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A brief rundown of American Capital's (ACAS) Q2 earnings report (all figures US$ unless noted):

• After last quarter’s negative cash figure (-$10M OCF), Q2 saw several encouraging developments on the cash flow statement. ACAS is once again cash flow positive, generating $141M OCF during the 1st 6 months. This is a 26% decline from last year but with the difficult environment we’re facing, that might be expected. Another possible positive sign is the decline in accrued PIK income in Q2 2008, down to 25% of net operating income — compare that to the 6 month ratio of 32% of NOI. However, collect

Earlier this week we looked at my top 5 high fliers for 2008. Unfortunately, for every up, there is a down and that is certainly true for my portfolio. As before, we will look at results through July 31, 2008. Here they are my cellar dwellers with comments:

#5 - General Electric (GE) -19.3% Total 2008 Return
Of my cellar dwellers, GE is the one I am most bullish on. I liked it at $38 when I bought my first tranche in July/2007, and liked it even more at $29 when I bought my last tranche this month.

#4 - First Industrial Realty, Inc. (FR) -22.3% Total 2008 Return
This was my first ever dividend

Private equity has literally gone to the dogs this year, and our pick this week is one of the lesser-known, but higher quality names in the industry. It's not the "rock star" type of private equity company that makes headlines on a regular basis, like a Blackstone (BX) or a Fortress Group (FIG), but it's got some very strong internals to it, despite having been pretty much the baby that is being thrown out with the PE bathwater this year.

American Capital Strategies (ACAS) is a principal investment firm specializing in management and employee private equity buyouts, acquisitions, recapitali

Stocks discussed in the lightning round session of Jim Cramer’s Mad Money TV program, Thursday June 19. <!----> <!---->

Bullish calls:

Wal-Mart (WMT): "I only like Costco…I like Wal-Mart … I like TJX and I like Urban Outfitters."
Costco (COST), TJX Companies (TJX), Urban Outfitters (URBN)
Qualcomm (QCOM): "…buy, buy, buy. It's going higher... congratulations, you go it, and I missed it."
General Steel (GSI): "I like the steel business in general."
United States Steel (X), Reliance Steel (RS)
Gran Tierra Energy (GTE): "I don't want you to run for the exits... Buy some more if it goes under $7.

On 01/02/2008, I sold puts on American Capital Strategies (ACAS) at a strike price of $35 for May 2008 expiration, collecting a premium of $5.50 per contract (all detailed on my portfolio spreadsheet). Those contracts are trading at $4.00 at last check and I can close them out for a gain of 4% (12% annualized) on value at risk.

However, after reviewing Q1 2008 results, I am comfortable with adding ACAS to our portfolio at an effective price of $29.56 per share.