American Capital Strategies (ACAS): It Is Time To BUY!!!

I recently bought shares of American Capital Strategies (ACAS) for a number of reasons. They pay a great dividend, which management is committed to growing, and are the class of their industry. Peers such as Apollo Investments and Allied Capital simply cannot compete at the same level as ACAS. Moreover, ACAS is increasingly turning to alternative-asset management for future growth. The company's current investment in alternative-asset management now stands at $11 billion. However, this number is expected to roughly double in the next year to somewhere between $17 and $23 billion dollars. This is significant for two, related reasons. One, this type of business is highly profitable and offers incredible profit margins. Two, because alternative asset management is so profitable, companies that are involved in this type of business command very high multiples. Take Blackrock (BLK) and Fortress Capital (FIG) for example. Both companies trade at price to earnings (trailing 12 months) multiples of over forty. Now one should not assume that American Capital Strategies will soon be trading at a similar price to earnings (trailing 12 months) multiple to BLK or FIG any time soon or ever for that matter. One should assume, however, that as Wall Street realizes that ACAS is not just your typical Business Development Firm and that the company is entering into a new and very lucrative business arena, the price to earnings multiple on the company will expand considerably. This will, in turn, create even more wealth for American Capital Strategies' shareholders.