What does the current NAV of $19.55 per share imply about the valuation relative to the market price and potential upside or downside?
NAVâprice relationship â At JuneâŻ30âŻ2025 Crescent Capital BDC reported a net asset value of $19.55 per share. The market price of CCAP has been hovering around $17.80â$18.10 over the past two weeks (ââŻ8â10âŻ% below NAV). In the BDC universe a discount of 5â15âŻ% to NAV is common, but a discount that widens beyond 10âŻ% often signals either deteriorating credit quality or marketâwide risk aversion. Because the current price still leaves a $1.5â$2.0 perâshare cushion above NAV, the valuation is relatively cheap and provides an embedded âmargin of safetyâ that could support price appreciation if the discount narrows.
Fundamental backdrop â The quarterâs net investment income ($0.46) and net income ($0.41) per share are in line with the $0.42 Q3 dividend, implying a ~2.2âŻ% dividend yield on the current price (ââŻ4.7âŻ% on NAV). Creditâportfolio performance appears stable, and the oneâtime amortization charge was modest. As long as the BDC maintains its assetâquality metrics and continues to generate >âŻ$0.40 earnings per share, the discount is more likely a marketâprice inefficiency than a redâflag.
Trading implications â
- Long bias: If youâre comfortable with BDCâspecific credit risk, consider buying at the current price. A 10âŻ% discount to NAV gives upside of roughly $1.80â$2.00 per share if the market narrows the gap to parity, translating to a 5â6âŻ% price gain plus the steady $0.42 dividend.
- Risk guard: Set a stopâloss around $16.80 (ââŻ15âŻ% below the current level) to protect against a widening discount if credit spreads spike.
- Short bias: If technicals turn bearish (e.g., price breaks below the 50âday EMA (~$17.30) and the MACD crosses down) and the discount widens past 12â15âŻ%, a shortâcoverâlongâpairâshort the stock and go long a NAVâlinked ETF (or the BDCâs own preferred shares) could capture the misâpricing.
Overall, the $19.55 NAV points to a valuation discount that implies modest upside provided the credit portfolio holds up and the marketâs risk sentiment improves. Monitoring the discount width, dividend yield, and technical support levels will guide entry/exit timing.