U.S. Markets closed

CEO Invests in Equus Total Return

- By Jennifer Chiou

John Hardy (Insider Trades), CEO of Equus Total Return Inc. (EQS), purchased 500,000 shares of the company on March 17. The average price was $2.40 per share for a total transaction of $1,200,000. Equus is a business development company with a market cap of $25.66 million.


To date in 2017, there have been six insider purchases totaling 825,000 shares. All six insider purchases were made on March 17 and include Hardy's aforementioned transaction, which is also his sole transaction with the company. Of all six insiders that increased their stake in Equus, Hardy's purchase was the largest at 500,000 shares. The second-largest insider transaction was made by Secretary Kenneth Denos (Insider Trades), who bought 250,000 shares. For more information about insider transactions with Equus, click here.

The company reported an increase in net assets in the quarter ended Dec. 31, 2016 when compared the corresponding quarter of the previous year. Net assets were $37,308 for the fourth quarter of 2015, which subsequently increased to $42,740 in the fourth quarter of 2016. With an identical number of shares outstanding for both years, the net assets per share were $2.94 and $3.37 respectively. Total investment income also increased by $100,000 from the third quarter 2015 to the third quarter 2016, from $91,000 to $191,000. On the other hand, total expenses and net investment loss also increased when comparing the third quarters of 2015 and 2016. The cost of professional fees increased from $81,000 to $292,000 from 2015 to 2016, which contributed to the increase in total expenses of $461,000 to $761,000. Net investment loss increased from $370,000 in third-quarter 2015 to $570,000 in third-quarter 2016.

Total assets for the company since 2012 increased 12%, however, they follow a decreasing trendline. Total liabilities are up 71.6% since 2012 and follow a decreasing trendline. For more information about the company's financial statistics, click here.

On Jan. 6, the company announced the authorization by its shareholders to withdraw its election to be classified as a business development company under the Investment Company Act of 1940. The autorization will expire July 31 and is attributed to the company's plan of reorganization, which was announced May 15, 2014. Equus' reorganization plan also includes restructuring the company through an acquisition or merger with an operating company. Hardy said the shareholder's authorization to withdraw the business development election is "an important step in the process of effecting a transformative change in the strategic direction of Equus."

According to GuruFocus, Equus Total Return has a business predictability rank of 1 out of 5 stars. For more information about business predictability ranks, click here.

Start a free 7-day trial of Premium Membership to GuruFocus.

This article first appeared on GuruFocus.