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TLT Shorts Should Be Long This 10%+ Yielding Sector

Published Wed, 11 Sep 2019 11:17:36 -0400 on Seeking Alpha

Potential Pullback in Treasuries?
For 2019, the iShares 20+Year Treasury ETF (TLT) has almost outperformed the S&P 500 Index, as measured by the SPDR S&P 500 ETF (SPY) but that is likely coming to end and others agree as the open interest for the Sept. 20 TLT puts continues to increase:

Another bearish indicator is its relative strength index (RSI) which has hit overbought level, rising well above 70 and the highest level in the past five years:

Continued Flight to Safety or Risk On?
The recent inversion of parts of the yield curve and continued traded tensions have given investors cause for concern. However, stocks typically have 18 months of gains following inversion of the 2-10 spread until returns start to turn negative, Credit Suisse data showed:

Also, U. S. economic data throughout 2019 has been mostly positive. During a question-and-answer session in Zurich last week, Federal Reserve Chairman Jerome Powell mentioned:
The most likely outlook for our economy remains a favorable one with moderate growth, a strong labor market and inflation moving back up close to our 2% goal...
Treasury prices are influenced by the market's appetite for risk which is currently on the rise according to CNN Fear & Greed Index:


Source: CNN Fear & Greed Index
TLT and Business Development Companies (BDCs):
Business development companies (BDCs) were created by Congress in 1980 to give investors an opportunity to... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
MONROE CAPITAL 10.48   18.4 0.57 1.40 13.60
THL CREDIT 6.96   0.0 -0.86 0.84 12.09
PENNANTPARK INVESTMENT 6.32   21.8 0.29 0.72 11.32
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
TCP CAPITAL 13.75   29.3 0.47 1.44 10.48
PENNANTPARK FLOATING RATE CAPITAL 11.68   30.0 0.39 1.14 9.81
HERCULES TECH GROWTH CAP 13.26   10.0 1.32 1.28 9.55
GLADSTONE CAPITAL 9.50   63.3 0.15 0.84 8.84
ARES CAPITAL 19.19   10.5 1.82 1.60 8.39
CAPITAL SOUTHWEST 21.81   12.2 1.78 1.60 7.21
GOLUB CAPITAL BDC 18.55   15.7 1.18 1.28 6.89
MEDLEY CAPITAL 2.61   0.0 -1.62 0.15 5.81
MAIN STREET CAPITAL 43.18   16.8 2.57 2.46 5.69
SPDR S&P 500 ETF 301.29   0.0 0.00 5.42 1.82

MONROE CAPITAL - MRCC
MONROE CAPITAL - MRCC  


Older articles featuring Monroe Capital (MRCC):
Digging Into The Credit Profile For 10.7% Yielding BlackRock TCP Capital
TCG BDC: 11.5% Yield And 17% Below Book
Still Waiting For A Dividend Increase From Oaktree
Assessing Risk: Retirement Portfolio Using BDCs Yielding 10%+
Building A Retirement Portfolio With BDCs Currently Yielding 10.6%
Prospect Capital: Upcoming Credit Issues And 11%+ Yielding Replacement
Yield-Starved Investors Still Accumulating BDCs Paying More Than 10% Annually
10% Yielding New Mountain Finance Receives Fitch Rating
Apollo Investment: 12% Yield Supported By Improving Portfolio Quality
Strong Buy With 12% Yield With 30%+ Return Potential: TCG BDC

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