logo
  Join        Login             Stock Quote

Whitehorse Finance (WHF) Initiated At 'Buy' By Deutsche Bank

 January 04, 2013 01:48 PM


(By Balaseshan) Deutsche Bank analyst Stephen Laws initiated coverage of WhiteHorse Finance Inc. (NASDAQ: WHF) with a "Buy" rating and $16.50 price target, expecting new investments to drive sequential net investment income growth in 2013.

Laws expects net investment income (NII) to grow in 2013 as WHF deploys its IPO capital into new debt investments in small cap companies.

The analyst expects WHF to benefit from the upcoming debt maturity wall, which he expects to provide WHF with attractive new investment opportunities, as well as the experience of its Manager, which has access to 78 investment professionals focused on small cap debt investments.

In December, WHF priced an IPO of 6.7 million shares and a concurrent private placement of 0.5 million shares, raising gross proceeds of $100 million. The contributed investment portfolio totaled $198 million, and shares outstanding post-deal is roughly 15.0 million, Laws noted. The new capital will be used to fund new investments, which he expects to drive sequential NII growth in 2013.

Laws said his price target of $16.50 per share is based on shares trading at 110% of net asset value (NAV). His target is based on applying a 10% premium to post-IPO NAV of $15 per share. Historically, BDCs have traded in a range of 30% to over 200%; however, the current range is roughly 70%-120%.

The analyst believes his multiple is appropriate given WHF's origination capabilities, the opportunity in the small cap sector, his return expectations, and management's experience in structuring and originating leveraged debt investments, while acknowledging the risks in deploying the IPO capital.

WHF is trading up 0.34% at $14.95 on Friday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageMBIA Inc. (MBI) : BTI's $12 a Tough Task

MBIA Inc. (NYSE:MBI) is doing well on a day stocks are struggling The guarantee insurance company is the read on...

article imageUrban Outfitters, Inc. (URBN) Q2 Earnings Preview: A Snug Fit

Urban Outfitters, Inc. (NASDAQ:URBN) will hold a webcast to discuss its second quarter of fiscal-year 2015 read on...

article imageEstee Lauder Companies Inc. (EL) Q4 Earnings Preview: Options Player Betting On EL’s EPS Looking Pretty

Estee Lauder Companies Inc. (NYSE:EL) will release fiscal 2014 fourth quarter and full year financial read on...

article imageHerbalife Ltd. (HLF): 3 Reasons To Pay Attention to Recent Insider Buying

Well, well, well… it looks as if boardroom buyers viewed the recent selloff as an opportunity to buy. read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Recent Articles by Balaseshan
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.