American Capital Upped to Strong Buy - Analyst Blog
08 4월 2013 - 5:50PM
Zacks
On Apr 6, Zacks Investment Research upgraded American
Capital Ltd. (ACAS) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Better-than-expected fourth-quarter results, improving credit
quality and enhanced asset coverage ratio are the primary rank
drivers for this stock. Moreover, this well-known private equity
and venture capital firm delivered an average earnings surprise of
37.4% in the last four quarters.
American Capital reported fourth-quarter results on Feb 11.
Earnings per share came in at 26 cents, beating the Zacks Consensus
Estimate by a penny but significantly lower than the prior-year
quarter’s earnings of 67 cents.
Positive results were attributable to top-line growth, followed by
decreased operating expenses reflecting prudent expense management.
Moreover, new investments and reduction of debt acted as
positives.
As of Dec 31, 2012, non-accrual loans were $177 million,
representing 9% of total loans at fair value, down from $252
million of non-accrual loans, indicating 12.5% of total loans at
fair value, as of Sep 30, 2012. Moreover, American Capital’s asset
coverage ratio improved substantially to 801% at the end of 2012
from 465% in the prior year.
Moreover, American Capital is expected to announce its
first-quarter 2013 results on Apr 29. The Zacks Consensus Estimate
for the quarter is 28 cents per share. The Zacks Earnings ESP
(Read: Zacks Earnings ESP: A Better Method) for the company is
+21.4% for the first quarter. This, along with its Zacks Rank #1
(Strong Buy), make us confident regarding a positive earnings
surprise call.
Other Stocks to Consider
Among peers of American Capital, NewStar Financial,
Inc. (NEWS), KCAP Financial Inc. (KCAP)
and Medallion Financial Corp. (TAXI) carry a Zacks
Rank #2 (Buy).
AMER CAP LTD (ACAS): Free Stock Analysis Report
KCAP FINL INC (KCAP): Free Stock Analysis Report
NEWSTAR FIN INC (NEWS): Free Stock Analysis Report
MEDALLION FINL (TAXI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
American Capital Strategies (NASDAQ:ACAS)
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