Baird downgraded WhiteHorse Finance Inc (NASDAQ: WHF) to Neutral from Outperform, as the company's higher risk balance sheet and poor track record of capital preservation leave the analysts seeing minimal room for P/NAV multiple expansion beyond the current level.
The analysts noted several key points behind their view, according to which the higher risk balance sheet could limit further upside.
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This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
- In comparison to some similar sized BDCs that carry the benefit of SBA funding, WhiteHorse is heavily reliant on its $200 million revolving credit facility that comprises nearly 85 percent of its liability structure. During the second quarter, the company used liquidity from the credit facility to repay its $55 million unsecured term loan.
- The company's debt/equity ratio approximates 80 percent; management indicated a comfort range in the 80-90 percentage range.
- WhiteHorse faces continued concentration risk within its portfolio; of its 30 portfolio companies, its largest six comprise around 40 percent of the portfolio's fair value and around 70 percent of the company's equity (NAV) base.
The analysts maintained their $12 price target on the company's shares, and reduced their 2016 NII/share estimate to $1.41 from $1.45. The 2017 NII/share estimate was lowered to $1.40 from $1.47.