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Horizon Technology Finance Corporation Message Board

  • slcehamrick slcehamrick Nov 7, 2012 5:01 PM Flag

    Good Bye 45 cents per quarter?

    Management made it clear that if they don't get some capital gains in the next quarter or two the 45 cent divvy is toast. Looks like they can sustain 30 cents. Sold half my position but priced collapsed before I could get out of the other half. Will try to sell on strength.

    Been a shareholder since the IPO with a couple of trading gaps. Their expense structure is just to high.

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    • Still likely to get 2 to 3 more quarters at 45 cents then Stifel has new dividend rate at .37 - .39. If you pick the middle or .38 x 4 = 1.52, At current prices you have + 10% yield plus you stock goes ex divi 11/14, so you are really buying shares at 14.57 for a future yield of 10.4% on todays cost. In line with BDC peers. Historically they have had enough capital gains from warrant portfolio to offset the Satcoms. Seems like a reasonable risk, Not a screaming buy but if you still hold shares I would hold on at this point.

    • Why all the insider buys May-Sept, 2012? Would insiders have purchased shares if they knew the .45 dividend was in jeopardy...

    • The earnings transcript reports that $0.23/share remains from the $0.91/share capital gains realized in Q4 2011. So they only need to earn $0.22 in the current quarter to be able to cover the Q1 dividend next year. With a larger investment portfolio going forward likelihood of more capital gains sooner increases. I doubled up at today's fire-sale prices, the history of this stock shows that bargain stock prices do not persist for more than a few days.

      • 1 Reply to krishak5
      • I wish you well on that purchase. A larger portfolio does not really benefit the shareholder that much as Troy Ward pointed out on the call yesterday given that they have perhaps the highest expense structure in the industry, i.e., both costly balance sheet debt (no SBIC facility) and VERY high management expenses.

        They earn an ROE of around 8%. They might drag it up to 9% if things go great so maybe you could justify $16 if everything goes perfectly over the next couple of years.

        I do agree that a warrant gain could appear out of nowhere but so could a bankrtupcy a la Satcon.

    • Hah, obviously can't type. At $15.25 I am not a seller . . . will wait for the December dividend run.

 
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