Stock Traders Buy High Volume of Put Options on Hercules Capital (NYSE:HTGC)

Key Points

• Put-option activity surged: Traders purchased 3,361 HTGC put options, a 396% increase over the average daily volume of 678 contracts, signaling heightened bearish or hedging interest.
• Shares declined 0.9% to $16.41 while institutional investors held 19.69% of the company. Hercules Capital reported quarterly EPS of $0.50, beating estimates, though revenue fell short of analyst expectations.
• Hercules Capital raised its quarterly dividend to $0.40 from $0.07, implying an annualized dividend of $1.60 and a 9.7% yield. Analysts maintain a “Moderate Buy” consensus with an average price target of $18.89.

Hercules Capital, Inc. (NYSE:HTGC - Get Free Report) saw unusually large options trading activity on Wednesday. Traders purchased 3,361 put options on the company. This is an increase of 396% compared to the average daily volume of 678 put options.

Institutional Trading of Hercules Capital

A number of institutional investors and hedge funds have recently added to or reduced their stakes in HTGC. Burk Holdings LLC purchased a new stake in shares of Hercules Capital in the 2nd quarter worth about $28,000. Archer Investment Corp bought a new stake in shares of Hercules Capital during the second quarter valued at approximately $32,000. Fifth Third Bancorp purchased a new stake in Hercules Capital in the first quarter worth $35,000. Caitlin John LLC purchased a new stake in Hercules Capital in the second quarter worth $42,000. Finally, Deutsche Bank AG purchased a new position in Hercules Capital during the second quarter valued at $57,000. Hedge funds and other institutional investors own 19.69% of the company's stock.

Hercules Capital Trading Down 0.9%

HTGC traded down $0.15 on Wednesday, hitting $16.41. 237,916 shares of the company were exchanged, compared to its average volume of 1,929,908. The company has a debt-to-equity ratio of 1.03, a quick ratio of 1.37 and a current ratio of 1.37. The firm has a fifty day simple moving average of $17.12 and a two-hundred day simple moving average of $16.07. The stock has a market capitalization of $3.07 billion, a PE ratio of 8.16 and a beta of 0.82. Hercules Capital has a 12 month low of $13.70 and a 12 month high of $19.13.

Hercules Capital (NYSE:HTGC - Get Free Report) last released its quarterly earnings data on Thursday, July 30th. The financial services provider reported $0.50 earnings per share for the quarter, beating analysts' consensus estimates of $0.48 by $0.02. Hercules Capital had a return on equity of 16.01% and a net margin of 67.68%.The firm had revenue of $134.41 million during the quarter, compared to analyst estimates of $146.71 million. During the same quarter in the prior year, the firm posted $0.50 earnings per share. The business's quarterly revenue was up 8.4% compared to the same quarter last year. Sell-side analysts expect that Hercules Capital will post 1.95 earnings per share for the current year.

Hercules Capital Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, August 18th. Shareholders of record on Tuesday, August 11th were given a $0.40 dividend. The ex-dividend date was Tuesday, August 11th. This is a positive change from Hercules Capital's previous quarterly dividend of $0.07. This represents a $1.60 dividend on an annualized basis and a dividend yield of 9.7%. Hercules Capital's dividend payout ratio is presently 79.60%.

Analyst Upgrades and Downgrades

HTGC has been the topic of several recent research reports. LADENBURG THALM/SH SH reduced their price objective on Hercules Capital from $21.00 to $20.00 and set a "buy" rating on the stock in a research report on Friday, July 31st. Weiss Ratings raised Hercules Capital from a "hold (c)" rating to a "hold (c+)" rating in a research note on Monday, September 28th. Finally, UBS Group raised shares of Hercules Capital from a "neutral" rating to a "buy" rating and lifted their price target for the stock from $15.50 to $18.50 in a research note on Tuesday, September 1st. One analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and two have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $18.89.

About Hercules Capital

Hercules Capital, Inc is a specialty finance company and business development company that provides financing to venture capital- and private equity-backed companies. Founded in 2003, the company was formerly known as Hercules Technology Growth Capital and focuses on supporting businesses in technology, life sciences, and other innovation-oriented industries.

Hercules Capital offers secured and unsecured venture debt, growth capital, equipment financing, working capital facilities, acquisition financing, and recapitalization solutions.

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