TICC Capital Corp. (TICC) Upgraded at National Securities
National Securities upgraded shares of TICC Capital Corp. (NASDAQ:TICC) from a sell rating to a neutral rating in a report released on Monday. National Securities currently has $5.00 price target on the investment management company’s stock, down from their prior price target of $6.00.
“• TICC posted core NII/share of $0.13 for 3Q17, dramatically lower than our estimate of $0.21. CLO equity estimated additional taxable income, or effectively excess cash flow from CLO equity over what is recognized under GAAP and treated as a reduction to amortized cost, collapsed to $47,000 for 3Q17 from $1.7 million Q/Q. We note that we had estimated additional taxable income of $2.7 million for 3Q17, but yields on CLO equity at cost collapsed by 970 bps Q/Q to 15.9%.
• Management attributed the collapse in cash yields to a combination of spread compression and one-time refinancing-related expenses. When we asked how big of a contributor the latter was, management indicated it was significant but we didn’t get a quantitative break-down. Nonetheless, we expect the refinances completed during the quarter will cause positive effective yield recalibrations for 4Q17 and expect both GAAP CLO equity income and estimated additional taxable income to improve Q/Q.
• We model the quarterly dividend to be cut substantially in 1Q18 to $0.12/share from $0.20/share. We do not think TICC can sustainably continue to pay out more than it is earning on a GAAP NII basis as it will only weigh on NAV. This was a point of contention we had with management on the earnings call, whereupon management was trying to explain this wasn’t the case because NAV had been so strong. However, we note that NAV increases were largely driven by tightening credit spreads and positive fair value impact of this on CLO equity, which has been the primary driver of NAV increases. Since 1Q16, the NAV trough of the past several years, distributions in excess of NII increased from $41.1 million to $48.7 million as 9/30/17.
• We are revising our core NII/share estimate for 2017 to $0.78 from to $0.96 and our 2018 core NII/share estimate to $0.95 from $1.06.,” the firm’s analyst commented.
A number of other research analysts also recently issued reports on TICC. ValuEngine downgraded shares of TICC Capital Corp. from a buy rating to a hold rating in a research report on Thursday, November 2nd. Ladenburg Thalmann Financial Services upgraded shares of TICC Capital Corp. from a neutral rating to a buy rating in a research report on Monday. TheStreet upgraded shares of TICC Capital Corp. from a c+ rating to a b rating in a research report on Thursday, September 7th. BidaskClub downgraded shares of TICC Capital Corp. from a sell rating to a strong sell rating in a research report on Tuesday, July 25th. Finally, Zacks Investment Research downgraded shares of TICC Capital Corp. from a buy rating to a hold rating in a research report on Tuesday, July 11th. Four equities research analysts have rated the stock with a sell rating, one has issued a hold rating and two have issued a buy rating to the company. The company currently has a consensus rating of Hold and an average price target of $5.50.
Shares of TICC Capital Corp. (TICC) traded up $0.06 during mid-day trading on Monday, reaching $6.04. 12,389 shares of the company’s stock traded hands, compared to its average volume of 349,680. The firm has a market cap of $307.33, a price-to-earnings ratio of 10.47, a P/E/G ratio of 2.09 and a beta of 0.66. The company has a debt-to-equity ratio of 0.41, a quick ratio of 19.74 and a current ratio of 19.74. TICC Capital Corp. has a 52 week low of $5.17 and a 52 week high of $8.19.
TICC Capital Corp. (NASDAQ:TICC) last announced its quarterly earnings data on Thursday, November 2nd. The investment management company reported $0.13 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.16 by ($0.03). The company had revenue of $14.50 million for the quarter, compared to analyst estimates of $15.97 million. TICC Capital Corp. had a return on equity of 7.64% and a net margin of 94.98%. TICC Capital Corp.’s revenue was down 19.9% on a year-over-year basis. During the same period in the prior year, the business earned $0.30 earnings per share. equities research analysts predict that TICC Capital Corp. will post 0.57 earnings per share for the current fiscal year.
The firm also recently declared a quarterly dividend, which will be paid on Friday, December 29th. Stockholders of record on Friday, December 15th will be given a $0.20 dividend. The ex-dividend date of this dividend is Thursday, December 14th. This represents a $0.80 dividend on an annualized basis and a dividend yield of 13.25%. TICC Capital Corp.’s payout ratio is currently 68.38%.
In other news, insider Saul B. Rosenthal acquired 10,021 shares of the business’s stock in a transaction that occurred on Tuesday, August 22nd. The shares were purchased at an average cost of $6.66 per share, for a total transaction of $66,739.86. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Jonathan H. Cohen acquired 53,316 shares of the business’s stock in a transaction that occurred on Wednesday, November 8th. The stock was purchased at an average price of $5.92 per share, for a total transaction of $315,630.72. The disclosure for this purchase can be found here. Over the last 90 days, insiders bought 148,953 shares of company stock worth $927,294. Insiders own 5.90% of the company’s stock.
A number of large investors have recently modified their holdings of TICC. Legal & General Group Plc lifted its position in TICC Capital Corp. by 4.5% in the 1st quarter. Legal & General Group Plc now owns 120,128 shares of the investment management company’s stock valued at $886,000 after purchasing an additional 5,210 shares during the last quarter. Morgan Stanley lifted its position in TICC Capital Corp. by 7.9% in the 1st quarter. Morgan Stanley now owns 334,494 shares of the investment management company’s stock valued at $2,468,000 after purchasing an additional 24,554 shares during the last quarter. KCG Holdings Inc. lifted its position in TICC Capital Corp. by 66.5% in the 1st quarter. KCG Holdings Inc. now owns 21,486 shares of the investment management company’s stock valued at $159,000 after purchasing an additional 8,578 shares during the last quarter. Tudor Investment Corp ET AL lifted its position in TICC Capital Corp. by 8.8% in the 1st quarter. Tudor Investment Corp ET AL now owns 33,287 shares of the investment management company’s stock valued at $246,000 after purchasing an additional 2,689 shares during the last quarter. Finally, Bank of Montreal Can bought a new stake in TICC Capital Corp. in the 2nd quarter valued at about $2,390,000. Hedge funds and other institutional investors own 17.44% of the company’s stock.
TICC Capital Corp. Company Profile
TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans.
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