Sam Collins

Bargain Play: American Capital Ltd.

by Sam Collins   08/19/08

American Capital Ltd. (ACAS) -- This business development company (BDC) specializes in management and employee private equity buyouts, acquisitions, recapitalizations, mergers and acquisition, etc.

It broke its bull-market trend line in late November and crashed with many other financial service stocks, falling from a high of almost $50 to just under $16. But at $16, ACAS appears to have flashed a selling climax and a strong buy from our internal indicator Collins Bollinger Reversal (CBR).

It is not usual for me to follow a stock with a broken chart but the weekly chart of ACAS shows the strong possibility of a double-bottom off of a prior low in late 2002. A dividend of $1.10 per quarter is assumed (though it could be higher), providing a yield of more than 20%.

A solid bounce could take ACAS to $30-$35. Bottom-fishers may want to position this stock.

---

Get Sam Collins' Daily Trader's Alert e-mailed straight to your inbox each morning before the opening bell absolutely FREE!

In addition to getting instant access to his Trade of the Day, you'll also receive, in the same e-mail, his Daily Market Outlook so you can start your day off right by positioning yourself for profits!

Click here today to sign up today for Sam's FREE Daily Trader's Alert!

Sam Collins can be reached directly at samailc@cox.net. You can also check out an archive of some of his most recent market outlooks by clicking here.