National Securities Reiterates Sell Rating for Gladstone Capital Corporation (NASDAQ:GLAD)
National Securities reissued their sell rating on shares of Gladstone Capital Corporation (NASDAQ:GLAD) in a research note published on Monday. They currently have a $8.00 price target on the investment management company’s stock.
“• Gladstone posted NII/share of $0.21/share for fiscal 3Q17, a penny above our estimate and matching consensus. Despite strong portfolio growth the past two quarters, revenue was lighter than we had anticipated as fee income fell materially due to very low repayments during the quarter. This has followed the theme of what we have seen this earnings season: significant OID acceleration and prepayment fees in the core-to-upper middle market lenders and very little prepayments and fee income for the lower middle market lenders.
• The portfolio grew by 10.2% Q/Q to $345.5 million from $313.5 million with GLAD originating $35.8 million of investments on the quarter. D/E finished the quarter at 0.65x and the company has significant spare capacity on its credit facility and the ability to utilize its ATM (at-the-market) program to opportunistically issue equity as needed, which we think bodes well for portfolio growth.
• We are revising our fiscal 2017 NII/share estimate to $0.85 from $0.84 and our fiscal 2018 NII/share estimate to $0.85 from $0.86. Even with high effective yields on the loans Gladstone is originating, the cost of capital is too high at this time for earnings growth to materialize even when modeling strong portfolio growth, in our opinion, and we continue to believe shares are overvalued.,” the firm’s analyst commented.
Several other research analysts have also weighed in on GLAD. Hilliard Lyons raised shares of Gladstone Capital Corporation from an underperform rating to a neutral rating and increased their target price for the stock from $8.50 to $9.25 in a research note on Thursday, May 4th. Zacks Investment Research raised shares of Gladstone Capital Corporation from a hold rating to a buy rating and set a $11.00 target price for the company in a research note on Tuesday, May 9th. Finally, BidaskClub lowered shares of Gladstone Capital Corporation from a buy rating to a hold rating in a research note on Monday, July 17th. One research analyst has rated the stock with a sell rating, three have issued a hold rating and one has issued a buy rating to the company. The stock presently has an average rating of Hold and an average price target of $9.56.
Gladstone Capital Corporation (NASDAQ:GLAD) traded up 0.20% during midday trading on Monday, reaching $9.92. 53,364 shares of the company’s stock traded hands. The firm’s 50-day moving average is $9.86 and its 200-day moving average is $9.62. Gladstone Capital Corporation has a 1-year low of $7.33 and a 1-year high of $10.12.
Gladstone Capital Corporation (NASDAQ:GLAD) last released its quarterly earnings data on Wednesday, August 2nd. The investment management company reported $0.21 earnings per share (EPS) for the quarter, hitting the Thomson Reuters’ consensus estimate of $0.21. Gladstone Capital Corporation had a net margin of 85.01% and a return on equity of 9.88%. The firm had revenue of $9.63 million during the quarter, compared to analysts’ expectations of $10.30 million. On average, analysts anticipate that Gladstone Capital Corporation will post $0.78 EPS for the current year.
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The business also recently announced a monthly dividend, which will be paid on Thursday, August 31st. Shareholders of record on Monday, August 21st will be paid a dividend of $0.07 per share. This represents a $0.84 annualized dividend and a yield of 8.48%. The ex-dividend date is Thursday, August 17th. Gladstone Capital Corporation’s dividend payout ratio (DPR) is presently 62.22%.
A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Norges Bank bought a new position in shares of Gladstone Capital Corporation during the fourth quarter valued at $785,000. Koshinski Asset Management Inc. raised its position in shares of Gladstone Capital Corporation by 12.8% in the first quarter. Koshinski Asset Management Inc. now owns 24,678 shares of the investment management company’s stock valued at $234,000 after buying an additional 2,807 shares during the period. Prospera Financial Services Inc raised its position in shares of Gladstone Capital Corporation by 9.8% in the first quarter. Prospera Financial Services Inc now owns 54,000 shares of the investment management company’s stock valued at $504,000 after buying an additional 4,800 shares during the period. Winslow Evans & Crocker Inc. raised its position in shares of Gladstone Capital Corporation by 150.8% in the first quarter. Winslow Evans & Crocker Inc. now owns 15,300 shares of the investment management company’s stock valued at $145,000 after buying an additional 9,200 shares during the period. Finally, DnB Asset Management AS raised its position in shares of Gladstone Capital Corporation by 31.3% in the first quarter. DnB Asset Management AS now owns 60,001 shares of the investment management company’s stock valued at $569,000 after buying an additional 14,300 shares during the period. 15.94% of the stock is owned by institutional investors.
About Gladstone Capital Corporation
Gladstone Capital Corporation is a closed-end, non-diversified management investment company, operating as a business development company (BDC). The objectives of the Company are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and to provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities of established businesses that it believes can grow over time to permit it to sell its equity investments for capital gains.
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