New Mountain Finance (NASDAQ:NMFC) Sets New 1-Year Low - Should You Sell?

Key Points

• New Mountain Finance shares fell to a new 52-week low of $6.67, below both their 50-day average of $7.30 and 200-day average of $7.54.
• Analyst sentiment is cautious: four analysts rate the stock Hold and one rates it Sell, producing a consensus “Reduce” rating and a $7.67 target price.
• The company reported quarterly EPS of $0.26, in line with estimates, but revenue of $39.02 million fell well short of the $62.78 million forecast. It continues to offer a substantial quarterly dividend of $0.25, equal to an annualized yield of about 14.8%.

New Mountain Finance Corporation (NASDAQ:NMFC - Get Free Report) shares hit a new 52-week low during mid-day trading on Tuesday. The company traded as low as $6.67 and last traded at $6.74, with a volume of 513,271 shares. The stock had previously closed at $6.73.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on NMFC. Wells Fargo & Company cut their target price on shares of New Mountain Finance from $8.00 to $7.50 and set an "equal weight" rating on the stock in a report on Wednesday, August 5th. Weiss Ratings downgraded shares of New Mountain Finance from a "sell (d+)" rating to a "sell (d)" rating in a research report on Thursday. Finally, Keefe, Bruyette & Woods dropped their price objective on shares of New Mountain Finance from $9.00 to $8.00 and set a "market perform" rating on the stock in a research note on Monday, July 20th. Four research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of "Reduce" and a consensus target price of $7.67.

New Mountain Finance Stock Performance

The company has a current ratio of 3.66, a quick ratio of 3.66 and a debt-to-equity ratio of 1.30. The firm has a market capitalization of $636.59 million, a price-to-earnings ratio of -14.34 and a beta of 0.60. The stock's 50 day moving average price is $7.30 and its two-hundred day moving average price is $7.54.

New Mountain Finance (NASDAQ:NMFC - Get Free Report) last released its quarterly earnings data on Monday, August 3rd. The company reported $0.26 EPS for the quarter, hitting the consensus estimate of $0.26. The business had revenue of $39.02 million for the quarter, compared to analyst estimates of $62.78 million. New Mountain Finance had a negative net margin of 16.78% and a positive return on equity of 10.94%. During the same period in the previous year, the firm earned $0.32 EPS. On average, analysts forecast that New Mountain Finance Corporation will post 1.10 EPS for the current year.

New Mountain Finance Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Wednesday, September 30th. Shareholders of record on Wednesday, September 16th were paid a $0.25 dividend. This represents a $1.00 dividend on an annualized basis and a yield of 14.8%. The ex-dividend date of this dividend was Wednesday, September 16th. New Mountain Finance's dividend payout ratio (DPR) is presently -212.77%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of the stock. Integrated Wealth Concepts LLC acquired a new position in shares of New Mountain Finance in the 2nd quarter valued at $27,000. State of Wyoming acquired a new stake in shares of New Mountain Finance during the 1st quarter worth $71,000. Catalyst Capital Advisors LLC acquired a new stake in shares of New Mountain Finance during the 1st quarter worth $93,000. Rockefeller Capital Management L.P. increased its holdings in shares of New Mountain Finance by 218.4% during the 4th quarter. Rockefeller Capital Management L.P. now owns 15,312 shares of the company's stock worth $141,000 after buying an additional 10,503 shares during the last quarter. Finally, SG Americas Securities LLC purchased a new position in shares of New Mountain Finance in the 1st quarter worth $122,000. Institutional investors and hedge funds own 32.08% of the company's stock.

New Mountain Finance Company Profile

New Mountain Finance Corporation is a business development company (BDC) that provides financing to established middle-market companies. The company primarily invests in privately held businesses through senior secured loans, unitranche loans, subordinated debt and other debt securities, and may also make equity investments.

New Mountain Finance generally focuses on companies with strong market positions, recurring revenue and experienced management teams. Its investments span a range of industries and are intended to support acquisitions, recapitalizations, growth initiatives and other corporate purposes.

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