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AINV is trading at a PE of under 6 |
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and trading below book value. |
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Released on Monday, October 10, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - Apollo Investment Corporation ( NADSAQ:AINV) is a subordinated debt investment company. Subordinated debt is that debt which falls after all other debts should a company default. This makes it a very high-risk asset, and likewise this a very high-risk company has over 57% of the investment firm’s portfolio is invested in these subordinated debts and another 32% are hedged with senior secured debt—secured instruments in which an asset is used as collateral to secure the debt which also has seniority status over other secured instruments in a firms debt portfolio.
But with great risk comes the possibility of great returns as well. Apollo has a forward P/E of about 7.95 and a current intraday P/E of 5.67, so the stock price could be expected to rise in the future. Also the stock is trading at $7.47 per share (5:26 PM EDT, October 7th, 2011) far under its $9.76 per share book value.
Most striking of all, the company has a large profit and operating margin at 71% and 68% respectively. What’s better is they tend to share a portion of this return with their investors, holding a return on equity of 14% and a 5-year average dividend yield of 14 % as well—outstanding returns on a relatively low priced stock.
As far as technicals are concerned, AINV has 5-, 15-, and 80-day supports of $7.10 a share, so its not likely that the stock will reach lower than that. On the other hand, a $7.98 per share 5-day resistance, $8.59 per share 15-day resistance, and finally a whopping $10.60 per share 80-day resistance. This also puts the stock at the lower end of its 52- week range of $6.80 per share to $12.46 per share—so it could go up—way up. Other technicals give little to chew on in their indication on the stock’s movement.
But even in such a risky position on these subordinate debts, Apollo has some sense of financial stability. The company has a current ratio of 1.41, so it would be able to cover any on coming demands on immediate debts that it may hold. with a market cap. of around $1.5 billion and a beta volatility of 1.8, the company is a nice mid-cap. investment opportunity for those of you looking at beefing up your growth portfolio.
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