Horizon Technology Finance Corporation’s (HRZN) “Sell” Rating Reiterated at National Securities
Horizon Technology Finance Corporation (NASDAQ:HRZN)‘s stock had its “sell” rating reiterated by National Securities in a research note issued on Thursday. They presently have a $10.00 target price on the investment management company’s stock. National Securities’ price target would suggest a potential downside of 5.21% from the stock’s previous close.
The analysts wrote, “• HRZN posted NII/share of $0.33 versus consensus estimates of $0.27 and our own estimate of $0.25. We projected no prepayment income ($0.03/share impact) and a higher incentive fee ($0.02/share impact). We note that interest income was substantially higher despite the portfolio at cost decreasing Q/Q to $188.0 million from $189.6 million. This is due to the acceleration of ETP (end-of-term payments) pertaining to the prepaid loans. The accelerated ETP was roughly $0.09/share.
• While HRZN, like most BDCs, has lumpy income especially when looking at fee and prepayment income as well as OID (or in this case ETP) acceleration, this quarter specifically was not as strong as the stock price reaction would indicate, in our opinion. We are unsure of whether shares rallied on the earnings beat loaded with lumpy and unpredictable items, no further non-accruals, or a combination of both. Nonetheless, our investment thesis remains unchanged.
• HRZN will likely remain underleveraged and unable to achieve adequate ROE to meet the current quarterly dividend of $0.30/share, including if asset quality turns around and then the incentive fee is earned in full, as we see it.
• We are revising our 2017 NII/share estimate to $1.12 from $1.04 and are maintaining our 2018 NII/share estimate of $1.05.”
Several other research firms also recently issued reports on HRZN. Keefe, Bruyette & Woods reaffirmed a “hold” rating and set a $11.00 price objective on shares of Horizon Technology Finance Corporation in a report on Tuesday, July 25th. Compass Point reaffirmed a “sell” rating and set a $10.00 price objective on shares of Horizon Technology Finance Corporation in a report on Thursday, July 6th. ValuEngine raised shares of Horizon Technology Finance Corporation from a “hold” rating to a “buy” rating in a report on Monday, October 2nd. Zacks Investment Research downgraded shares of Horizon Technology Finance Corporation from a “hold” rating to a “sell” rating in a report on Wednesday, October 4th. Finally, Raymond James Financial, Inc. reaffirmed an “underperform” rating on shares of Horizon Technology Finance Corporation in a report on Thursday, August 3rd. Four investment analysts have rated the stock with a sell rating, three have assigned a hold rating and two have issued a buy rating to the company’s stock. The company has an average rating of “Hold” and a consensus price target of $10.75.
Horizon Technology Finance Corporation (NASDAQ:HRZN) last posted its quarterly earnings data on Tuesday, October 31st. The investment management company reported $0.33 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.29 by $0.04. The business had revenue of $6.77 million during the quarter, compared to the consensus estimate of $6.39 million. Horizon Technology Finance Corporation had a net margin of 24.46% and a return on equity of 9.92%.
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Institutional investors have recently modified their holdings of the business. Wells Fargo & Company MN boosted its holdings in Horizon Technology Finance Corporation by 2.2% in the 1st quarter. Wells Fargo & Company MN now owns 65,616 shares of the investment management company’s stock valued at $730,000 after purchasing an additional 1,414 shares during the period. WFG Advisors LP boosted its holdings in Horizon Technology Finance Corporation by 30.8% in the 2nd quarter. WFG Advisors LP now owns 24,950 shares of the investment management company’s stock valued at $283,000 after purchasing an additional 5,878 shares during the period. Investment Centers of America Inc. bought a new stake in Horizon Technology Finance Corporation in the 2nd quarter valued at $136,000. West Family Investments Inc. boosted its holdings in Horizon Technology Finance Corporation by 49.0% in the 2nd quarter. West Family Investments Inc. now owns 158,628 shares of the investment management company’s stock valued at $1,866,000 after purchasing an additional 52,156 shares during the period. Finally, Royal Bank of Canada boosted its holdings in Horizon Technology Finance Corporation by 25.8% in the 2nd quarter. Royal Bank of Canada now owns 20,752 shares of the investment management company’s stock valued at $235,000 after purchasing an additional 4,252 shares during the period. 18.12% of the stock is owned by hedge funds and other institutional investors.
About Horizon Technology Finance Corporation
Horizon Technology Finance Corporation is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objective is to maximize investment portfolio’s total return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments.
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