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4-Star Stocks Poised to Pop: American Capital

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, private equity firm American Capital (Nasdaq: ACAS  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at American Capital's business and see what CAPS investors are saying about the stock right now.

American Capital facts

Headquarters (founded) Bethesda, Md. (1986)
Market Cap $3.6 billion
Industry Asset management
Trailing-12-Month Revenue $602.0 million
Management Founder/Chairman/CEO Malon Wilkus
CFO John Erickson
Return on Equity (average, past 3 years) 27.1%
Cash/Debt $316.6 million / $988.0 million
Competitors Ares Capital
Fortress Investment Group LLC
MCG Capital

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 2,054 of the members who have rated American Capital believe the stock will outperform the S&P 500 going forward.

A couple of months ago, one of those Fools, All-Star jwray01, tapped American Capital as an attractive bargain opportunity:

[V]ery low P/B and P/E. They invest in corporate debt on a leveraged basis. They also manage [American Capital Agency] and [American Capital Mortgage] and manage some private equity funds and collect management fees from that. They also have a huge tax loss carryover.

They got burned really badly during the 2008 liquidity crisis and ever since then it's been trading at a major discount to book value. Too low, [in my opinion].

If you want market-topping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, American Capital may not be your top choice.

If that's the case, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2012, at 10:59 AM, zlot wrote:

    I was just going to sell out at $12.00, righting the wrongs of the 2008 bust - I would break even, and then some, but, along with the sentiment of this article, and, maybe even more strongly, QE forever, I think I'd better stick with it for at least another year and see what happens. I'll undoubtedly kick myself when this market corrects, but, then, isn't that always the way of it?

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Related Tickers

10/21/2016 4:00 PM
ACAS $16.98 Up +0.03 +0.18%
American Capital CAPS Rating: ***