From Seeking Alpha - Oaktree Specialty Lending (OCSL): Q4 GAAP NII of $0.12 in-line. Total investment income of $34.51M (-9.7% Y/Y) misses by $1.66M.
From Yahoo Finance
Earnings Estimate | Current Qtr. (Sep 2019) | Next Qtr. (Dec 2019) | Current Year (2019) | Next Year (2020) |
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No. of Analysts | 7 | 8 | 8 | 8 |
Avg. Estimate | 0.12 | 0.12 | 0.48 | 0.50 |
Low Estimate | 0.11 | 0.11 | 0.48 | 0.46 |
High Estimate | 0.12 | 0.13 | 0.49 | 0.54 |
Year Ago EPS | 0.12 | 0.12 | 0.43 | 0.48 |
Revenue Estimate | Current Qtr. (Sep 2019) | Next Qtr. (Dec 2019) | Current Year (2019) | Next Year (2020) |
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No. of Analysts | 6 | 6 | 6 | 6 |
Avg. Estimate | 35.97M | 36.92M | 149.24M | 151.94M |
Low Estimate | 34.74M | 34.83M | 147.93M | 144.39M |
High Estimate | 38.33M | 40.15M | 152.00M | 170.00M |
Year Ago Sales | 38.22M | N/A | 138.72M | 149.24M |
Sales Growth (year/est) | -5.90% | N/A | 7.60% | 1.80% |
At this point in time - the numbers I see on non-accruals are hard to believe. That would logically influence the numbers on realized and unrealized gains. So take those numbers with a few grains of salt.
OCSL | Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Realized & Unrealized Gains | -2.304 | 3.551 | 46.776 | 10.401 | 16.300 | 9.822 | 4.069 | -43.763 | -136.933 | -25.447 | -9.703 | -97.452 | -55.170 | -34.324 | -26.666 | -89.468 | -34.699 | -12.118 | -3.836 |
Realized & Unrealized Gains/share | -0.0163 | 0.0252 | 0.3318 | 0.0738 | 0.1156 | 0.0697 | 0.0289 | -$0.3105 | -$0.9714 | -$0.1805 | -$0.0688 | -$0.6822 | -$0.3814 | -$0.2360 | -$0.1698 | -$0.5661 | -$0.2163 | -$0.0752 | -$0.0238 |
In 13 out of the last 19 quarters, Realized and Unrealized Gains have been negative. All but one of the negative quarters came when the stock was Fifth Street Capital.
OCSL | Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Total investment income | 34.513 | 36.669 | 38.244 | 38.276 | 38.220 | 31.847 | 34.779 | 33.876 | 35.732 | 44.917 | 45.555 | 51.760 | 59.160 | 64.026 | 59.563 | 65.122 | 63.770 | 70.199 | 68.150 |
Net investment income | 16.275 | 16.608 | 17.709 | 17.317 | 17.031 | 14.430 | 15.263 | 13.322 | 11.464 | 19.390 | 18.504 | 23.294 | 25.695 | 29.106 | 25.343 | 26.582 | 28.159 | 32.490 | 29.469 |
Investments @ fair value | 1.438 | 1.455 | 1.505 | 1.465 | 1.491 | 1.521 | 1.401 | 1.415 | 1.542 | 1.791 | 1.789 | 1.952 | 2.165 | 2.247 | 2.255 | 2.326 | 2.402 | 2.335 | 2.538 |
Wt Av Share Count | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 140.961 | 142.853 | 144.649 | 145.569 | 156.997 | 158.053 | 160.430 | 161.131 | 161.130 |
TII/share | $0.2448 | $0.2601 | $0.2713 | $0.2715 | $0.2711 | $0.2259 | $0.2467 | $0.2403 | $0.2535 | $0.3186 | $0.3232 | $0.3623 | $0.4090 | $0.4398 | $0.3794 | $0.4120 | $0.3975 | $0.4357 | $0.4229 |
NII/share | $0.1155 | $0.1178 | $0.1256 | $0.1228 | $0.1208 | $0.1024 | $0.1083 | $0.0945 | $0.0813 | $0.1376 | $0.1312 | $0.1631 | $0.1776 | $0.1999 | $0.1614 | $0.1682 | $0.1755 | $0.2016 | $0.1829 |
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Div/share | $0.0950 | $0.0950 | $0.0950 | $0.0950 | $0.0950 | $0.0950 | $0.0850 | $0.1250 | $0.1250 | $0.0200 | $0.1400 | $0.1800 | $0.1800 | $0.1800 | $0.1800 | $0.1800 | $0.1800 | $0.1800 | $0.1800 |
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Fees Waived | 841 | 634 | 7,901 | 1,564 | -292 | 1,548 | -48 |
Fees Waived/sh | 0.0060 | 0.0045 | 0.0560 | 0.0111 | -0.0021 | 0.0110 | -0.0003 |
NAV/share | $6.60 | $6.60 | $6.55 | $6.19 | $6.09 | $5.95 | $5.87 | $5.81 | $6.16 | $7.17 | $7.23 | $7.31 | $7.97 | $8.15 | $8.33 | $8.41 | $9.00 | $9.13 | $9.18 |
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Wt Av Yield | 8.2% | 8.2% | 8.3% | 8.0% | 8.4% | 8.8% | 9.3% | 9.0% | 9.6% | 10.3% | 10.4% | 10.3% | 10.4% | 10.6% | 10.3% | 10.9% | 10.8% | 10.9% | 10.7% |
NII/TII Ratio | 47.2% | 45.3% | 46.3% | 45.2% | 44.6% | 45.3% | 43.9% | 39.3% | 32.1% | 43.2% | 40.6% | 45.0% | 43.4% | 45.5% | 42.5% | 40.8% | 44.2% | 46.3% | 43.2% |
