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Horizon Technology Finance Corp Message Board

  • keltus1952 keltus1952 Nov 5, 2013 4:40 PM Flag

    Report highlights....

    Declared divs for Dec. - Feb., all @ .115 monthly unchanged.......yield = 10% at 13.80 stock price.

    NII (net investment income) of .36, one cent above average analyst estimates.

    NAV (net asset value) of 14.95, up from 14.89 three months ago, but down from 15.15 nine months ago.

    Did have a $5mil+ realized portfolio loss, but showed a similar amount of unrealized appreciation. I find that a little suspicious. Might just be my suspicious nature.

    Debt about 47% of Total Assets.....aggressive, but within industry norms.

    Summary.........pretty happy with the report and continued monthly dividends at the .115 rate.

    Kel.........................will continue to hold I guess

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    • Only comment I have here is that HRZN's .93:1 regulatory debt to equity ratio is not within industry norms, it is the highest in the industry. TICC is second at .85:1, but after that the average regulatory debt to equity ratio is probably around .5:1.

      I am making the distinction here of regulatory debt to equity ratio vs total debt to equity ratio because there are a few BDC's that have a similar debt to equity ratio as HRZN if you include their SBIC debt. However, SBIC is exempt from the regulatory limit. HRZN does not have any SBIC debt.

      At HRZN's current debt level, a less than 6% drop in the value of their portfolio would cause them to exceed their debt to equity limit.

      I think HRZN is doing about the best they can considering they are in an unenviable situation, but from a regulatory debt to equity perspective, they are living close to the edge.


    • I just bought in today and I'd like to know when and why should you ever guess differently. You seem to have good insight and judgment regarding this stock.

    • yeah, me too. earnings as estimated... div looks stable and NAV as a buffer on stock price. what is not to like???

      • 1 Reply to albi1198
      • Rub and Albi..........Here's what bothers me a little......

        debt at 47% of Total at the top of the range for BDCs. Many are nearly as high, but some have ratios down in the 30 - 40% range or even less. It's OK as long as the economy staggers along, but in a recession it could be trouble. Don't forget......the investments that BDCs make are generally well below investment grade which is BBB- or better. Most BDC type holdings are probably single B (or less) or non rated. Make no mistake, these are aggressive investments that BDCs make. Several BDCs bit the dust, had to be merged, or slashed their dividends in the 2008 - 2011 time frame.

        The realized loss was OK, that's part of the business (see above). I thought the unreaized gain that was booked was somewhat questionable as it seemed a little too convenient in that they came so close to offsetting one another. Without that gain the NAV would have taken a pretty hard hit.

        My position is small, about 3.5% of my IRA account. I can live with that amount of risk. No other BDCs at this time, but I've held / traded numerous others. I do have a soft spot for the MONTHLY div payers.


    • thanks for the update

13.38-0.04(-0.30%)Aug 26 4:00 PMEDT