Gilford Securities, a full-service investment firm, headquartered in New York City, reiterated their Neutral rating for Horizon Technology Finance (HRZN) in a research report issued to clients. The Gilford Securities analyst noted, “Horizon Technology Finance reported 2012 Q4 Net Investment Income (NII) of $0.36 per share versus our estimate of $0.35 per share. The operating performance was reasonable. The performance of the underlying portfolio was less than reasonable. The surprise in the quarter was that three companies went on non-accrual status during the quarter. We also underestimated the degree that Satcon Technology was going to be marked down as a result of their bankruptcy proceedings.”
Commenting further, the analyst said, “At this juncture, we continue to have a negative view of the total return prospects of the BDC group in general. As a result of our negative bias on the BDC group in general, we have to judge each of our coverage companies through a new lens. Based upon last week’s close of $14.80, we believe investors should continue to take a Neutral stance on HRZN shares given the risks we see in the valuation of the BDC group in general. Given our $15.25 price target, HRZN shares offer a potential return of 12% using a 12-month time frame which is not a high enough return to warrant a rating above Neutral.”
The analyst further noted, “Our rating is in no way a reflection of our enthusiasm for HRZN or the HRZN management team, although this quarter’s portfolio performance suggests that we should wait for a significant discount to NAV before increasing positions. We are also mindful of the building risk in the valuation of the BDC group in general. Simply put, with the group at this level and little upside return left in our price target, we feel it is prudent to stick with a Neutral stance at this time.”
About Gilford Securities
Founded in 1979 by senior officers of the former Blythe Eastman Dillon & Co., Gilford Securities is a full-service boutique investment firm providing an array of financial services to institutional and retail clients including corporate finance services, independent equity research, equity sales and trading, retirement planning and wealth management. The firm’s research effort targets select underserved niche segments in the small and middle capitalization market sector.
For more information about Gilford Securities, please visit http://www.gilfordsecurities.com
Contact:
John Richter
Gilford Securities Incorporated
212-888-6400
John.richter@gilfordsecurities.com