Oppenheimer Releases a Buy Rating on Monroe Capital

By Austin Angelo

Oppenheimer analyst Chris Kotowski reiterated a Buy rating on Monroe Capital (NASDAQ: MRCC) today and set a price target of $17. The company’s shares opened today at $15.71.

Kotowski wrote:

“While there was a little bit of noise in MRCC’s 4Q16 results that nominally brought net investment income (NII) in slightly below our estimate, Monroe’s core operations continue to run like a fine Swiss watch. For the quarter, all-in NII was $0.32 per share vs. our $0.37 forecast and the $0.35 dividend. However, “noise” in the form of capital gains, incentive fees, and excise tax penalized the bottom line by $0.03. Thus, adjusted net investment income of $0.35 per share covered the dividend and was only modestly short of our expectations. This shortfall in turn was driven just by the fact that dividend income, inherently lumpy, was just $251,000 in the just-reported quarter vs. an average of $1.43M in the prior three.”

According to TipRanks.com, Kotowski is a 5-star analyst with an average return of 9.1% and a 64.7% success rate. Kotowski covers the Financial sector, focusing on stocks such as Apollo Global Management LLC, Fidus Investment Corporation, and Solar Senior Capital Ltd.

Monroe Capital has an analyst consensus of Moderate Buy, with a price target consensus of $17.

Monroe Capital’s market cap is currently $261.8M and has a P/E ratio of 9.99. The company has a book value ratio of 1.0949.

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Monroe Capital Corp. is a business development company that invests in lower middle-market companies with an EBITDA of up to $25 million and revenues of up to $250 million located in the US and Canada. The fund invests across a broad range of sectors including healthcare & pharmaceuticals, business services, durable & non-durable consumer goods, retail, media, advertising, printing & publishing, automotive, high tech industries, banking, finance, insurance, real, hotels, gaming & leisure, oil & gas, capital equipment, telecommunications, consumer services, beverage, food & tobacco, containers, packaging & glass, chemicals, plastics & rubber, construction and building. It provides senior, junior, and mezzanine debt and equity co-investments for recapitalization, refinancing, acquisition and expansion capital requirements with an investment size ranging between $2 million and $15 million each. It makes minority equity co-investments.