Apollo Investment Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of business development company, or BDC, Apollo Investment (NAS: AINV) were down as much as 15% earlier in the trading session after announcing third-quarter results.

So what: Rarely are the results of BDCs in primary focus -- and that's true of today's results. Apollo reported third quarter EPS of $0.32 and net investment income of $0.20. It also declared a dividend of $0.20 payable to shareholders in the fourth quarter. But, what has investors concerned is the company's announcement that it is considering up to a $200 million capital raise.

Now what: Foolish colleague Dan Caplinger couldn't have timed it any better when he took a closer look at Apollo earlier today. The allure of BDCs is their normally high dividend yields (in Apollo's case 14.1%), but you have to deal with the potentially dilutive hiccups that occur when these companies attempt to raise money through share offerings. Personally, I don't see much allure in Apollo's stagnant results of late. If you want a plump dividend, I'd still recommend taking a stroll down the mortgage REIT aisle.

Craving more input? Start by adding Apollo Investment to your free and personalized watchlist so you can keep track of the latest news with the company.

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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