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Gladstone Investment Corporatio Message Board

  • jdgardiner jdgardiner Jun 17, 2009 3:40 PM Flag

    More info on JMS BUY rating for GAIN.

    Here's a bit more info on the recent BUY rating.
    Part of it didn't make a lot of sense to me. At the top it says "dividend is sustainable" but at the bottom it says "dividend lower in FY10".

    Janney Montgomery Scott Initiates Coverage on Gladstone Investment Corp (GAIN)
    June 17, 2009 9:39 AM EDT

    Janney Montgomery Scott initiates coverage on Gladstone Investment Corp (Nasdaq: GAIN) with a Buy. Fair value estimate $5.

    Janney analyst says, "This is a high risk, potentially high reward investment. GAIN is a regulated investment company/business development company (RIC/BDC). GAIN has emerged from a difficult FY09 with a sustainable dividend and low leverage. It is now positioned to rebuild its portfolio if it is able to obtain additional debt capital. In FY09, failure to receive renewal of its previous line of credit forced the sale of substantially all of the company s syndicated loan portfolio at a 33.5% discount to cost. GAIN's current facility is smaller and carries a higher interest rate. This will limit new investments and reduce margins, driving net investment income (NII) and the C."

    Gladstone Investment Corporation was primarily established for the purpose of investing in subordinated loans, mezzanine debt, preferred stock and warrants to purchase common stock of small and medium-sized companies in connection with buyouts and other recapitalizations.

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