Alphyn Capital Management, an investment management firm, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned 8.9% net in the third quarter compared to 5.9% for the S&P500 Index. As of September 30, 2024, the top ten holdings accounted for approximately 71% of the portfolio, and approximately 9% of the portfolio was held in cash. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Alphyn Capital Management highlighted stocks like Oaktree Specialty Lending Corporation (NASDAQ:OCSL) in the third quarter 2024 investor letter. Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a business development company. The one-month return of Oaktree Specialty Lending Corporation (NASDAQ:OCSL) was -0.06%, and its shares lost 15.07% of their value over the last 52 weeks. On October 9, 2024, Oaktree Specialty Lending Corporation (NASDAQ:OCSL) stock closed at $16.40 per share with a market capitalization of $1.349 billion.
Alphyn Capital Management stated the following regarding Oaktree Specialty Lending Corporation (NASDAQ:OCSL) in its Q3 2024 investor letter:
“Oaktree Specialty Lending Corporation (NASDAQ:OCSL) experienced a challenging quarter, with three additions to its non-accrual portfolio. The most concerning investment is Pluralsight, a provider of tech skills development services. Despite appointing a new CEO to address performance issues in April, OCSL has written down the investment by 50%. The other two non-accrual investments, AT Holdings and Dialyze, are primarily related to PIK interest and warrants acquired at a low cost. OCSL remains confident in recovering these investments. As part of the Oaktree family, OCSL benefits from a robust platform and a deep bench of expertise to manage its non-accrual investments.
The declining interest rate environment poses a potential threat to net interest margin. To mitigate this impact and support the dividend, the company voluntarily waived $3.2 million in incentive management fees, resulting in a $0.01 per-share increase in net interest income. While not ideal, this action demonstrates management’s commitment to preserving shareholder value. At the current share price, OCSL now pays a dividend yield of over 13%, mainly from first lien credits.”
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Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held Oaktree Specialty Lending Corporation (NASDAQ:OCSL) at the end of the second quarter which was 10 in the previous quarter. While we acknowledge the potential of Oaktree Specialty Lending Corporation (NASDAQ:OCSL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Oaktree Specialty Lending Corporation (NASDAQ:OCSL) and shared the list of best BDC stocks to invest in. Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is one of the bottom performers of Alphyn Capital Management in Q1 2024. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.