12.7% Yield, Strong Liquidity, 13% Discount, CEO Just Bought $1 Million In Shares

How do you assess risk? Different investors have different approaches, and when a Black Swan event topples the market, risk assessment becomes very important. In the broad Q1 2020 selloff, business development corporations, i.e. BDCs, were pummeled. This company yields 12.72% - management already declared the June regular and special dividends. Shares are trading at a 13% discount to net asset value. Its investments are only 50% loan-to-value, mostly first-lien senior debt. The company's CEO bought nearly $1 million worth of shares on May 7.

Owl Rock Capital Corp. (ORCC) has fared better than the benchmark UBS ETRACS Linked to the Wells Fargo Business Development Company ETN (BDCS) and the Financial Select Sector SPDR Fund (XLF) over the past month, quarter, and year to date, but, it's still down by -31.6% in 2020, and trails the market significantly. We rate ORCC a long-term buy based on its strong liquidity, good access to capital, attractive yield, and discount to NAV.

Source: Seeking Alpha

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