Why American Capital (ACAS) Stock Is Up Today

NEW YORK (TheStreet) -- American Capital (ACAS) was gaining 4.6% to $15.70 Wednesday after launching a $1.1 billion private equity fund.

The fund, called American Capital Equity III, will focus on investing in companies in the middle market. The company expects the closing of the fund within 90 days. The fund will increase American Capital's earning assets under management by $900 million, or 7%.

"We are pleased to announce the signing of ACE III," American Capital chairman and CEO Malon Wilkus said in a press release. "ACE III significantly diversifies and enhances our asset management franchise and expands our institutional investor base. This is another example of using our well capitalized balance sheet to incubate new funds under management."

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TheStreet Ratings team rates AMERICAN CAPITAL LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICAN CAPITAL LTD (ACAS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

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