TCP Capital Corp. (TCPC) Receives “Buy” Rating from National Securities
TCP Capital Corp. (NASDAQ:TCPC)‘s stock had its “buy” rating reiterated by analysts at National Securities in a report released on Thursday. They presently have a $17.00 price objective on the investment management company’s stock. National Securities’ price objective would suggest a potential upside of 4.62% from the company’s previous close.
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. “
A number of other analysts also recently commented on the company. FBR & Co restated a “buy” rating on shares of TCP Capital Corp. in a research note on Thursday, August 18th. Citigroup Inc. upped their target price on TCP Capital Corp. from $14.00 to $15.00 and gave the stock a “neutral” rating in a research note on Wednesday, August 17th. Zacks Investment Research upgraded TCP Capital Corp. from a “sell” rating to a “hold” rating in a research note on Thursday, August 11th. JMP Securities upped their target price on TCP Capital Corp. from $16.50 to $17.00 and gave the stock a “market outperform” rating in a research note on Wednesday, August 10th. Finally, Deutsche Bank AG upped their target price on TCP Capital Corp. from $14.75 to $15.50 and gave the stock a “hold” rating in a research note on Wednesday, August 10th. Four research analysts have rated the stock with a hold rating and six have given a buy rating to the company. TCP Capital Corp. currently has a consensus rating of “Buy” and an average target price 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 1-year low of $12.00 and a 1-year high of $16.78. The firm has a 50-day moving average price of $16.21 and a 200-day moving average price of $15.20.
TCP Capital Corp. (NASDAQ:TCPC) last issued 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 return on equity of 12.52% and a net margin of 39.12%. Analysts predict that TCP Capital Corp. will post $1.51 earnings per share for the current year.
The company also recently announced a quarterly dividend, which will be paid on Friday, September 30th. Shareholders of record on Friday, September 16th will be issued a dividend of $0.36 per share. The ex-dividend date of this dividend is Wednesday, September 14th. This represents a $1.44 dividend on an annualized basis and a dividend yield of 8.86%. TCP Capital Corp.’s payout ratio is currently 134.58%.
Institutional investors have recently made changes to their positions in the stock. WFG Advisors LP boosted its position in shares of 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 last quarter. 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 valued at $398,000 after buying an additional 607 shares in the last quarter. 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 valued at $1,303,000 after buying an additional 1,259 shares in the last quarter. 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 valued at $1,474,000 after buying an additional 1,791 shares in the last quarter. 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 valued at $367,000 after buying an additional 2,535 shares in the last quarter. 44.33% of the stock is owned by institutional investors and hedge funds.
About TCP Capital Corp.
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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