12-month performance: -30% Insider activity: Bullish Buying pattern: Large purchases from multiple insiders including CEO, CFO, and COO Recent news: Issued Covid-19 update
Goldman Sachs BDC is a specialty finance company that is focused on lending to middle-market companies, primarily in the US. The company’s objective is to generate current income and, to a lesser extent, capital appreciation by investing in debt and equity securities. GSBD is listed on the New York Stock Exchange and currently has a market capitalisation of $582 million.
Goldman Sachs BDC issued a Covid-19 business update on 19 March. Reassuringly, the company said that its portfolio has limited direct exposure to sectors that could be most impacted by the outbreak such as energy, travel, and transportation. It also said that its top five sector exposures are industries that could be less directly impacted by the pandemic such as healthcare and software. In addition, the company advised that as of 18 March, it had only drawn approximately $300 million of its $795 million revolving credit facility.
Source: 2iQ Research
GSBD shares have tanked since mid-February and what’s interesting is that a large number of insiders have been buying. Since 9 March, we have observed purchases from a number of top-level insiders including President and CEO Brendan McGovern, CFO Jonathan Lamm, COO Jon Yoder, Head of Research David Yu, and Chairman Jaime Ardila. In our view, this pattern of cluster buying from top-tier insiders is very bullish. With the stock still down more than 30% year to date, we think the risk/reward profile is attractive.
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