Ares Capital: High Yield But Challenging Outlook (Archive)
High yield BDC facing sector headwinds, rising leverage, dilution risks, and likely underperformance.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Ares Capital is a very popular pick among many investors on Seeking Alpha due to its very high yields. But operational headwinds prevent me from being a bull:
- BDC sector dynamics are deteriorating.
- Leverage management is leading to equity dilution.
- Technical analysis also suggests a subdued outlook and negative alpha potential vs the S&P 500.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
Comments ()