Investors Snag FSC 10.2% Cheaper Than Its Secondary Stock Offering

Posted: Dec 23 2013, 9:16am CST | by , in News


Looking back to 95 days ago, Fifth Street Finance Corporation (NASD: FSC) priced a 15,000,000 share secondary stock offering at $10.31 per share. Buyers in that offering made a considerable investment into the company, expecting that their investment would go up over the course of time. In trading on Monday, bargain hunters could buy shares of FSC and achieve a cost basis 10.2% cheaper than those buyers, with shares changing hands as low as $9.26 per share. It should be noted that investors at the secondary have collected $0.24/share in dividends since the time of their purchase, so they are currently down 7.9% on their purchase from a total return basis.

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Secondaries can often present buying opportunities for bullish investors interested in purchasing shares, because the sudden extra supply of stock tends to require that the offering be priced at an attractive discount to where the stock had previously been trading before the offering announcement. At last check, Fifth Street Finance Corporation shares are currently trading up about 0.3% on the day. The chart below shows the one year performance of FSC shares, versus its 200 day moving average:

Looking at the chart above, FSC’s low point in its 52 week range is $8.94 per share, with $11.13 as the 52 week high point — that compares with a last trade of $9.28.

The current annualized dividend paid by Fifth Street Finance Corporation is $0.9996/share, currently paid in monthly installments, and its most recent dividend has an upcoming ex-date of 01/13/2014. Below is a long-term dividend history chart for FSC, which can be of good help in judging whether the most recent dividend with approx. 10.8% annualized yield is likely to continue.

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FSC makes up 4.18% of the BDC Income ETF (AMEX: BIZD)

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Source: Forbes

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