SLR Investment (NASDAQ:SLRC) Shares Gap Down on Disappointing Earnings

Key Points

• Disappointing quarter: SLR reported Q EPS of $0.33 versus $0.40 expected and revenue of $47.14M vs. $54.01M, prompting the stock to gap down about 12.9% (closed $15.97, opened $14.11, last $13.76).
• Dividend trimmed: The company announced a quarterly dividend of $0.31 (annualized $1.24), a yield of 8.9% and a payout ratio of 96.47%, indicating a high payout after the cut.
• Mixed market sentiment: analysts' consensus is a "Hold" with a $15.29 price target, while insider Michael S. Gross recently bought shares and insiders own 8.8% of the company.

SLR Investment Corp. (NASDAQ:SLRC - Get Free Report) gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $15.97, but opened at $14.11. SLR Investment shares last traded at $13.7640, with a volume of 358,592 shares trading hands.

The financial services provider reported $0.33 EPS for the quarter, missing the consensus estimate of $0.40 by ($0.07). The firm had revenue of $47.14 million during the quarter, compared to analysts' expectations of $54.01 million. SLR Investment had a return on equity of 8.76% and a net margin of 42.34%.

SLR Investment Cuts Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, June 26th. Shareholders of record on Friday, June 12th will be paid a $0.31 dividend. This represents a $1.24 annualized dividend and a yield of 8.9%. The ex-dividend date of this dividend is Friday, June 12th. SLR Investment's payout ratio is presently 96.47%.

Wall Street Analysts Forecast Growth

Several analysts have recently issued reports on the stock. Compass Point raised shares of SLR Investment from a "neutral" rating to a "buy" rating and set a $16.50 price objective for the company in a research note on Tuesday, March 10th. Wells Fargo & Company lowered their price objective on shares of SLR Investment from $13.00 to $12.00 and set an "underweight" rating for the company in a research note on Tuesday, March 3rd. Raymond James Financial set a $16.00 price objective on shares of SLR Investment and gave the company an "outperform" rating in a research note on Wednesday, February 25th. Keefe, Bruyette & Woods lowered their price objective on shares of SLR Investment from $16.50 to $15.00 and set a "market perform" rating for the company in a research note on Monday, March 30th. Finally, Wall Street Zen raised shares of SLR Investment from a "sell" rating to a "hold" rating in a research note on Sunday, April 12th. One analyst has rated the stock with a Strong Buy rating, three have given a Buy rating, two have assigned a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, SLR Investment has an average rating of "Hold" and a consensus price target of $15.29.

Insiders Place Their Bets

In related news, insider Michael S. Gross acquired 10,452 shares of SLR Investment stock in a transaction on Monday, March 16th. The shares were bought at an average price of $13.90 per share, for a total transaction of $145,282.80. Following the completion of the purchase, the insider directly owned 4,025,153 shares in the company, valued at $55,949,626.70. This trade represents a 0.26% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Company insiders own 8.80% of the company's stock.

Institutional Investors Weigh In On SLR Investment

A number of large investors have recently modified their holdings of SLRC. Kelleher Financial Advisors acquired a new stake in shares of SLR Investment in the fourth quarter valued at about $26,000. BNP Paribas Financial Markets grew its stake in shares of SLR Investment by 1,389.8% in the third quarter. BNP Paribas Financial Markets now owns 1,758 shares of the financial services provider's stock valued at $27,000 after buying an additional 1,640 shares in the last quarter. CWM LLC lifted its holdings in SLR Investment by 215.6% in the 3rd quarter. CWM LLC now owns 2,367 shares of the financial services provider's stock worth $36,000 after buying an additional 1,617 shares in the last quarter. State of Alaska Department of Revenue purchased a new position in SLR Investment in the 3rd quarter valued at about $38,000. Finally, International Assets Investment Management LLC purchased a new position in SLR Investment in the 4th quarter valued at about $42,000. Institutional investors and hedge funds own 35.32% of the company's stock.

SLR Investment Trading Down 12.9%

The company has a current ratio of 1.04, a quick ratio of 1.04 and a debt-to-equity ratio of 1.15. The business's 50-day simple moving average is $14.86 and its two-hundred day simple moving average is $15.14. The company has a market capitalization of $758.71 million, a PE ratio of 8.17 and a beta of 0.71.

SLR Investment Company Profile

SLR Investment Corp. NASDAQ: SLRC is a closed‐end, externally managed business development company that provides customized debt and equity financing solutions to middle‐market companies. The firm seeks to generate current income and capital appreciation by investing primarily in senior secured loans, second lien financings, mezzanine debt and equity co‐investments. Its flexible capital approach allows it to structure financing across the capital structure to address a range of sponsor‐backed transactions.

SLR Investment Corp.

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