Capital Southwest Corporation (CSWC) Stock Rating Reaffirmed by National Securities
Capital Southwest Corporation (NASDAQ:CSWC)‘s stock had its “buy” rating reiterated by National Securities in a research note issued on Monday. They currently have a $22.00 target price on the asset manager’s stock. National Securities’ price target suggests a potential upside of 28.96% from the company’s current price.
The analysts wrote, “• For the quarter ending 3/31/18, we model a $50.0 million gross issuance of 5.75% baby bonds by CSWC. We expect that the company will be able to price these tighter than recent issues by peers with substantial credit issues and far riskier loan books.
• The issuance we model will likely be used to pay down the credit facility balance as well as fund some new investments. Concomitantly, we expect the credit facility to be upsized to $150 million (from $100 million currently) and the spread above LIBOR to decline to 275 bps from 325 bps currently.
• Subsequent to the baby bond issuance, we model the company to continue to ramp balance sheet leverage until fiscal 4Q19 when we forecast a $75.0 million gross equity issuance completed at a 20% premium to trailing quarter NAV/share.
• All told, we expect that CSWC has ample dry powder for very strong portfolio growth. The dry powder, combined with the ability of the company to toggle between both LMM (lower middle market) and UMM (upper middle market) loans bodes well for consistent quarterly portfolio growth without sacrificing underwriting quality, as we see it.
• We model the portfolio at fair value to finish fiscal 2018 and 2019 at $365.0 million and $499.8 million, respectively, from $306.6 million as of 6/30/17.
• We are revising our fiscal 2018 core NII/share estimate to $1.11 from $1.07 and our fiscal 2019 core NII/share estimate to $1.47 from $1.33. “
Other equities analysts also recently issued research reports about the stock. National Bank Financial reaffirmed a “buy” rating and set a $22.00 price target on shares of Capital Southwest Corporation in a research note on Wednesday, June 28th. BidaskClub raised shares of Capital Southwest Corporation from a “hold” rating to a “buy” rating in a research note on Tuesday, August 22nd. Zacks Investment Research raised shares of Capital Southwest Corporation from a “strong sell” rating to a “hold” rating in a research note on Wednesday, October 11th. ValuEngine downgraded shares of Capital Southwest Corporation from a “buy” rating to a “hold” rating in a research note on Thursday, July 6th. Finally, Janney Montgomery Scott initiated coverage on shares of Capital Southwest Corporation in a research note on Friday, June 30th. They set a “neutral” rating and a $18.00 price target on the stock. Three investment analysts have rated the stock with a hold rating and five have given a buy rating to the company. The stock presently has a consensus rating of “Buy” and a consensus price target of $20.25.
Shares of Capital Southwest Corporation (NASDAQ:CSWC) opened at 17.06 on Monday. The firm has a market cap of $273.06 million, a P/E ratio of 10.35 and a beta of -0.51. Capital Southwest Corporation has a 12-month low of $13.81 and a 12-month high of $17.76. The company has a 50-day moving average of $16.94 and a 200 day moving average of $16.45.
In other news, major shareholder Moab Capital Partners Llc sold 53,270 shares of the stock in a transaction on Monday, August 28th. The shares were sold at an average price of $17.30, for a total value of $921,571.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. 5.90% of the stock is owned by corporate insiders.
Several institutional investors have recently added to or reduced their stakes in CSWC. Advisors Asset Management Inc. acquired a new stake in shares of Capital Southwest Corporation in the second quarter worth $179,000. JPMorgan Chase & Co. increased its position in shares of Capital Southwest Corporation by 8.3% in the second quarter. JPMorgan Chase & Co. now owns 15,722 shares of the asset manager’s stock worth $253,000 after acquiring an additional 1,207 shares in the last quarter. Steinberg Global Asset Management increased its position in shares of Capital Southwest Corporation by 8.1% in the second quarter. Steinberg Global Asset Management now owns 16,020 shares of the asset manager’s stock worth $258,000 after acquiring an additional 1,200 shares in the last quarter. Bard Associates Inc. acquired a new stake in shares of Capital Southwest Corporation in the second quarter worth $263,000. Finally, Wedbush Securities Inc. increased its position in shares of Capital Southwest Corporation by 27.5% in the second quarter. Wedbush Securities Inc. now owns 21,804 shares of the asset manager’s stock worth $351,000 after acquiring an additional 4,700 shares in the last quarter. 62.07% of the stock is owned by institutional investors.
About Capital Southwest Corporation
Capital Southwest Corporation is an investment company that specializes in providing customized financing to middle market companies in a range of industry segments located primarily in the United States. The Company is a specialty lending company. Its principal investment objective is to produce risk-adjusted returns by generating current income from debt investments and capital appreciation from its equity and equity related investments.
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