TICC Capital (NASDAQ:TICC) was downgraded by National Securities from a “neutral” rating to a “sell” rating in a note issued to investors on Monday. They currently have a $5.00 target price on the investment management company’s stock. National Securities’ price objective suggests a potential downside of 21.14% from the stock’s previous close.
The analysts wrote, “• We had previously upgraded TICC shares to NEUTRAL from SELL despite lowering our price target to $5 from $6 subsequent to the 3Q17 earnings release and 10-Q.
• With TICC shares running up significantly since this upgrade, we now feel it is necessary for us to downgrade shares to SELL from NEUTRAL.
• In 1Q17, the quarterly dividend was reduced from $0.29/share to $0.20/share. We expect the quarterly dividend to be reduced to $0.12/share in 1Q18. While we expect core NII to be above this level, we note that the company’s GAAP NII should be modestly above this new level.
• While we model estimated additional taxable income and CLO yields to improve significantly Y/Y for 2018 as we expect renewed loan market volatility and lower reset and refinance costs not eating into core earnings as much, we note that TICC will want to preserve as much NAV as possible as the volatility should materially lower NAV/share despite boosting earnings.
• Our biggest contention with TICC has been, and continues to be, that the company has increasingly put 2nd lien club deals in its portfolio and maintained a heavy CLO equity concentration. The market has demonstrated repeatedly that it discounts BDCs holding CLO equity, while pure play structured credit vehicles get consistent NAV premiums. When NAV declines during the volatility we model, the market will likely sell shares off heavily despite increased cash flow economics.
• While we do not value any BDC or RIC off yield, it would make sense that our $5 target implies a forward yield of 9.6% which is adequate for CLO equity and higher yielding 2nd lien club deals, in our opinion.
• We are making no changes to our core NII/share estimate for 2017 of $0.78 and our 2018 core NII/share estimate of $0.95.”
Several other equities research analysts have also recently weighed in on TICC. ValuEngine cut shares of TICC Capital from a “buy” rating to a “hold” rating in a research report on Thursday, November 2nd. Zacks Investment Research cut shares of TICC Capital from a “hold” rating to a “sell” rating in a research report on Wednesday, November 8th. Ladenburg Thalmann Financial Services upgraded shares of TICC Capital from a “neutral” rating to a “buy” rating in a research report on Monday, November 6th. Finally, TheStreet upgraded shares of TICC Capital from a “c+” rating to a “b” rating in a research report on Thursday, September 7th. Five research analysts have rated the stock with a sell rating and two have issued a buy rating to the stock. The company currently has an average rating of “Hold” and a consensus price target of $5.50.
Shares of TICC Capital (NASDAQ TICC) traded up $0.02 during trading hours on Monday, reaching $6.34. 315,548 shares of the company’s stock traded hands, compared to its average volume of 322,675. The company has a debt-to-equity ratio of 0.41, a current ratio of 19.74 and a quick ratio of 19.74. TICC Capital has a twelve month low of $5.17 and a twelve month high of $8.19. The stock has a market capitalization of $325.35, a P/E ratio of 11.09, a P/E/G ratio of 2.22 and a beta of 0.65.
TICC Capital (NASDAQ:TICC) last released its earnings results on Thursday, November 2nd. The investment management company reported $0.13 EPS for the quarter, missing the consensus estimate of $0.16 by ($0.03). TICC Capital had a return on equity of 7.64% and a net margin of 94.98%. The company had revenue of $14.50 million during the quarter, compared to analysts’ expectations of $15.97 million. During the same period last year, the firm posted $0.30 EPS. TICC Capital’s quarterly revenue was down 19.9% compared to the same quarter last year. research analysts expect that TICC Capital will post 0.57 EPS for the current year.
In other TICC Capital news, COO Saul B. Rosenthal acquired 5,835 shares of the stock in a transaction that occurred on Wednesday, November 8th. The stock was bought at an average cost of $5.99 per share, with a total value of $34,951.65. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Jonathan H. Cohen acquired 53,316 shares of the stock in a transaction that occurred on Wednesday, November 8th. The stock was acquired at an average cost of $5.92 per share, with a total value of $315,630.72. The disclosure for this purchase can be found here. Insiders have bought 141,700 shares of company stock valued at $843,621 over the last three months. Insiders own 5.90% of the company’s stock.
Large investors have recently added to or reduced their stakes in the stock. Virtu KCG Holdings LLC lifted its position in shares of TICC Capital by 90.8% during the second quarter. Virtu KCG Holdings LLC now owns 40,996 shares of the investment management company’s stock valued at $260,000 after buying an additional 19,510 shares during the last quarter. Dynamic Technology Lab Private Ltd lifted its position in shares of TICC Capital by 444.1% during the second quarter. Dynamic Technology Lab Private Ltd now owns 126,523 shares of the investment management company’s stock valued at $802,000 after buying an additional 103,270 shares during the last quarter. Blair William & Co. IL lifted its position in shares of TICC Capital by 0.7% during the second quarter. Blair William & Co. IL now owns 130,760 shares of the investment management company’s stock valued at $829,000 after buying an additional 900 shares during the last quarter. Morgan Stanley lifted its position in shares of TICC Capital by 7.9% during the first quarter. Morgan Stanley now owns 334,494 shares of the investment management company’s stock valued at $2,468,000 after buying an additional 24,554 shares during the last quarter. Finally, Van ECK Associates Corp lifted its position in shares of TICC Capital by 6.7% during the second quarter. Van ECK Associates Corp now owns 419,844 shares of the investment management company’s stock valued at $2,662,000 after buying an additional 26,181 shares during the last quarter. 16.17% of the stock is owned by institutional investors.
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TICC Capital 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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