Portfolio? Recent Posts: Does Fifth Street Finance (FSC) Deserve a Spot in Your Portfolio? Trade of the Day: Groupon (GRPN) Trade of the Day: U.S. Steel (X) View All Posts

    If you’re holding Fifth Street Finance (FSC), criticism that it’s not covering its dividend with net investment income and is not projected to do so in 2014 might have you second-guessing its place in your lineup.

  • [By Eric Volkman]

    Fifth Street Finance (NASDAQ: FSC  ) is about to expand its capital base. The company has launched a fresh issue of 13.5 million shares of its common stock in an underwritten public offering. It also intends to grant its underwriters a purchase option for an additional 2.025 million shares.