Apollo Investment (AINV) Earns “Neutral” Rating from National Securities
National Securities reiterated their neutral rating on shares of Apollo Investment (NASDAQ:AINV) in a report issued on Thursday. The brokerage currently has a $6.00 price target on the asset manager’s stock.
“• Apollo posted NII/share of $0.16, matching our estimate exceeding the quarterly dividend by a penny. We expect this to be the run rate of earnings until fiscal 2H19 when we expect a reduction in funding costs will provide a tailwind for NIM.
• The company has continued to make progress in rotating into its “core” strategies which include traditional middle market lending to sponsor-backed companies, lender finance, asset-based lending (ABL), and life sciences lending. The company made $198.4 million of investments during the quarter, of which $94.0 million were co-investments across the Apollo platform. Continuing to leverage the Apollo platform will likely win AINV more favorable sponsor investments and using MidCap and other non-middle market based lending strategies should help to offset pricing pressure on the portfolio.
• Apollo’s three energy investments were all marked up Q/Q as a result of favorable price movements in crude oil. Unrealized losses pertaining to energy investments decreased to $33.3 million from $40.1 million Q/Q. Oil and gas continues to comprise a decent amount of AINV’s portfolio at cost and as of 12/31/17 it was $206.2 million or 8.6% of the portfolio.
• Subsequent to quarter-end, AINV was repaid on a significant portion of its first lien debt investment in Solarplicity Group Ltd slightly below 12/31/17 fair value marks, which furthers the company’s efforts into rotating into core strategies and should also reduce PIK income significantly. We think this large repayment will drive net portfolio contraction in fiscal 4Q18 before we model net portfolio growth through fiscal 2019.
• We are revising our fiscal 2018 NII/share estimate to $0.62 from $0.63 and our fiscal 2019 NII/share estimate to $0.66 from $0.67. ,” the firm’s analyst commented.
Several other equities research analysts have also issued reports on the company. BidaskClub raised Apollo Investment from a strong sell rating to a sell rating in a research note on Friday, February 2nd. ValuEngine raised Apollo Investment from a hold rating to a buy rating in a research note on Friday, December 1st. TheStreet raised Apollo Investment from a c rating to a b- rating in a research note on Thursday, November 16th. BMO Capital Markets reaffirmed a hold rating and issued a $6.00 price objective on shares of Apollo Investment in a research note on Wednesday, November 15th. Finally, Raymond James Financial raised Apollo Investment from a market perform rating to an outperform rating and set a $7.00 price objective for the company in a research note on Tuesday, November 7th. Two research analysts have rated the stock with a sell rating, five have assigned a hold rating and six have issued a buy rating to the company. Apollo Investment currently has an average rating of Hold and an average price target of $6.38.
Apollo Investment (NASDAQ:AINV) last announced its quarterly earnings results on Wednesday, February 7th. The asset manager reported $0.16 EPS for the quarter, meeting analysts’ consensus estimates of $0.16. The company had revenue of $64.75 million during the quarter, compared to analyst estimates of $65.94 million. Apollo Investment had a return on equity of 9.45% and a net margin of 28.18%. The firm’s revenue was down 4.9% on a year-over-year basis. During the same period in the prior year, the company earned $0.17 earnings per share. equities analysts anticipate that Apollo Investment will post 0.62 EPS for the current year.
The firm also recently declared a quarterly dividend, which will be paid on Thursday, April 12th. Investors of record on Tuesday, March 27th will be paid a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 11.32%. The ex-dividend date is Monday, March 26th. Apollo Investment’s dividend payout ratio is currently 176.47%.
Several hedge funds have recently modified their holdings of AINV. Rhumbline Advisers lifted its stake in shares of Apollo Investment by 0.3% during the 2nd quarter. Rhumbline Advisers now owns 16,708 shares of the asset manager’s stock worth $107,000 after acquiring an additional 58 shares during the last quarter. Cubist Systematic Strategies LLC bought a new stake in shares of Apollo Investment during the 3rd quarter worth approximately $108,000. HighTower Advisors LLC lifted its stake in shares of Apollo Investment by 8.8% during the 2nd quarter. HighTower Advisors LLC now owns 17,884 shares of the asset manager’s stock worth $115,000 after acquiring an additional 1,451 shares during the last quarter. The Manufacturers Life Insurance Company lifted its stake in shares of Apollo Investment by 0.9% during the 2nd quarter. The Manufacturers Life Insurance Company now owns 18,016 shares of the asset manager’s stock worth $115,000 after acquiring an additional 168 shares during the last quarter. Finally, Murphy Middleton Hinkle & Parker Inc. bought a new stake in shares of Apollo Investment during the 4th quarter worth approximately $156,000. 46.51% of the stock is owned by hedge funds and other institutional investors.
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About Apollo Investment
Apollo Investment Corporation is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation. It invests primarily in various forms of debt investments, including secured and unsecured debt, loan investments and/or equity in private middle-market companies.
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