New Mountain Finance (NASDAQ:NMFC) Trading Down 3.5% - Should You Sell?

Key Points

• New Mountain Finance Corporation's stock fell 3.5% to trade at $10.11, with average trading volume declining by 29% from its usual rate.
• Analysts have set price targets for NMFC, with Oppenheimer rating it as "market perform" at $11 and Bank of America lowering its target to $10.
• The company recently declared a quarterly dividend of $0.32, reflecting a yield of 12.9%, amidst a high payout ratio of 168.42%.

New Mountain Finance Corporation (NASDAQ:NMFC - Get Free Report)'s stock price fell 3.5% on Monday . The stock traded as low as $9.97 and last traded at $10.11. 328,014 shares were traded during mid-day trading, a decline of 29% from the average session volume of 463,381 shares. The stock had previously closed at $10.47.

Analyst Ratings Changes

A number of analysts have recently issued reports on the stock. Bank of America restated an "underperform" rating and set a $10.00 price target (down previously from $11.75) on shares of New Mountain Finance in a report on Monday. Oppenheimer set a $11.00 target price on New Mountain Finance and gave the company a "market perform" rating in a research report on Wednesday, August 6th. Four research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, New Mountain Finance has an average rating of "Reduce" and a consensus target price of $10.60.

New Mountain Finance Trading Up 0.7%

The company has a debt-to-equity ratio of 1.35, a quick ratio of 1.42 and a current ratio of 1.42. The company's 50-day moving average price is $10.42 and its 200-day moving average price is $10.46. The firm has a market capitalization of $1.05 billion, a PE ratio of 13.04 and a beta of 0.80.

New Mountain Finance (NASDAQ:NMFC - Get Free Report) last announced its quarterly earnings results on Monday, August 4th. The company reported $0.32 earnings per share for the quarter, meeting analysts' consensus estimates of $0.32. The firm had revenue of $83.49 million during the quarter, compared to analysts' expectations of $84.57 million. New Mountain Finance had a net margin of 23.27% and a return on equity of 10.43%. During the same period in the previous year, the company earned $0.36 earnings per share. On average, sell-side analysts expect that New Mountain Finance Corporation will post 1.39 earnings per share for the current year.

New Mountain Finance Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 30th. Stockholders of record on Tuesday, September 16th will be issued a $0.32 dividend. The ex-dividend date of this dividend is Tuesday, September 16th. This represents a $1.28 annualized dividend and a dividend yield of 12.9%. New Mountain Finance's payout ratio is presently 168.42%.

Insider Buying and Selling

In other New Mountain Finance news, Director Steven B. Klinsky purchased 106,691 shares of the firm's stock in a transaction that occurred on Tuesday, September 16th. The shares were purchased at an average cost of $9.78 per share, for a total transaction of $1,043,437.98. Following the completion of the purchase, the director directly owned 4,370,857 shares in the company, valued at $42,746,981.46. This represents a 2.50% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, EVP Adam B. Weinstein purchased 49,750 shares of the company's stock in a transaction dated Monday, September 15th. The stock was purchased at an average price of $10.03 per share, with a total value of $498,992.50. Following the transaction, the executive vice president owned 652,490 shares of the company's stock, valued at approximately $6,544,474.70. This represents a 8.25% increase in their ownership of the stock. The disclosure for this purchase can be found here. Over the last three months, insiders have bought 157,191 shares of company stock valued at $1,550,035. Company insiders own 11.71% of the company's stock.

Hedge Funds Weigh In On New Mountain Finance

A number of institutional investors have recently modified their holdings of NMFC. LSV Asset Management boosted its position in New Mountain Finance by 14.3% during the first quarter. LSV Asset Management now owns 2,764,111 shares of the company's stock worth $30,488,000 after acquiring an additional 346,508 shares during the last quarter. Invesco Ltd. lifted its position in New Mountain Finance by 10.7% during the first quarter. Invesco Ltd. now owns 1,091,476 shares of the company's stock worth $12,039,000 after buying an additional 105,559 shares during the period. Dimension Capital Management LLC grew its holdings in New Mountain Finance by 17.0% in the 2nd quarter. Dimension Capital Management LLC now owns 950,072 shares of the company's stock valued at $10,023,000 after buying an additional 138,123 shares during the period. Transcend Capital Advisors LLC grew its holdings in New Mountain Finance by 68.5% in the 2nd quarter. Transcend Capital Advisors LLC now owns 714,104 shares of the company's stock valued at $7,534,000 after buying an additional 290,320 shares during the period. Finally, Millennium Management LLC grew its holdings in New Mountain Finance by 36.9% in the 1st quarter. Millennium Management LLC now owns 711,050 shares of the company's stock valued at $7,843,000 after buying an additional 191,518 shares during the period. Institutional investors and hedge funds own 32.08% of the company's stock.

New Mountain Finance Company Profile

New Mountain Finance Corporation Nasdaq: NMFC, a business development company is a private equity / buyouts and loan fund specializes in directly investing and lending to middle market companies in defensive growth industries. The fund prefers investing in buyout and middle market companies. It also makes investments in debt securities at all levels of the capital structure including first and second lien debt, unsecured notes, and mezzanine securities.