Gladstone Capital (NASDAQ:GLAD) was upgraded by research analysts at National Securities from a “sell” rating to a “neutral” rating in a research note issued to investors on Tuesday. The firm currently has a $8.00 price target on the investment management company’s stock. National Securities’ price target would indicate a potential downside of 4.88% from the stock’s current price.
The analysts wrote, “• Gladstone posted $0.21/share of NII for fiscal 1Q18, matching our estimate as well as the quarterly dividend. The portfolio at cost increased by 9.4% Q/Q but total investment income was largely flat due to fee income being down 69% linked Q/Q due to muted prepayment activity.
• During the quarter GLAD issued 471,000 shares at a weighted average price of $9.69/share, representing 15% premium to 9/30/17 NAV/share. With shares of GLAD and most BDCs under pressure in the current quarter, we expect ATM issuance will likely slow for the quarter ending 3/31/18 but nonetheless expect Gladstone to generate modest portfolio growth.
• NIM should improve as a result of the previous 6.75% preferred being replaced with 6.00% preferred. We also anticipate the credit facility margin over LIBOR to be reduced in the coming quarter, which should provide a tailwind for what we anticipate will continue to be a competitive LMM.
• Oil & gas investments increased to 14.3% of the portfolio at fair value from 9.9% Q/Q as the company made a $20.3 million investment in Impact! Chemical Technologies. However, management noted that subsequent to quarter-end part of an existing energy investment was sold down and thus energy exposure will likely be trimmed for 3/31/18.
• We are revising our fiscal 2018 NII/share estimate to $0.86 from $0.85 and our fiscal 2019 NII/share estimate to $0.87 from $0.86. We are upgrading shares to NEUTRAL from SELL as the current price relative to our $8 target price would represent a positive total return when including dividends. “
Separately, Zacks Investment Research upgraded shares of Gladstone Capital from a “sell” rating to a “hold” rating in a research note on Wednesday, December 6th. Six investment analysts have rated the stock with a hold rating and one has given a buy rating to the stock. The stock has an average rating of “Hold” and a consensus price target of $9.16.
Gladstone Capital (NASDAQ:GLAD) last issued its quarterly earnings data on Monday, February 5th. The investment management company reported $0.21 EPS for the quarter, hitting the Thomson Reuters’ consensus estimate of $0.21. Gladstone Capital had a net margin of 43.78% and a return on equity of 9.94%. The business had revenue of $10.86 million during the quarter, compared to analyst estimates of $10.72 million. research analysts predict that Gladstone Capital will post 0.86 EPS for the current fiscal year.
In other news, President Robert L. Marcotte bought 8,000 shares of the firm’s stock in a transaction on Wednesday, November 29th. The shares were bought at an average price of $9.82 per share, for a total transaction of $78,560.00. Following the purchase, the president now owns 381,770 shares in the company, valued at $3,748,981.40. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Walter H. Wilkinson bought 6,134 shares of the firm’s stock in a transaction on Monday, November 27th. The shares were purchased at an average price of $9.79 per share, for a total transaction of $60,051.86. Following the purchase, the director now owns 13,517 shares in the company, valued at approximately $132,331.43. The disclosure for this purchase can be found here. In the last three months, insiders purchased 22,334 shares of company stock worth $215,692. 5.89% of the stock is currently owned by insiders.
Several institutional investors have recently added to or reduced their stakes in GLAD. GSA Capital Partners LLP raised its position in shares of Gladstone Capital by 193.0% during the third quarter. GSA Capital Partners LLP now owns 89,073 shares of the investment management company’s stock valued at $846,000 after buying an additional 58,673 shares during the last quarter. Arrowstreet Capital Limited Partnership bought a new stake in shares of Gladstone Capital during the second quarter valued at approximately $542,000. Goldman Sachs Group Inc. bought a new stake in shares of Gladstone Capital during the second quarter valued at approximately $415,000. Bank of Montreal Can raised its position in shares of Gladstone Capital by 15.6% during the fourth quarter. Bank of Montreal Can now owns 245,000 shares of the investment management company’s stock valued at $2,256,000 after buying an additional 33,000 shares during the last quarter. Finally, Janney Montgomery Scott LLC raised its position in shares of Gladstone Capital by 68.5% during the third quarter. Janney Montgomery Scott LLC now owns 43,549 shares of the investment management company’s stock valued at $414,000 after buying an additional 17,709 shares during the last quarter. Hedge funds and other institutional investors own 14.32% of the company’s stock.
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Gladstone Capital Company Profile
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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