Possibly their worst quarter ever. I am thanking the stars I didn't add to my small position. Has their underwriting recently gotten really bad or were they lying about their pre-IPO track record? One of those statements must be true. Can't wait for the conference call to watch them spin this.
With all due respect, when are you going to stop bottom feeding in this sector?
Most of the time the ones that are cheap are cheap for a reason.
Compare HRZN to the other VC BDC HTGC over the last two years.
One was cheap and for good reason, and the other wasn't. Granted HTGC is going to take a breather for a couple of quarters but you'd be miles ahead had you gone with the one that wasn't trading at such a bargain price.
Getting back to HRZN, it was a bad quarter. Three new non accruals in Q4 and five total. Would have been six but they realized the loss on one that had been on non accrual status.
A BDC can't charge enough in interest on their loans to make up for losses due to poor credit quality.
Hi RC! Good to hear from you -- I don't post much anymore.
I only own a few shares at this point -- sold most of what I have in January when it got back to $14 so my total loss today is about the cost of a burger and fries.
In late January I completed liquidation of all my BDC holdings. I own alot of the HTGC baby bonds and a smaller slug of PSEC and SLRC baby bonds. I think the loan market is VERY overheated and IRRs on loans made in 2013 and 2014 will be VERY poor across the sector. This may not show up for awhile though.
HRZN is a true trainwreck. I expect that they are piling into life sciences at the very top. Plus, I just DESPISE management's promotional style. Believe it or not, they opened the call by contratulating themselves on their excellent NAV performance . . . while quietly flagging the fact that they will no longer be covering even their reduced dividend going foward.
Given where their cost structure is and their track record, even putting aside my concerns about the life sciences venture loan market this is a 5-7% ROE business and deserves to trade at a 25-35% discount to NAV and then only if we see the board replaced.