Garrison Capital Inc. (GARS) Rating Reiterated by National Securities
Garrison Capital Inc. (NASDAQ:GARS)‘s stock had its “neutral” rating restated by analysts at National Securities in a research report issued to clients and investors on Monday. They presently have a $10.00 target price on the investment management company’s stock. National Securities’ price objective would suggest a potential upside of 21.65% from the company’s previous close.
The analysts wrote, “• Non-accruals at cost increased to $36.2 million or 9.5% of the portfolio from $31.2 million or 8.3% of the portfolio linked Q/Q. Rooster Energy was placed on non-accrual with a cost of $5.0 million, Walnut Hill and Badlands were written-down further as well. This lead to a 1.3% Q/Q decline in NAV/share to $11.75, generating an economic return (annualized) of only 4.3%.
• We think Garrison’s focus on the UMM and unwillingness to do repurchases will get the stock a lower valuation. Aside from the lower yields that come with the UMM loans, Garrison is purchasing a significant amount of lightly syndicated and club deals in this segment of the market. The more a BDC tends to purchase assets as opposed to directly originate them, the lower the valuation of said BDC becomes. Additionally, with the stock at a 31% NAV discount and current dividend yield of 13.9%, we fail to see how management can justify doing more of these purchases as opposed to allowing repayments to free up cash and complete substantial repurchases. While we respect management, we cannot fathom why they are doing what they are doing here.
• We are revising our 2017 adjusted NII/share estimate to $1.11 from $1.10 and our 2018 adjusted NII/share estimate to $1.01 from $1.09. “
Other equities research analysts also recently issued reports about the company. Maxim Group reissued a “buy” rating and issued a $10.50 target price on shares of Garrison Capital in a report on Thursday, May 11th. Zacks Investment Research raised Garrison Capital from a “strong sell” rating to a “hold” rating in a report on Wednesday, July 19th. ValuEngine downgraded Garrison Capital from a “buy” rating to a “hold” rating in a report on Friday, June 2nd. CIBC downgraded Garrison Capital from an “outperform” rating to a “market perform” rating in a report on Friday, May 12th. Finally, Oppenheimer Holdings, Inc. reissued a “market perform” rating on shares of Garrison Capital in a report on Friday, May 12th. Six equities research analysts have rated the stock with a hold rating, one has given a buy rating and one has issued a strong buy rating to the stock. The company has an average rating of “Hold” and a consensus target price of $9.94.
Garrison Capital (GARS) opened at 8.22 on Monday. Garrison Capital has a 52 week low of $7.77 and a 52 week high of $10.98. The firm’s 50-day moving average price is $8.15 and its 200 day moving average price is $9.07.
Garrison Capital (NASDAQ:GARS) last released its earnings results on Tuesday, August 8th. The investment management company reported $0.29 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $0.27 by $0.02. Garrison Capital had a positive return on equity of 8.33% and a negative net margin of 0.38%. The business had revenue of $9.03 million for the quarter, compared to the consensus estimate of $9.08 million. Analysts forecast that Garrison Capital will post $1.10 EPS for the current year.
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In other Garrison Capital news, CFO Brian S. Chase purchased 4,000 shares of the stock in a transaction dated Friday, August 11th. The shares were purchased at an average cost of $8.07 per share, with a total value of $32,280.00. Following the completion of the acquisition, the chief financial officer now directly owns 46,135 shares in the company, valued at approximately $372,309.45. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Over the last ninety days, insiders have bought 7,010 shares of company stock worth $57,786. Corporate insiders own 5.80% of the company’s stock.
Hedge funds and other institutional investors have recently made changes to their positions in the stock. Goldman Sachs Group Inc. acquired a new position in shares of Garrison Capital during the second quarter worth about $129,000. Alpine Woods Capital Investors LLC increased its position in shares of Garrison Capital by 81.8% in the second quarter. Alpine Woods Capital Investors LLC now owns 20,000 shares of the investment management company’s stock worth $165,000 after buying an additional 9,000 shares during the last quarter. Stephens Inc. AR increased its position in shares of Garrison Capital by 14.1% in the first quarter. Stephens Inc. AR now owns 21,607 shares of the investment management company’s stock worth $211,000 after buying an additional 2,673 shares during the last quarter. Baird Financial Group Inc. increased its position in shares of Garrison Capital by 1.3% in the first quarter. Baird Financial Group Inc. now owns 53,650 shares of the investment management company’s stock worth $525,000 after buying an additional 700 shares during the last quarter. Finally, Oppenheimer & Co. Inc. increased its position in shares of Garrison Capital by 35.6% in the second quarter. Oppenheimer & Co. Inc. now owns 53,727 shares of the investment management company’s stock worth $444,000 after buying an additional 14,093 shares during the last quarter. 22.55% of the stock is currently owned by hedge funds and other institutional investors.
Garrison Capital Company Profile
Garrison Capital Inc is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount.
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