1/20/2024 0 Comments Dabble writer cost![]() The tech sector has seen its fair share of challenges over the past 18 months, as higher interest rates have put a damper on IPOs and M&A activity due to high cost of capital. OCSL's focus is tilted toward technology and healthcare, with application software, biotech, data processing, and pharma/healthcare being its top 5 sectors, as shown below. The majority of its investments (88%) are in the form of senior secured debt, with 76% being first lien and 12% being second lien. OCSL currently holds $3.1 billion in total investments that's spread across 156 portfolio companies. This, combined with a growing dividend payout has resulted in rewarding shareholder returns, with a 10.5% annualized return on equity over this timeframe, as shown below. This is reflected by NAV/share growing from $17.44 at the end of 2017 to $19.58 at present. OCSL has benefitted from Oaktree's stewardship with improved NAV/share performance. This has benefitted shareholders due both companies having a single and dedicated management team, resulting in cost synergies at a $1.4 million annualized run-rate. Since then, Oaktree merged OCSL and OCSI (Oaktree Strategic Income) into its current form. ![]() It was formerly Fifth Street Finance, at which time it saw declines in its book value, and was renamed after Oaktree Capital Management took over as the external advisor. Oaktree Specialty Lending is an externally-managed BDC that's gone through a series of transformations. In this article, I revisit the stock, provide and updated rating, and discuss why income investors may want to pay heed to OCSL at present, so let's dig in! Why OCSL? Perhaps I was being overzealous at the time, as the stock has seen its share of lows over this timeframe, and currently trades just 1.6% shy of the price at which I recommended it last. It's been a while since I last visited Oaktree Specialty Lending ( NASDAQ: OCSL) in December of last year, when I had a Strong Buy rating. ![]()
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