National Securities restated their buy rating on shares of Capital Southwest Corporation (NASDAQ:CSWC) in a research note published on Thursday morning. National Securities currently has a $22.00 target price on the asset manager’s stock.
“• For fiscal 2Q18, CSWC posted core NII/share of $0.25 compared to our estimate of $0.26 and the dividend of $0.24. Earnings grew from the quarter prior despite fee income declining as the portfolio at cost grew to $279.8 million from $268.9 million Q/Q, bolstering interest income.
• We model CSWC to increase its quarterly dividend to $0.27/share for the 12/31/17 quarter before steadily increasing it by two cents each subsequent quarter.
• Management guided towards a total D/E target range of 0.70x-0.80x and CSWC finished fiscal 2Q18 at 0.19x. It is our expectation that the company can have steady but strong portfolio growth through fiscal 2H18 and 2019 without the need to issue equity. The steady portfolio growth driven by increased balance sheet leverage bodes well for increased earnings power, dividends, and ROE.
• Asset quality remains excellent with no non-accruals and we expect this to continue to be the case and drive NAV/share increases and thus strong economic returns. CSWC has very conservative underwriting criteria and leverage multiples that we believe are well below peers.
• We are revising our fiscal 2018 core NII/share estimate to $1.10 from $1.11 and our fiscal 2019 core NII/share estimate to $1.51 from $1.47.,” National Securities’ analyst wrote.
CSWC has been the subject of a number of other reports. Zacks Investment Research downgraded Capital Southwest Corporation from a hold rating to a sell rating in a research report on Wednesday, August 30th. BidaskClub raised Capital Southwest Corporation from a hold rating to a buy rating in a research report on Tuesday, August 22nd. Finally, Robert W. Baird started coverage on Capital Southwest Corporation in a research report on Wednesday, August 30th. They set an outperform rating and a $19.00 price objective for the company. Three research analysts have rated the stock with a hold rating and four have given a buy rating to the company’s stock. The company presently has a consensus rating of Buy and an average target price of $20.25.
Shares of Capital Southwest Corporation (CSWC) traded up $0.33 during trading hours on Thursday, hitting $17.32. The company had a trading volume of 15,200 shares, compared to its average volume of 23,422. The company has a quick ratio of 10.42, a current ratio of 10.41 and a debt-to-equity ratio of 0.19. The firm has a market cap of $277.45, a P/E ratio of 19.24 and a beta of -0.54. Capital Southwest Corporation has a 1 year low of $13.94 and a 1 year high of $17.76.
In other Capital Southwest Corporation news, major shareholder Moab Capital Partners Llc sold 53,270 shares of Capital Southwest Corporation stock in a transaction dated Monday, August 28th. The stock was sold at an average price of $17.30, for a total value of $921,571.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Insiders own 5.90% of the company’s stock.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Punch & Associates Investment Management Inc. grew its position in Capital Southwest Corporation by 4.7% in the 2nd quarter. Punch & Associates Investment Management Inc. now owns 1,784,841 shares of the asset manager’s stock valued at $28,700,000 after acquiring an additional 79,522 shares in the last quarter. Zuckerman Investment Group LLC grew its position in Capital Southwest Corporation by 0.6% in the 2nd quarter. Zuckerman Investment Group LLC now owns 1,269,287 shares of the asset manager’s stock valued at $20,410,000 after acquiring an additional 7,624 shares in the last quarter. Russell Investments Group Ltd. grew its position in Capital Southwest Corporation by 1.7% in the 2nd quarter. Russell Investments Group Ltd. now owns 114,753 shares of the asset manager’s stock valued at $1,846,000 after acquiring an additional 1,937 shares in the last quarter. New York State Common Retirement Fund grew its position in Capital Southwest Corporation by 12.3% in the 2nd quarter. New York State Common Retirement Fund now owns 103,139 shares of the asset manager’s stock valued at $1,658,000 after acquiring an additional 11,299 shares in the last quarter. Finally, Cove Street Capital LLC grew its position in Capital Southwest Corporation by 9.5% in the 2nd quarter. Cove Street Capital LLC now owns 95,657 shares of the asset manager’s stock valued at $1,538,000 after acquiring an additional 8,300 shares in the last quarter. 61.70% of the stock is owned by institutional investors.
Capital Southwest Corporation Company Profile
Capital Southwest Corporation is an investment company that specializes in providing customized financing to middle market companies in a range of industry segments located primarily in the United States. The Company is a specialty lending company. Its principal investment objective is to produce risk-adjusted returns by generating current income from debt investments and capital appreciation from its equity and equity related investments.
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