Capital Southwest (NASDAQ:CSWC)‘s stock had its “buy” rating reiterated by analysts at National Securities in a report issued on Wednesday. They presently have a $22.00 price objective on the asset manager’s stock. National Securities’ price objective would indicate a potential upside of 36.99% from the company’s current price.
The analysts wrote, “• CSWC posted core (pre-tax) NII/share of $0.27 compared with our estimate of $0.30. the reason for the miss was entirely attributable to the tax benefit the company received (equivalent to $0.03/share). NII/share was $0.29/share, matching our estimate and exceeding the quarterly dividend of $0.26/share.
• Asset quality continues to be strong with no non-accrual assets and a single watch list investment, Wastewater Specialties, which was marked down after some flooding during the hurricane in Texas in September. However, management seems upbeat about the company’s prospects and we believe this being watch listed is a conservative move by the company.
• NAV/share increased to $18.44 from $18.26 Q/Q driving annualized economic return of 9.7% on the quarter, largely due to $5.1 million of unrealized gains on the equity book.
• D/E finished the quarter at only 0.31x with the company having a target of 0.70x-0.80x, leading us to expect strong portfolio growth through fiscal 2019 without the need to issue equity. We continue to model stair step increases in NII and dividends as the company works towards its balance sheet leverage target.
• We are revising our fiscal 2018 core NII/share estimate to $1.04 from $1.10 and our fiscal 2019 core NII/share estimate to $1.41 from $1.51.”
Several other equities analysts have also commented on CSWC. BidaskClub raised shares of Capital Southwest from a “sell” rating to a “hold” rating in a report on Tuesday. Ladenburg Thalmann Financial Services initiated coverage on shares of Capital Southwest in a report on Thursday, November 30th. They issued a “buy” rating and a $19.00 price target on the stock. Finally, Zacks Investment Research raised shares of Capital Southwest from a “strong sell” rating to a “hold” rating in a report on Wednesday, October 11th. Four equities research analysts have rated the stock with a hold rating and four have issued a buy rating to the company. Capital Southwest has a consensus rating of “Buy” and an average price target of $20.00.
Capital Southwest (NASDAQ:CSWC) last released its earnings results on Monday, November 6th. The asset manager reported $0.25 EPS for the quarter, meeting the Thomson Reuters’ consensus estimate of $0.25. Capital Southwest had a net margin of 91.90% and a return on equity of 5.51%. The company had revenue of $8.51 million for the quarter, compared to analyst estimates of $8.13 million. research analysts forecast that Capital Southwest will post 1 earnings per share for the current year.
In other news, Director David R. Brooks purchased 2,000 shares of the business’s stock in a transaction on Thursday, December 28th. The shares were acquired at an average price of $16.66 per share, with a total value of $33,320.00. Following the acquisition, the director now directly owns 22,000 shares in the company, valued at $366,520. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, VP Douglas M. Kelley purchased 1,500 shares of the business’s stock in a transaction on Monday, November 13th. The stock was purchased at an average cost of $17.00 per share, for a total transaction of $25,500.00. Following the acquisition, the vice president now owns 66,135 shares in the company, valued at $1,124,295. The disclosure for this purchase can be found here. In the last three months, insiders acquired 5,880 shares of company stock worth $98,551. Insiders own 5.90% of the company’s stock.
A number of institutional investors have recently made changes to their positions in the business. River Road Asset Management LLC grew its holdings in Capital Southwest by 3.1% in the 4th quarter. River Road Asset Management LLC now owns 867,460 shares of the asset manager’s stock worth $14,356,000 after acquiring an additional 26,330 shares during the last quarter. Walter & Keenan Financial Consulting Co. MI ADV bought a new stake in Capital Southwest in the 4th quarter worth $149,000. Zuckerman Investment Group LLC grew its holdings in Capital Southwest by 6.9% in the 3rd quarter. Zuckerman Investment Group LLC now owns 1,356,695 shares of the asset manager’s stock worth $23,240,000 after acquiring an additional 87,408 shares during the last quarter. Advisors Asset Management Inc. grew its holdings in Capital Southwest by 272.5% in the 3rd quarter. Advisors Asset Management Inc. now owns 41,485 shares of the asset manager’s stock worth $711,000 after acquiring an additional 30,349 shares during the last quarter. Finally, New York State Common Retirement Fund grew its holdings in Capital Southwest by 12.3% in the 2nd quarter. New York State Common Retirement Fund now owns 103,139 shares of the asset manager’s stock worth $1,658,000 after acquiring an additional 11,299 shares during the last quarter. 60.02% of the stock is currently owned by institutional investors and hedge funds.
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Capital Southwest Company Profile
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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