National Securities Reiterates Buy Rating for THL Credit, Inc. (TCRD)
THL Credit, Inc. (NASDAQ:TCRD)‘s stock had its “buy” rating reaffirmed by equities researchers at National Securities in a report released on Monday. They currently have a $12.00 price target on the investment management company’s stock. National Securities’ price objective would indicate a potential upside of 20.36% from the stock’s current price.
The analysts wrote, “• TCRD reported NII/share of $0.31 versus our estimate of $0.28/share with the beat largely driven by the incentive fee coming in at $1.2 million compared to our estimate of $2.3 million. The incentive fee, subject to a total return hurdle, was not earned in full during the quarter as NAV/share declined Q/Q to $11.48 from $11.71.
• Non-accruals at amortized cost increased during the quarter to $46.3 million or 6.8% of the portfolio from $13.3 million or 1.9% the quarter prior. Washington Inventory Services was sold during the quarter and thus removed from non-accrual but CRS Reprocessing and Specialty Brands Holdings were added with a combined cost of $36.6 million.
• THL’s portfolio at fair value was comprised of 74.0% first lien loans and the Logan JV (joint venture) combined, up from 66.6% the quarter prior. We expect that this composition will continue to trend upwards as a percentage of total fair value and lead to fewer credit issues and thus more NAV stability going forward. While the first lien debt increasing will likely weigh on effective yields somewhat, the company can continue allocating capital to Logan (88% first lien as of 6/30/17) which had a 12.7% yield by cost as of 2Q17. Additionally, our expectation for fewer credit issues in 2018 also means less of a drag on overall portfolio yield.
• We are maintaining our 2017 NII/share estimate of $1.15 and are revising our 2018 NII/share estimate to $1.16 from $1.18.”
A number of other equities analysts also recently commented on the stock. Zacks Investment Research upgraded shares of THL Credit from a “strong sell” rating to a “hold” rating in a research note on Thursday, May 11th. Keefe, Bruyette & Woods restated a “hold” rating and issued a $10.50 target price on shares of THL Credit in a research note on Tuesday, April 11th. Deutsche Bank AG dropped their target price on shares of THL Credit from $10.75 to $10.50 and set a “buy” rating on the stock in a research note on Monday, May 8th. Maxim Group restated a “buy” rating and issued a $12.00 target price on shares of THL Credit in a research note on Friday, May 5th. Finally, TheStreet downgraded shares of THL Credit from a “b-” rating to a “c” rating in a research note on Monday, April 10th. Five analysts have rated the stock with a hold rating and three have issued a buy rating to the stock. The stock currently has an average rating of “Hold” and an average price target of $10.92.
Shares of THL Credit (TCRD) opened at 10.01 on Monday. THL Credit has a 52-week low of $8.75 and a 52-week high of $11.70. The firm’s 50-day moving average price is $9.95 and its 200 day moving average price is $10.03.
THL Credit (NASDAQ:TCRD) last issued its earnings results on Thursday, August 3rd. The investment management company reported $0.31 EPS for the quarter, topping the Zacks’ consensus estimate of $0.27 by $0.04. The business had revenue of $20.28 million for the quarter, compared to the consensus estimate of $20.35 million. THL Credit had a net margin of 29.81% and a return on equity of 10.22%. The company’s revenue for the quarter was down 1.0% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.35 EPS. Analysts predict that THL Credit will post $1.13 EPS for the current year.
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In other THL Credit news, CEO Sam W. Tillinghast acquired 5,000 shares of the company’s stock in a transaction dated Tuesday, June 6th. The shares were purchased at an average cost of $10.01 per share, for a total transaction of $50,050.00. Following the completion of the purchase, the chief executive officer now owns 127,704 shares in the company, valued at $1,278,317.04. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Over the last quarter, insiders have bought 6,925 shares of company stock worth $69,056. Insiders own 0.79% of the company’s stock.
Several institutional investors have recently added to or reduced their stakes in the stock. Muzinich & Co. Inc. increased its position in THL Credit by 103.5% in the first quarter. Muzinich & Co. Inc. now owns 898,081 shares of the investment management company’s stock worth $8,945,000 after buying an additional 456,685 shares in the last quarter. UBS Group AG increased its position in THL Credit by 20.6% in the first quarter. UBS Group AG now owns 806,713 shares of the investment management company’s stock worth $8,035,000 after buying an additional 137,939 shares in the last quarter. PVG Asset Management Corp acquired a new position in THL Credit during the first quarter worth about $1,174,000. Sumitomo Mitsui Asset Management Company LTD increased its position in THL Credit by 97.1% in the first quarter. Sumitomo Mitsui Asset Management Company LTD now owns 210,905 shares of the investment management company’s stock worth $2,100,000 after buying an additional 103,912 shares in the last quarter. Finally, Advisors Asset Management Inc. increased its position in THL Credit by 7.2% in the first quarter. Advisors Asset Management Inc. now owns 974,010 shares of the investment management company’s stock worth $9,701,000 after buying an additional 65,811 shares in the last quarter. Hedge funds and other institutional investors own 48.65% of the company’s stock.
About THL Credit
THL Credit, Inc is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of lower middle market companies.
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