USA - ADX: Big 8% Yield Big Discount To NAV (Tender Offer)

2024-07-16 07:30:00 ET

Summary

• The Adams Diversified Equity Fund just increased its annual distribution yield to 8%, plus it trades at a large discount to NAV (attractive).
• It also just initiated a tender offer (at 98% of NAV) designed to increase shareholder value (and it's been working--and we expect the fund to continue to outperform through year-end).
• We review the fund (i.e. price discount, initiatives to enhance shareholder value, interest from activist investor Saba Capital and more), and then conclude with our strong opinion on investing.

We’ve been pounding the table on the Adams Diversified Equity Fund ( ADX ) for over a month now, and as you can see in the chart below, things have been going well. Specifically, the discount to NAV on this attractive closed-end fund (“CEF”) has narrowed (thanks to a recent tender offer and distribution hike). And we think there is more room for ADX to outperform the market through year-end. In this report, we review the fund, the price discount (versus NAV), the initiatives to enhance shareholder value (especially in light of activist investor Saba Capital’s interest), and our strong opinion on who might want to invest....

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