Scott's Latest Trade
Quick review for members. Yesterday, we posted the weekly article on mREITs and BDCs. It included in a note about a trade Scott was considering.
He foreshadowed selling one position and opening another:
Note: I’m providing the sale to all readers. Leaving the purchase restricted to our full members for now. This is a new position for Scott, so it will be added to the disclosures. That means our free followers can still spot the new position in next week’s weekly update.
Performance
Following through on the extremely explicit foreshadowing, Scott closed out his FSK position today at a weighted average price of $20.49 per share. That’s very similar to Friday’s closing price.
Scott purchased shares on 12/10/2021 (very small), 12/14/2021 (still small), and 6/22/2022 (medium). The medium comes in at about 2/3rds of the total position.
The weighted average period is about 20 months.
Total returns ranged from about 21% to about 30%, with a weighted average of 27.7%.
Of course, the last 20 months haven’t been a particularly easy time for income investors to deliver outperformance.
Rating
FSK was right around the middle of the “appropriately valued” range (slightly above the middle). His new position had a more attractive valuation. Not a larger discount to book value, but a more attractive price relative to our targets.
The Purchase
As Scott foreshadowed, the purchase was: