Sunday, April 6, 2014

Why American Capital Is Poised to Keep Poppin'

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, private equity firm American Capital (NASDAQ: ACAS  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at American Capital and see what CAPS investors are saying about the stock right now.

American Capital facts

Headquarters (founded)

Bethesda, Md. (1986)

Market Cap

$4.2 billion

Industry

Asset management

Trailing-12-Month Revenue

$630.0 million

Management

Founder / Chairman / CEO Malon Wilkus
CFO John Erickson

Return on Equity (average, past 3 years)

26.2%

Cash / Debt

$360.0 million / $662.0 million

Competitors

Ares Capital 
Fortress Investment Group
MCG Capital 

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 2,056 members who have rated American Capital believe the stock will outperform the S&P 500 going forward.   

Just last week, one of those Fools, All-Star NovaTodd, succinctly summed up the bull case for our community:

American Capital continues to buy dollar bills for 70 cents by repurchasing its own shares at a discount to tangible book. So long as the stock trades at a discount to NAV, the company will continue to create shareholder value through the repurchase; if and when the price catches up with NAV, the resumption of a dividend could act as a catalyst for the share price.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, American Capital may not be your top choice. We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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