Eagle Point Credit Company (ECCC) is a closed-ended fund that invests in collateralized loan obligations (CLOs), a type of structured credit product. While CLOs are often perceived as complex and risky investments, ECCC's focus on the equity and junior debt tranches of CLOs has allowed them to generate significant returns for investors. However, a closer look at ECCC's recent financial data reveals a fascinating trend that appears to have flown under the radar of most analysts: the company's strategic use of share issuance to fuel growth and enhance returns.

While the available data doesn't include a "current quarter transcript", it provides a wealth of financial information spanning multiple years. One particularly interesting aspect is the consistent increase in ECCC's outstanding shares, both annually and quarterly. This trend suggests that the company is actively leveraging the equity markets to raise capital, potentially to acquire new CLO investments or to strengthen its financial position.

The numbers tell a compelling story. Looking at the "outstandingShares" section of the data, we see a substantial increase in ECCC's common stock shares outstanding over the past few years. From 2020 to 2023, the number of shares outstanding nearly doubled, rising from 32,354,889 to 67,177,232. This aggressive share issuance activity is even more pronounced when we examine the quarterly data. In just the first quarter of 2024, ECCC increased its shares outstanding by over 3 million, reaching 80,729,234.

ECCC's Share Issuance and Total Assets Growth (2020-2024)

This strategy appears to be paying off for ECCC. The company's total assets have also grown significantly, indicating that the capital raised through share issuance is being deployed effectively. For example, total assets in 2023 grew to $954,493,581 from $760,152,908 in 2022. The "Financials" section reveals a positive trend in ECCC's net income, demonstrating that the company is not only expanding its asset base but also generating profits from its investments.

However, the market seems to be overlooking the potential implications of ECCC's share issuance strategy. The company's market capitalization remains stubbornly low, suggesting that investors are not fully appreciating the value being created by the company's growth. This disconnect presents a unique opportunity for astute investors who are willing to look beyond the surface and recognize the potential for substantial upside.

Hypothesis:

ECCC's strategic use of share issuance is a deliberate and calculated approach to fuel growth and generate attractive returns for investors. By accessing the equity markets, the company can capitalize on investment opportunities in the CLO space and enhance its overall profitability.

Evidence:

Consistent increase in outstanding shares, both annually and quarterly

Significant growth in total assets, indicating effective deployment of capital

Positive trend in net income, demonstrating profitability

Potential Implications:

Undervalued market capitalization, presenting a potential buying opportunity for investors

Continued growth and expansion in the CLO market

Enhanced returns for long-term investors who recognize the value of ECCC's strategy

While the market may be slow to catch on, the numbers don't lie. ECCC's strategic share issuance, combined with its strong financial performance, points towards a hidden gem in the making. Investors who are willing to dig deeper and understand the company's unique approach could be handsomely rewarded in the years to come.

"Fun Fact: ECCC's headquarters are located in Greenwich, Connecticut, a town known for its affluent residents and its prominent role in the hedge fund industry."