There are many reasons why value investing has been one of the most popular investment strategies. One of those reasons that’s of particular importance today is the idea of “margin of safety.” By purchasing equities at prices lower than their intrinsic value, an investor allows some room for error in the value estimation process. And indeed, with the S&P 500 Index, the NASDAQ Composite, and the Dow Jones Industrial Average all surpassing their all-time highs, who can be 100% sure that the current valuations are justified? That’s why today, I’m going to show you a stock that trades at a significant discount. And the yield is pretty handsome, too.
The stock in question is Pennant Park Investment Corp. (NASDAQ:PNNT), a business development company based in New York City. Pennant Park focuses on investing in middle-market private businesses in the U.S. The investments can take the form of secured loans, mezzanine debt, and equity. According to Pennant Park’s latest earnings report, the company has a net asset value (NAV) of $9.10 per share. However, note that PNNT stock trades at just $6.91 apiece. So if the company’s portfolio hasn’t deteriorated much since that report, its current share price would represent a more than 20% discount from its NAV.
Source: Income Investors
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- Harvest the Fruit
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