|Shares Out. (in M):||73||P/E||8.0x||7.4x|
|Market Cap (in $M):||298||P/FCF||0.0x||0.0x|
|Net Debt (in $M):||0||EBIT||0||0|
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MCGC is an extremely attractive asymmetric investment with 50%+ upside and very well protected downside. MCGC is a completely bombed-out and unloved BDC. It has a terrible track record, but the market is missing its dramatic transformation in the last year. The CEO/CFO were fired. Troubled legacy investments were written off. It cut headcount by 50%. It started buying back stock at 80% of book value. And, the new CEO started buying stock personally at higher prices than today’s level. I am no fan of the BDC business model, but if there were ever a time to buy a BDC, this is it.
Hitting the Reset Button
Valuation and Upside Potential
Why is Book Value safe?
Capital Structure and Liquidity
|Summary Balance Sheet|
|Equity||379||368||(Assumes they complete they buyback)|
|L + E||638||626|
|Summary Income Statement|
|Interest & Fee Income||48||74|
|Yield||10.9%||12.5%||(Fees were unusually low in Q3)|
|(Target is 12-13% with 11% loan yield and 2% fees)|
|% of Debt||3.5%||3.5%|
|Cash Opex||19||10||(Explicitly guided to $10mm run rate in 2013)|
|% of Investments||4.4%||1.7%|
|% of Investments||0.0%||2.0%||(Guidance is 2-3% normalized)|
|Shares||73||71||(Assumes they complete the buyback)|
|EPS||$ 0.28||$ 0.60|
This posting is solely for the evaluation of club members and is not a recommendation to buy or sell this stock. The views expressed are those of the author individually and should not be attributed to any affiliated investment firm, which may or may not hold positions consistent with the views expressed herein and may buy or sell shares at any time.
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