On Mar 4, Zacks Investment Research upgraded
Main Street Capital Corporation
) to a Zacks Rank #1 (Strong Buy).
APOLLO INV CP (AINV): Free Stock Analysis
GLADSTONE INVES (GAIN): Free Stock Analysis
HORIZON TECHNOL (HRZN): Free Stock Analysis
MAIN STREET CAP (MAIN): Free Stock Analysis
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Why the Upgrade?
Main Street Capital, which is in the diversified investments
space, has witnessed positive estimate revisions on the back of
strong fourth-quarter 2013 results. Further, the company has
delivered positive earnings surprises in 3 of the 4 quarters of
On Feb 27, Main Street Capital reported its fourth-quarter and
full year 2013 results. Net investment income per share in
the reported quarter came in at 57 cents, beating the Zacks
Consensus Estimate by 5.6%. Results benefited from top-line
growth and strong portfolio investment activities.
Total investment income increased 27.6% year over year to $33.4
million. This was primarily driven by higher interest, fee and
dividend income from control investments.
However, total expenses rose 31.4% to $10.6 million.
As of Dec 31, 2013, total portfolio investments stood at around
$1.3 billion, reflecting a year-over-year rise of 39.1%. Further,
net asset value per share was up 7.0% year over year to $19.89.
During the quarter, Main Street Capital continued with its
strategic portfolio investment activities. The company exited
from investments made in the Van Gilder Insurance Corporation,
garnering 1.4 times the amount of debt and equity invested in the
company. Further, Main Street Capital strengthened its lower
middle market portfolio with $60.6 million investments.
Main Street Capital's interest expense is expected to gradually
decrease in the upcoming quarters as the company restructured its
credit facility during 2013. With the amendment, the limit
increased to $445.0 million from $287.5 million at Dec 31, 2012
and lowered interest rate to LIBOR plus 2.25%. Further, with the
extension of the term to 5 years, the revolving credit facility
is now set to mature on Sep 2018 from the earlier stated maturity
in Sep 2017.
Additionally, the Zacks Consensus Estimate for 2014 increased
0.4% to $2.33 per share.
Other Stocks to Consider
Other stocks in this space worth considering include
Apollo Investment Corporation
Horizon Technology Finance Corporation
Gladstone Investment Corporation
). All these stocks hold a Rank #2 (Buy).