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Is Full Circle Capital (FULL) presenting itself as a buy?

I hold Full Circle Capital (FULL) shares in my portfolio. As I learned today, this company belongs to a business development companies category or BDC. These companies are investing into small businesses and many of them are regulated investment companies RICs. That means that this type of companies are required to pay at least 90% of their profit back to their investors. Due to the nature of their business these companies are very cyclical and sensitive to economic situation of the country.

Sometimes ago I purchased FULL and now I am holding 128 shares of this company. What I like is that this company pays nice dividends (12% yield) and it pays monthly. However, I wasn’t sure how to evaluate such company to decide whether it is worth buying, holding or selling it.

Recently I found a great article on Seeking Alpha which helped me to understand this stock better and evaluate it better. What I have read convinced me to continue holding this stock amid the recent turbulent trading, which scared me a bit.


As you can see, the recent drop in price was scary and I couldn’t find the reason for such sell off. Was this sell off a good opportunity to buy or should I dump the stock? After reading about the stock, that its book value is around $8.5 and the stock is trading at lower $7 level I realized that this can be actually a good opportunity to buy more shares.

What happened and why the stock dropped? I think the reason could be the recent public offering of new shares which were offered at $7.50 per share. The stock immediately corrected to that price.

Will this drop have a motion momentum and continue falling? If so, I will be adding another 100 shares of this stock into my portfolio. Thus I placed a trigger order (or contingency order) to buy if the stock falls at $7.00 per share or below.

Another reason for buying more shares is that today John E. Stuart a CEO of the company purchased 2,000 shares of the company, see here.

If the stock doesn’t drop at $7 a share or below I will not be buying.

Happy Trading!

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