Zacks Investment Research Downgrades Gladstone Capital (GLAD) to Sell

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Zacks Investment Research downgraded shares of Gladstone Capital (NASDAQ:GLAD) from a hold rating to a sell rating in a research note issued to investors on Thursday morning.

According to Zacks, “Gladstone Capital Corporation is a specialty finance company that invests in debt securities consisting primarily of senior term loans, senior subordinated loans, and junior subordinated loans in small and medium sized companies. The Company target small and medium sized private businesses that meet some or all of our criteria, including the potential for growth, adequate assets for loan collateral, experienced management teams with significant ownership interest in the business, adequate capitalization, profitable operations based on cash flow, substantial ownership by a buyout fund or a venture capital fund and potential opportunities for us to realize appreciation and gain liquidity in our equity position. “

A number of other equities research analysts have also recently commented on GLAD. BidaskClub cut shares of Gladstone Capital from a strong-buy rating to a buy rating in a report on Tuesday, August 28th. National Securities lowered shares of Gladstone Capital from a neutral rating to a sell rating and dropped their price target for the stock from $8.00 to $7.00 in a research note on Tuesday, November 6th. ValuEngine lowered shares of Gladstone Capital from a hold rating to a sell rating in a research note on Wednesday, November 28th. Finally, TheStreet lowered shares of Gladstone Capital from a b- rating to a c rating in a research note on Monday, December 10th. Two research analysts have rated the stock with a sell rating, one has given a hold rating and two have given a buy rating to the company. Gladstone Capital has a consensus rating of Hold and a consensus price target of $9.00.

Shares of NASDAQ:GLAD opened at $8.37 on Thursday. Gladstone Capital has a one year low of $7.80 and a one year high of $9.87. The company has a debt-to-equity ratio of 0.46, a current ratio of 3.67 and a quick ratio of 3.67. The stock has a market capitalization of $238.59 million, a PE ratio of 9.85 and a beta of 0.98.

Gladstone Capital (NASDAQ:GLAD) last announced its earnings results on Wednesday, November 14th. The investment management company reported $0.21 EPS for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.01). Gladstone Capital had a net margin of 41.00% and a return on equity of 9.83%. The business had revenue of $11.26 million during the quarter, compared to analysts’ expectations of $12.00 million. As a group, sell-side analysts predict that Gladstone Capital will post 0.85 EPS for the current year.

The business also recently announced a dividend, which will be paid on Monday, December 31st. Shareholders of record on Thursday, December 20th will be given a dividend of $0.07 per share. The ex-dividend date of this dividend is Wednesday, December 19th. Gladstone Capital’s payout ratio is currently 98.82%.

In related news, President Robert L. Marcotte bought 10,000 shares of the stock in a transaction on Tuesday, November 20th. The shares were bought at an average cost of $8.71 per share, for a total transaction of $87,100.00. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, President Robert L. Marcotte bought 12,000 shares of the stock in a transaction on Friday, December 7th. The shares were bought at an average price of $8.33 per share, for a total transaction of $99,960.00. Following the completion of the transaction, the president now directly owns 460,037 shares of the company’s stock, valued at approximately $3,832,108.21. The disclosure for this purchase can be found here. Insiders have acquired 22,582 shares of company stock worth $192,077 over the last 90 days. 5.89% of the stock is currently owned by company insiders.

A number of institutional investors and hedge funds have recently modified their holdings of the business. Legal & General Group Plc grew its position in Gladstone Capital by 5.4% during the second quarter. Legal & General Group Plc now owns 100,746 shares of the investment management company’s stock worth $909,000 after buying an additional 5,203 shares during the period. Van ECK Associates Corp lifted its holdings in shares of Gladstone Capital by 2.7% in the second quarter. Van ECK Associates Corp now owns 202,100 shares of the investment management company’s stock valued at $1,819,000 after purchasing an additional 5,304 shares in the last quarter. California Public Employees Retirement System lifted its holdings in shares of Gladstone Capital by 18.5% in the second quarter. California Public Employees Retirement System now owns 44,200 shares of the investment management company’s stock valued at $398,000 after purchasing an additional 6,900 shares in the last quarter. Novare Capital Management LLC lifted its holdings in shares of Gladstone Capital by 37.0% in the third quarter. Novare Capital Management LLC now owns 32,750 shares of the investment management company’s stock valued at $311,000 after purchasing an additional 8,850 shares in the last quarter. Finally, Cornerstone Wealth Management LLC lifted its holdings in shares of Gladstone Capital by 5.3% in the third quarter. Cornerstone Wealth Management LLC now owns 239,268 shares of the investment management company’s stock valued at $25,054,000 after purchasing an additional 12,030 shares in the last quarter. Institutional investors own 11.87% of the company’s stock.

About Gladstone Capital

Gladstone Capital Corporation is a private equity and a venture capital fund specializing in lower middle market, growth capital, add on acquisitions, debt investments in senior loans, second lien loans, senior subordinated loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants.

Further Reading: Why do companies issue stock splits?

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