XAI Octagon Floating Rate & Alternative Income Term Trust (XFLT): fair value, margin of safety and Wheel Score

Is XFLT undervalued?

XAI Octagon Floating Rate & Alternative Income Term Trust (XFLT) closed at 16.70 on 5 Nov 2026. The GLS average fair value - the simple average of the 3 valuation models that produced a positive number - is 42.03, which puts the price 60% below it. 2 of the 3 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

Only 3 of the nine models produced a value (DCF, 10 Cap, DDM); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.

The nightly engine files XFLT under Speculative - it is losing money or its Piotroski health score is 3 or lower - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan. It also carries the Income tag (Income = a dividend yield of 4% or more).

Nine valuation models for XFLT

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: XFLT passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 5.8 out of 10: a record that is solid on some of the four parts the score weighs (returns on capital, pricing power, lasting growth, balance sheet) and weaker on others.

Returns on capital are thin or negative - ROIC 1.5%, ROE 2.2%, ROA 1.3% - with debt at 0.45 times equity and a free-cash-flow yield of 24.7%.

The dividend yield is high at 19.01% (payout ratio -109%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.

Institutional ownership scores 4/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales; the last recorded insider buy was on 23 Oct 2026.

Wheel Score 31: No options

XFLT has no listed options in the nightly snapshot, so there is nothing to sell and the stock cannot be wheeled however good the business. It fails the first Wheel Trade Filter (options that actually trade), so the score stays under 70 and is shown as "No options" (31 here). The valuation and quality numbers still apply to owning the shares outright.

Volume runs at 166k shares a day on a market cap of $223M, with a beta of 0.56 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that fair.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

No upcoming earnings date is recorded for XFLT in the nightly calendar. The shares go ex-dividend on 16 Nov 2026 (0.2250 per share), so a covered call sold before then carries a small early-assignment risk around that date.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Asset Management - Income

The 12 companies below are the closest to XAI Octagon Floating Rate & Alternative Income Term Trust by market cap within the Asset Management - Income industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

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