"Patient yet opportunistic investors" is how Apollo Investment's
For the quarter, Apollo reported a bottom-line loss of $0.21. This was driven by $148 million worth of mark-to-market losses on investments, but offset to some extent by $81 million of realized gains during the quarter. Looking solely at investment income -- and backing out the extra management incentive fees that were paid thanks to the realized gains in the quarter -- the company earned $0.40 per share, just shy of the $0.41 that Wall Street was expecting.
The unrealized losses on the portfolio also drove a dip in the net asset value (NAV) at the end of the quarter. The NAV finished the quarter at $17.71, versus $18.44 last quarter and $17.87 at the end of the last fiscal year in March.
While they certainly don't remove the sting of the drop in NAV, troubles have been cascading through the market as a whole; a broad swath of financial players from Citigroup
With all the turmoil of late, the balance of power has tipped in the direction of those -- like Apollo -- that still have access to capital and are able to pick up marked-down assets. On the conference call, the Apollo team sounded very optimistic about the potential to find some great deals in this market.
On the valuation side, at $14.65, Apollo is now trading at around 17% below its NAV, and its $0.52 quarterly dividend works out to a 14%-plus yield. While this shows investors' expectation that Apollo will end up marking down its portfolio further and/or cutting its dividend, it could also be a nice entry point for those who think the investors at Apollo are savvy enough to deliver on their "patient yet opportunistic" promise.
Further financial Foolishness:
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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants ...