Zacks.com said it lowered its rating on the shares of American Capital Strategies, Ltd., a publicly traded buy out and investment firm that owns Confluence Watersports and dozens of other companies.
Rothman said that while ACAS has increased its earnings and dividends since going public in 1997, market volatility caused by deteriorating conditions in the credit markets could undermine ACAS' diividend yield.
“We expect to see the earnings and dividend growth to continue through 2008,” wrote Rothmann. “But mergers & acquisitions (M&A) volumes declined in 1Q08. Also, the deterioration in the credit markets created general market volatility, and illiquidity has resulted in significant declines in the market values of debt and equity investments.”
Zacks.com lowered its earnings expectations for ACAS for FY08 and FY09 to $3.02 per share and $3.25 per share, respectively, from $3.55 per share and $3.65 per share.