Western Asset High Income Opportunity Fund Inc. (HIO)

NEW YORK--(BUSINESS WIRE)--Category: Financials.

Penserra Capital Management LLC grew its position in shares of Western Asset High Income Opportunity Fund Inc. (NYSE: HIO) by 16.3% in the third quarter, according to its most recent filing with the SEC. The fund owned 1,429,226 shares of the closed-end fund's stock after acquiring an additional 200,675 shares during the quarter.

Western Asset High Income Opportunity Fund maintains a sell rating due to poor NAV growth and unsustainable dividend coverage. HIO trades at a 6.23% discount to NAV, yet remains expensive relative to its ten-year historical range and recent performance. The fund's high 11.3% yield is not supported by consistent net investment income, risking future dividend cuts.

NEW YORK--(BUSINESS WIRE)--Category: Fund Announcement.

Western Asset High Income Opportunity Fund Inc. (NYSE: HIO - Get Free Report)'s stock price passed below its 200-day moving average during trading on Thursday. The stock has a 200-day moving average of $3.89 and traded as low as $3.72. Western Asset High Income Opportunity Fund shares last traded at $3.7350, with a volume of

Western Asset High Income Opportunity Fund Inc. offers an 11.24% yield, outperforming major bond indices but trailing some closed-end fund peers. HIO's net asset value has declined consistently, raising concerns about distribution sustainability as it fails to fully cover payouts with investment income. Recent market events and Fed rate cuts have pressured HIO's income, especially from its floating-rate assets, and further cuts may worsen this trend.

Western Asset High Income Opportunity Fund Inc. (NYSE: HIO - Get Free Report) saw a large growth in short interest in the month of October. As of October 15th, there was short interest totaling 87,100 shares, a growth of 83.0% from the September 30th total of 47,600 shares. Based on an average daily volume of 413,300

HIO is a high-yield, diversified closed-end fund trading near its lowest valuation in the past year, offering attractive entry for value-seeking investors. The fund boasts a moderate BB credit rating, no leverage, and a 10.47% distribution rate on NAV, making it suitable for conservative, income-focused portfolios. HIO's historical total returns have consistently outperformed HYG, even when HYG is leveraged, underscoring its strong long-term performance.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

I rate HIO a sell due to weak underlying performance, poor NAV growth, and inconsistent distribution coverage in the current high interest rate environment. HIO offers an attractive 11% yield, but its focus on high-yield, below-investment-grade debt increases risk and makes distributions vulnerable to cuts. The fund's persistent NAV decline and frequent net realized losses raise concerns about long-term capital preservation and sustainability of payouts.

NEW YORK--(BUSINESS WIRE)--Category: Fund Announcement.

WEST HARRISON, N.Y.--(BUSINESS WIRE)--Sky Harbour Group Corporation (NYSE: SKYH, SKYH WS), an aviation infrastructure company building the first nationwide network of Home-Basing campuses for business aircraft, announced the execution of a new ground lease agreement with the Port of Portland for the development of a Sky Harbour Home Base hangar campus at Hillsboro Airport (HIO), serving Portland, OR, and the City of Hillsboro, OR. The Sky Harbour campus, a two-phase development on approximately.

The Western Asset High Income Opportunity Fund offers a competitive 10.52% yield, outperforming major fixed-income indices and appealing to income-focused investors. Despite problems in the bond market, the fund's performance has been strong, with a 7.93% total return over the past six months. The fund is focused on investing in junk bonds instead of floating-rate securities, which is a better place to be in the current rate environment.

As I write this, the S&P 500 is sitting on a 28% total return for 2024. And of course, that could shoot even higher if we get the traditional Santa Claus rally.

HIO is a well-diversified fixed income CEF with over 250 holdings, mainly in U.S. high-yield bonds, and minimal currency risk. The fund has shown robust returns, outperforming unleveraged peers, but lags over a longer time frame and has wider drawdowns. Current tight credit spreads suggest caution; consider lightening exposure and re-entering after a 10% price drop.

The Western Asset High Income Opportunity Fund offers a high yield of 10.76%, outperforming peers but with potential risks due to inflation. The fund primarily invests in junk bonds, but has the potential to invest in common stocks. It is not currently exercising this option. Bonds may not provide sufficient protection against a resurgence of inflation, which is quite possible once the Fed cuts rates.