2024-07-16 07:30:00 ET
Summary
- Inflation cooled on an annualized basis, further emphasizing we could see potential rate cuts this year.
- The BDC sector will likely to see pullback once rates are cut, making Trinity Capital a good addition to an income portfolio.
- Trinity Capital showed continued growth, strong financials, and dividend safety amid potential interest rate decline.
- Their floating rate exposure of 75.4% is significantly lower than peers like Blackstone Secured Lending's 98.8% and Hercules Capital's 97.3%.
- As a result of this, I think Trinity Capital will see less of a pullback than some peers, but further upside is limited as sentiment shifts in the coming months.
Introduction
With the recent CPI report showing inflation cooling year-over-year, it seems it is moving towards the FED's 2% goal. Anything can happen between now and then, but I think we will see at least one rate cut this year. BDCs have had a great run and rewarded investors nicely over the past 24 months or so. My top performers in my portfolio have been my BDCs....
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For further details see:
Trinity Capital: A Growing BDC To Add To Your Portfolio As Sentiment Shifts (Rating Downgrade)