National Securities Reaffirms Buy Rating for TCP Capital Corp. (TCPC)
TCP Capital Corp. (NASDAQ:TCPC)‘s stock had its “buy” rating reissued by investment analysts at National Securities in a research report issued to clients and investors on Thursday. They presently have a $17.00 target price on the investment management company’s stock. National Securities’ price target would indicate a potential upside of 4.62% from the company’s current price.
The analysts wrote, “$140 Million Convertible Notes Offering: TCPC (TCP Capital Corp.) issued $140 million (including overallotment) of 4.625% convertible notes due March 2022. The notes do not automatically convert above NAV as the ones sold to CNO financial this year did. Rather, the notes initially convert at 54.5019 shares per $1,000 of par (or $18.35/share). This represents a 25% premium to the 6/30/16 NAV/share. We expect that TCPC will pay down its operating company facility entirely and will pay down $70.0 million of its funding facility. These actions, combined with the $35.3 million of equity sold in a private placement plus our expectations of further SBA (Small Business Administration) debentures issuance will permit portfolio growth to continue through the remainder of 2016 with regulatory D/E (excluding SBA debentures) estimated to finish the year at 0.64x. The all-in cost of funds will likely increase to 3.81% for 2016 and 3.91% in 2017 from 3.36% in 2015. Floating rate funding for TCPC would fall to 42.7% in 4Q16 and 45.9% in 4Q17 from 70.4% in 4Q15 under our assumptions. We continue to expect robust portfolio growth through the next six quarters. We are revising our 2016 NII/share estimate from $1.55 to $1.53 and our 2017 NII/share estimate from $1.71 to $1.69. Our $17 price target implies an estimated 2017 P/NII (Price/NII) of 10.1x, dividend yield of 8.5%, and P/NAV (Price/NAV) of 1.11x compared to the BDC sector averages of 9.1x, 10.4%, and 0.90x, respectively. “
Other equities research analysts have also recently issued research reports about the company. Zacks Investment Research cut TCP Capital Corp. from a “hold” rating to a “sell” rating in a report on Wednesday, July 13th. Deutsche Bank AG increased their price target on TCP Capital Corp. from $14.75 to $15.50 and gave the company a “hold” rating in a report on Wednesday, August 10th. JMP Securities increased their price target on TCP Capital Corp. from $16.50 to $17.00 and gave the company a “market outperform” rating in a report on Wednesday, August 10th. FBR & Co increased their price target on TCP Capital Corp. from $16.00 to $17.50 and gave the company an “outperform” rating in a report on Wednesday, August 10th. Finally, Citigroup Inc. increased their price objective on TCP Capital Corp. from $14.00 to $15.00 and gave the stock a “neutral” rating in a research report on Wednesday, August 17th. Four analysts have rated the stock with a hold rating and six have assigned a buy rating to the company’s stock. TCP Capital Corp. presently has an average rating of “Buy” and an average price target of $16.22.
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Shares of TCP Capital Corp. (NASDAQ:TCPC) opened at 16.25 on Thursday. TCP Capital Corp. has a 12 month low of $12.00 and a 12 month high of $16.78. The firm’s 50-day moving average price is $16.21 and its 200-day moving average price is $15.20.
TCP Capital Corp. (NASDAQ:TCPC) last announced its earnings results on Tuesday, August 9th. The investment management company reported $0.38 EPS for the quarter, missing analysts’ consensus estimates of $0.39 by $0.01. TCP Capital Corp. had a net margin of 39.12% and a return on equity of 12.52%. On average, analysts predict that TCP Capital Corp. will post $1.51 EPS for the current year.
The company also recently announced a quarterly dividend, which will be paid on Friday, September 30th. Stockholders of record on Friday, September 16th will be given a dividend of $0.36 per share. This represents a $1.44 dividend on an annualized basis and a dividend yield of 8.86%. The ex-dividend date of this dividend is Wednesday, September 14th. TCP Capital Corp.’s dividend payout ratio (DPR) is currently 134.58%.
Hedge funds have recently bought and sold shares of the company. WFG Advisors LP boosted its stake in TCP Capital Corp. by 1.3% in the second quarter. WFG Advisors LP now owns 13,849 shares of the investment management company’s stock worth $212,000 after buying an additional 176 shares during the period. Citigroup Inc. boosted its stake in TCP Capital Corp. by 2.4% in the second quarter. Citigroup Inc. now owns 26,042 shares of the investment management company’s stock worth $398,000 after buying an additional 607 shares during the period. Taylor Frigon Capital Management LLC boosted its stake in TCP Capital Corp. by 1.5% in the second quarter. Taylor Frigon Capital Management LLC now owns 85,302 shares of the investment management company’s stock worth $1,303,000 after buying an additional 1,259 shares during the period. Legal & General Group Plc boosted its stake in TCP Capital Corp. by 1.9% in the second quarter. Legal & General Group Plc now owns 96,538 shares of the investment management company’s stock worth $1,474,000 after buying an additional 1,791 shares during the period. Finally, Wedbush Securities Inc. boosted its stake in TCP Capital Corp. by 11.8% in the second quarter. Wedbush Securities Inc. now owns 24,009 shares of the investment management company’s stock worth $367,000 after buying an additional 2,535 shares during the period. Institutional investors and hedge funds own 44.33% of the company’s stock.
TCP Capital Corp. Company Profile
TCP Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. The Company invests in debt securities of middle-market companies.
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