Rising earnings estimates on the back of strong second quarter
results - including a 48.2% earnings surprise - have helped
TICC Capital Corp.
) achieve a Zacks #1 Rank (Strong Buy) on August 30. Moreover, this
non-diversified management investment company has delivered an
average surprise of 28.2% over the past four quarters.
With a solid year-to-date return of 19.8% and a history of beating
quarterly earnings estimates, this stock offers an attractive
The Rank Driver
Better-than-expected second-quarter earnings and steady improvement
in investment portfolio are the primary rank drivers for this
stock. Moreover, continued improvement in investment income will
help improve its profitability in the upcoming quarters.
On July 30, TICC Capital reported second-quarter 2012 net
investment income of 40 cents per share, outpacing the Zacks
Consensus Estimate of 27 cents by 48.2% and the year-ago earnings
of 29 cents by 37.9%.
Second-quarter results were aided by impressive growth in total
investment income. Nevertheless, considerably high expenses
marginally marred the results.
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TICC CAPITAL CP (TICC): Free Stock Analysis
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Total investment income of $20.5 million surged 83.8% from the
year-ago quarter. Significantly higher (almost 87%) total
investment income from non-affiliated/non-control investments was
primarily responsible for the surge.
Total expenses were $5.4 million, increasing significantly from
$1.6 million in the prior-year quarter. The leap in the expenses
was mainly due to higher incentive fees and investment advisory
The fair value of TICC Capital's total investment portfolio was
$439.2 million as of June 30, 2012, up 12.2% from $391.5 million as
of December 31, 2011. During the second quarter, the company
provided approximately $62.1 million debt funding to new and
existing portfolio companies.
Raising Earnings Estimate
The Zacks Consensus Estimate for 2012 increased 5.4% to $1.18 per
share based on one out of three upward estimate revisions over the
last 30 days. The current estimate implies a year-over-year growth
For 2013, two out of five estimates were revised upward over the
same time frame, lifting the Zacks Consensus Estimate by 5.3% to
$1.19 per share.
TICC Capital currently trades at a forward P/E of 8.8x, an 11.7%
discount to the peer group average of 9.9x. Also, on a
price-to-book basis, the shares are trading at 1.09x, a 13.5%
premium to the peer group average of 0.96x. Given the company's
strong fundamentals, the valuation looks reasonable.
TICC Capital has a trailing 12-month ROE of 13.0% compared with the
peer group average of 7.9%.
About the Company
Headquartered in Greenwich, Connecticut, TICC Capital is largely
engaged in providing finance to technology-related companies. The
company primarily focuses on investments in companies with annual
revenues of less than $200 million and a market capitalization or
enterprise value of less than $300 million. Incorporated in July
2003, the company started trading on NASDAQ from November 2003. It
has a market capitalization of roughly $391.1 million.
Other Zacks #1 Rank bank stocks include
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Berkshire Hills Bancorp Inc.