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OHA Investment: 1 Month Low

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OHA Investment(OHAI) is at a 1 month low of $2.72 at 11:52 am EST.

The volatile stock was as high as $3.0 a share and was at $2.96 just a week ago (November 15th).

Because of the small market cap and thin trading, this has become a trader’s delight.

$2.96 to $2.72 in a week is an 8% move on absolutely no news.

If you’d had the nerve to buy at $1.94 a share-OHAI’s lowest low on June 30, 2016, you’d be up 40%.

Plus collecting a $0.06 dividend !

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We have learned to eschew speculative investments like OHAI.

For every 40% climb, there’s a potential equal drop.

Without benefit of any special information or analytical insight that’s just like betting.

Fun when you win, and frustrating when you lose.

Longer term we even question the BDC’s chances of survival.

Most of the benefit of keeping OHAI running appears to be inuring to the External Manager.

[Still charging unchanged Management and Incentive Fees and getting expenses repaid even as NAV drops}.

And whoever bought at a price below $2.72…

However, given we are throwing out BDC Ideas:

For the investor with nerves of steel there may be substantial capital gains to be made in the short run.

Buying when the price dips sharply and selling when there is a resurgence of enthusiasm.

Given that after the Revolver is paid off there are some assets left for shareholders a complete wipe out is unlikely.

As we said, if you have nerves of steel and are willing to take a loss for that potential 5-20% short term gain…

 

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