Port.co.Leverage | 5.0x | 5.0x | 4.8x | 4.9x | 4.8x | 4.8x | 4.7x | 5.1x | 5.5x |
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Mid Mkt Leverage | 5.4x | 5.6x | 5.4x | 5.6x | 5.7x | 5.1x | 5.5x | 5.5x | 5.7x |
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Oil & Gas/Port |
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Non-Accrual Dollars FV |
| 86.796 | 85.854 | 132.355 | 98.760 | 67.131 | 30.866 | 41.457 | 67.015 |
| 85.725 | 129.568 | 120.584 | 15.543 | 82.836 | 100.041 | 45.745 | 33.927 | 50.968 |
Non-Accrual % @ FV | 0.21% | 6.39% | 6.12% | 9.6% | 7.0% | 4.6% | 2.4% | 3.2% | 4.7% | 5.6% | 5.38% | 7.31% | 6.11% | 0.76% | 3.95% | 4.58% | 2.03% | 1.54% | 2.14% |
Non-Accrual Dollars Cost |
| 135.908 | 158,542 | 209.064 | 233.005 | 207.501 | 200.229 | 213.520 | 210.437 |
| 190.141 | 358.003 | 214.816 | 106.408 | 205.927 | 216.773 | 115.273 | 80.257 | 97.198 |
Non-Accrual % @ Cost | 3.36% | 9.56% | 10.61% | 14.2% | 14.5% | 12.3% | 12.8% | 14.5% | 13.5% | 11.3% | 11.24% | 18.19% | 10.20% | 4.81% | 9.06% | 9.21% | % | 3.55% | 3.98% |
Great NII/share trend since it has been Oaktree. Great NAV trend since it has been Oaktree. Terrible trends before it was Oaktree.
OCSL | Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Debt | 473.367 | 537.278 | 741.509 | 607.141 | 637,211 | 607.082 | 600.537 | 623.087 | 675.366 | 897.159 | 887.578 | 1,070.599 | 1,140.181 | 1,222.365 | 1,166.269 | 1,051.340 | 1,198.797 | 1,087.493 | 1,284.730 |
Debt/share | 3.3581 | 3.8115 | 5.2604 | 4.3072 | 4.5205 | 4.3067 | 4.2603 | 4.4203 | 4.7912 | 6.3646 | 6.2966 | 7.4944 | 7.8824 | 8.3972 | 7.4286 | 6.6518 | 7.4724 | 6.7491 | 7.9733 |
Debt/share to NAV | 50.88% | 57.75% | 80.31% | 69.58% | 74.23% | 72.38% | 72.58% | 76.08% | 77.78% | 88.77% | 87.09% | 102.52% | 98.90% | 103.03% | 89.18% | 79.09% | 83.03% | 73.92% | 86.85% |
Interest expense | 6.960 | 7.592 | 8.970 | 8.904 | 9.323 | 8.291 | 8.530 | 9.584 | 12.772 | 11.262 | 12.712 | 13.189 | 13.587 | 13.149 | 13.838 | 14.047 | 13.659 | 14.191 | 14.812 |
Interest expense/share | 0.0494 | 0.0539 | 0.0636 | 0.0632 | 0.0661 | 0.0588 | 0.0605 | 0.0680 | 0.0906 | 0.0799 | 0.0902 | 0.0923 | 0.0939 | 0.0903 | 0.0881 | 0.0889 | 0.0851 | 0.0881 | 0.0919 |
Interest expense/TII | 20.17% | 20.70% | 23.45% | 23.26% | 24.39% | 26.03% | 24.53% | 28.29% | 35.74% | 25.07% | 27.90% | 25.48% | 22.97% | 20.54% | 23.23% | 21.57% | 21.42% | 20.21% | 21.73% |
Annualized Int exp/Debt | 5.88% | 5.65% | 4.84% | 5.87% | 5.85% | 5.46% | 5.68% | 6.15% | 7.56% | 5.12% | 5.73% | 4.93% | 4.77% | 4.30% | 4.75% | 5.34% | 4.56% | 5.22% | 4.61% |
PWAY - Int exp/Debt | 232 bps | 255 bps | 346 bps | 213 bps | 255 bps | 334 bps | 362 bps | 285 bps | 204 bps | 518 bps | 467 bps | 537 bps | 563 bps | 630 bps | 555 bps | 556 bps | 624 bps | 568 bps | 609 bps |
Oaktree took over this stock when it had a ton of problems - and part of those problems were higher cost debt. Note how the amount of debt has dramatically fallen. OCSL is significantly over earning the dividend - and that usually results in dividend growth. (Theory) It strongly appears that Oaktree wants to rid itself of high priced debt before it increases the dividend. Long-term, that is a very good thing. But short term - who knows. OCSL may have a bunch of stock holders looking at that high-ish NII and dividend coverage and purchased their shares thinking dividend growth is near. Those investors could loose their patience - shrinking the current price.
The TII or revenue drop is probably due to redeploying funds into debt repayment. So falling TII is a choice - not a sign of a problem. (end of theory)
OCSL has $75 million of 6.875% unsecured notes due 2024 that trade as OSCLE, and $86.3 million in 6.125% unsecured notes due 2028 that trade as OCSLL. OCSL began the last fiscal year with $228.825 million of 4.875% Notes due 2019. Due to the "Due Dates", Oaktree had to pay off the lowest expensive debt first.