4-Star Stocks Poised to Pop: American Capital


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, business-development company American Capital (NAS: ACAS) has earned a respected four-star ranking.

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

American Capital facts

Headquarters (Founded)

Bethesda, Md. (1986)

Market Cap

$2.81 billion


Asset management

Trailing-12-Month Revenue

$586 million


Chairman/CEO Malon Wilkus
CFO John Erickson

Return on Capital (Average, Past 3 Years)



$186 million / $1.74 billion

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 2,073 members who have rated American Capital believe the stock will outperform the S&P 500 going forward. These bulls include Zo3adams and TDSWIM.

Late last month, Zo3adams tapped American Capital as a potentially juicy income opportunity: "Have to wait out reinstatement of the dividend, time frame is hard to predict, but if able to wait this is a strong bet."

Currently, American Capital even trades at a paltry price-to-book of 0.6. That represents a discount to much larger financial companies like Goldman Sachs (NYS: GS) (0.8), US Bancorp (NYS: USB) (1.4), and Wells Fargo (NYS: WFC) (1.0).

CAPS member TDSWIM elaborates on the American Capital bull case:

While this stock was beaten up badly during the financial crisis, their debt has been refinanced and they have brought on some prominent investors to take a stake since the crash. As the economy picks up, I expect ACAS to be trading back at pre-crisis levels within 3-5 years. ...

I would recommend getting into this stock before they reinstate a dividend. Once dividend payments resume, I believe that stock price appreciation will be greatly accelerated and you do not want to miss out.

What do you think about American Capital, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track American Capital?Add it to your watchlist.

At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned.The Fool owns shares of and has created a ratio put spread position on Wells Fargo.Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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