GSV Capital Has 45% Upside: Barrington

In a report issued Monday, Barrington Research analysts Alexander Paris and Joe Janssen take a look at GSV Capital Corp GSVC following last Tuesday’s earnings call, in which the company reported a record net asset value (NAV) of $15.72 per share, up from $15.66 per share registered in the previous quarter.

Portfolio Update

As of June 30, GSV, a micro-cap investment company, owned positions in 52 portfolio companies (48 private and four public). The aggregate fair value of these stakes surpassed $390 million. Investments were allocated as follows:

• 35.4 percent to the education technology industry
• 32.1 percent to cloud computing and big data companies
• 15.3 percent to social mobile equities
• 10.4 percent to marketplaces operators
• 5.8 percent to sustainability businesses

The top ten investments in the company’s portfolio –excluding Treasuries- accounted for approximately 57.4 percent of the total portfolio’s fair value and were allocated:

• 12.5 percent to Palantir Technologies, Inc.
• 9.8 percent to 2U Inc TWOU
• 7.7 percent to Dropbox, Inc.
• 7.4 percent to Twitter Inc TWTR
• 3.7 percent to Coursera, Inc.
• 3.6 percent to Solexel, Inc.
• 3.6 percent to PayNearMe, Inc.
• 3.2 percent to SugarCRM, Inc.
• 3.0 percent to Dataminr, Inc.
• 2.9 percent to Avenues Global Holdings, LLC

Recommendation

At current prices, GSV’s stock is trading at a 40 discount to its stated net asset value. Although most investment companies trade at a discount, this one looks too big. The analysts at Barrington believe these shares should trade at a 10 to 15 percent discount to the company’s NAV.

Consequently, the firm reiterates an Outperform rating on the stock, establishing a price target of $13.75. This implies an upside of more than 45 percent from current levels.