Earnings momentum for
Medley Capital Corporation
) has increased following its strong fiscal third quarter results,
which included year-over year earnings growth of 71.4%. Continued
improvement in investment income should help this private owned
investment management firm grow profitability in the upcoming
Strong estimate revisions helped Medley Capital achieve a Zacks #1
Rank (Strong Buy) status on August 7. The stock also hit its
52-week high on August 14. In addition, a P/B multiple of just 1.0
makes this stock an attractive pick for value investors.
Impressive Fiscal Third Quarter Results
On August 2, Medley Capital reported fiscal third quarter 2012 net
investment income per share of 36 cents, topping the Zacks
Consensus Estimate of 33 cents by 9.1% and the year-ago income of
21 cents by 71.4%. The upsurge was mainly aided by growth in total
interest income, partially offset by higher operating expenses.
Net investment income climbed 72.0% year over year to $6.2 million.
However, total expenses significantly increased to $6.0 million
from $1.8 million in the year-ago period, aided by higher base
management fees, elevated incentive fees and increased general and
Earnings Estimates on an Upswing
Over the last 30 days, the Zacks Consensus Estimate for 2012
advanced 3.2% to $1.30 per share on the back of upward revisions
from five of six estimates. This implies a year-over-year growth of
132.7%. For 2013, four positive revisions out of six estimates
helped the Zacks Consensus Estimate increase 5.8% to $1.45 over the
same time frame.
Along with a P/B multiple of 1.0, Medley Capital has a forward P/E
ratio as low as 10.0. (A P/E ratio under 15.0 and a P/B ratio below
3.0 generally indicate value). Furthermore, the company's share
price has gained nearly 25.8% year-to-date.
Additionally, Medley Capital currently enjoys a dividend yield of
9.6%. The fiscal third quarter of 2012 marked the company's sixth
straight quarter with a dividend increase. Therefore, in addition
to being a value stock, the company offers an income opportunity.
The chart below clearly shows that after a plunge in September
2011, the stock is back on the recovery path.
Headquartered in New York, Medley Capital, a private owned
investment management firm invests in the public equity markets of
the United States. With $1.4 billion of assets under management in
private funds, hedge funds and via its public business development
company, the firm also operates in San Francisco, California and
Hong Kong. With a market capital of about $225 million, Medley
Capital competes with TICC Capital Corp. (
) among others.
MEDLEY CAPITAL (MCC): Free Stock Analysis
To read this article on Zacks.com click here.