Great Elm Capital Group (NASDAQ:GECC) Issues Earnings Results

Key Points

• EPS beat: Great Elm reported EPS of $0.36 vs. consensus $0.23 (beat by $0.13), but revenue came in at ($1.91) million vs. an expected $10.74 million and the company showed a steep negative net margin (-63.59%).
• The company announced a quarterly dividend of $0.25 (annualized $1.00) — a 17.8% yield with an ex-dividend date of June 15, though the dividend payout ratio is negative (-52.17%), raising sustainability concerns.
• Investor sentiment is cautious: 38.75% of shares are held by hedge funds, analysts have a consensus rating of "Reduce" with a $10.50 average target, while the stock trades near $5.61 and the firm shows weak liquidity (quick/current ratio 0.24) and debt/equity of 1.68.

Great Elm Capital Group (NASDAQ:GECC - Get Free Report) posted its quarterly earnings data on Monday. The financial services provider reported $0.36 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.23 by $0.13, Zacks reports. Great Elm Capital Group had a positive return on equity of 13.19% and a negative net margin of 63.59%.The business had revenue of ($1.91) million during the quarter, compared to the consensus estimate of $10.74 million.

Great Elm Capital Group Stock Performance

NASDAQ:GECC traded up $0.08 on Tuesday, hitting $5.61. The stock had a trading volume of 65,569 shares, compared to its average volume of 81,609. The stock has a market cap of $77.93 million, a price-to-earnings ratio of -2.44 and a beta of 0.72. The company has a quick ratio of 0.24, a current ratio of 0.24 and a debt-to-equity ratio of 1.68. The business's 50-day simple moving average is $5.43 and its two-hundred day simple moving average is $6.61. Great Elm Capital Group has a 52-week low of $4.63 and a 52-week high of $11.45.

Great Elm Capital Group Cuts Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 15th will be given a $0.25 dividend. This represents a $1.00 annualized dividend and a yield of 17.8%. The ex-dividend date of this dividend is Monday, June 15th. Great Elm Capital Group's dividend payout ratio (DPR) is presently -52.17%.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of the company. Squarepoint Ops LLC boosted its position in Great Elm Capital Group by 247.9% in the fourth quarter. Squarepoint Ops LLC now owns 106,079 shares of the financial services provider's stock worth $747,000 after purchasing an additional 75,588 shares during the last quarter. Jane Street Group LLC purchased a new position in Great Elm Capital Group in the fourth quarter worth about $220,000. Papamarkou Wellner Asset Management inc. boosted its position in Great Elm Capital Group by 54.9% in the fourth quarter. Papamarkou Wellner Asset Management inc. now owns 30,200 shares of the financial services provider's stock worth $213,000 after purchasing an additional 10,700 shares during the last quarter. Schonfeld Strategic Advisors LLC purchased a new position in Great Elm Capital Group in the third quarter worth about $169,000. Finally, Virtu Financial LLC purchased a new position in Great Elm Capital Group in the third quarter worth about $160,000. 38.75% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Several equities analysts have recently weighed in on GECC shares. Clear Str downgraded Great Elm Capital Group from a "strong-buy" rating to a "hold" rating in a report on Tuesday, March 3rd. Zacks Research downgraded Great Elm Capital Group from a "hold" rating to a "strong sell" rating in a report on Thursday, March 5th. Two research analysts have rated the stock with a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, Great Elm Capital Group presently has a consensus rating of "Reduce" and an average price target of $10.50.

Great Elm Capital Group Company Profile

Great Elm Capital Group, Inc NASDAQ: GECC is a closed-end, externally managed business development company (BDC) that seeks to generate current income and capital appreciation by investing in private, middle-market companies. The firm targets senior secured loans, subordinated debt and equity securities of U.S. companies, with a focus on businesses offering stable cash flows and potential for growth. Industry sectors of interest include business services, consumer products, industrials and healthcare, among others.

GECC's investment strategy emphasizes portfolio diversification and active management.

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