2024-03-13 13:35:32 ET
Summary
- While Oaktree Specialty Lending started the year strong, it has underperformed the BDC average on a YTD basis.
- The underperformance stems from a negative earnings surprise that is mostly linked to growing non-accruals.
- Yet, if we zoom out and consider the portfolio dynamics, we will notice a solid picture of healthy fundamentals that have just become cheaper due to notable share price correction.
- In this article, I dissect the most recent quarterly figures and explain why I think that the BDC is still an enticing buy.
Earlier this year, I issued an article on Oaktree Specialty Lending ( OCSL ), where I reconfirmed my buy stance on this BDC. In the Q3'23 figures and even looking back since the start of 2023, OCSL managed to successfully bring down debt, while preserving NAV and increasing exposure to first lien. As a result, we had a de-risked BDC with defensive characteristics stemming from the diversification and portfolio allocation into relatively durable and already cash flowing businesses....
Read the full article on Seeking Alpha
For further details see:
Oaktree Specialty Lending: Time To Capitalize On The Market's Overreaction