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Gladstone Upped to Strong Buy

Zacks Equity Research

On May 31, 2013, Zacks Investment Research upgraded Gladstone Investment Corp (GAIN) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Gladstone Investment has been witnessing rising earnings estimates on the back of strong fiscal fourth-quarter and full-year 2012 results. Moreover, shares of this business development company appreciated 5.21% year to date.

On May 14, 2013, Gladstone Investment reported fiscal fourth-quarter (ended Mar 31) net investment income of 22 cents per share, surpassing the Zacks Consensus Estimate by 7 cents. This also compared favorably with the prior-quarter earnings of 15 cents per share.

The sequential improvement was driven by dividend income derived from recapitalization of the company’s investment in Galaxy Tool Holdings Corp. (Galaxy), partially offset by higher incentive fee expenses.  

For fiscal 2012, net investment income stood at 68 cents per share compared with 62 cents reported in the prior year.

Total investment income for the fourth quarter was $10.5 million, up 45.8% sequentially. Moreover, total expense stood at $4.6 million, up 43.2% from the prior quarter.

Over the last 30 days, 3 out of 5 estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by 1.6% to $0.63 per share. For 2014, 1 out of 2 estimates moved higher over the same time frame, pulling the Zacks Consensus Estimate up by 3.0% to $0.68 per share.

Other Stocks to Consider

Other stocks that are also worth considering include Bank of the Ozarks, Inc. (OZRK), Kearny Financial Corp. (KRNY) and Ellington Financial LLC (EFC). All these stocks carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on GAIN

Read the Full Research Report on EFC

Read the Full Research Report on OZRK

Read the Full Research Report on KRNY

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