Book value – Medielys http://medielys.com/ Thu, 19 May 2022 12:17:37 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://medielys.com/wp-content/uploads/2021/08/favicon-2-150x150.png Book value – Medielys http://medielys.com/ 32 32 It appears that the book value may decline once the transfer of unrecoverable assets is complete. Investors might be cautious. https://medielys.com/2022/05/19/it-appears-that-the-book-value-may-decline-once-the-transfer-of-unrecoverable-assets-is-complete-investors-might-be-cautious/ Thu, 19 May 2022 12:17:37 +0000 https://medielys.com/2022/05/19/it-appears-that-the-book-value-may-decline-once-the-transfer-of-unrecoverable-assets-is-complete-investors-might-be-cautious/ Warning : The opinions expressed in the forum are the opinions of the user who writes the message, and not those of moneycontrol.com. You agree, by accessing this forum, that moneycontrol.com assumes no responsibility for messages posted on this forum or for any loss incurred by following advice posted on this forum. moneycontrol.com operates this […]]]>

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Pangea Logistics Solutions: A Case of Trading Below Book Value (NASDAQ: PANL) https://medielys.com/2022/05/17/pangea-logistics-solutions-a-case-of-trading-below-book-value-nasdaq-panl/ Tue, 17 May 2022 07:40:00 +0000 https://medielys.com/2022/05/17/pangea-logistics-solutions-a-case-of-trading-below-book-value-nasdaq-panl/ Miro Nenchev/iStock via Getty Images Investment thesis Pangea Logistics Solutions Ltd. (NASDAQ:PANL) has posted excellent returns over the past year and year-to-date, outperforming the market and just behind EuroDry (EDRY) among its peers. The stock has increased in response to the general boom in the shipping industry and the company’s record year of outstanding financial […]]]>

Miro Nenchev/iStock via Getty Images

Investment thesis

Pangea Logistics Solutions Ltd. (NASDAQ:PANL) has posted excellent returns over the past year and year-to-date, outperforming the market and just behind EuroDry (EDRY) among its peers. The stock has increased in response to the general boom in the shipping industry and the company’s record year of outstanding financial performance.

Chart
Data by Y-Charts

However, despite the upside, the stock is still trading at a discount to its book value and significantly below industry medians and historical averages, signifying huge upside potential. Additionally, the company recently increased its quarterly dividend for the second time in the year by 50% for the June payout.

the the market remains strong with rate hikes in all regions, but may have reached one point past its peak. Being a small cap company, a bear market can weigh heavily on the stock and the volatility may not be suitable for conservative investors, but for me the upside of the stock outweighs the risk.

Company presentation

Pangea is a shipping company who offers logistics and dry bulk transportation services, including cargo loading and unloading, ship chartering, voyage planning and technical ship management. Almost all of its revenue is generated from COA, voyage charters and time charters.

On average, it operated around 55 vessels daily in 2021, including 24 wholly-owned or part-owned vessels through joint ventures, and transported around 27 million tonnes of cargo, comprising various dry bulk cargoes including grain. , coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone.

Its fleet includes 8 Supramax, 3 Ultramax, 4 Post Panamax, 10 Panamax and 1 Barge, with a total capacity of 1,563,869 DWT. Its vessels are chartered on a short-term basis to be operated under our contractual activities.

Expected Financial Performance Vs. Market Sentiment

At MRQ, Pangea’s net income and diluted EPS more than tripled year-on-year to $20.2 million and $0.45 from $5.9 million and $0.13 in 2021. This growth is mainly attributable to strong revenue growth caused by a 60% increase in Pangea’s TCE rates from $16,524 per day in 2021 to $26,472 per day at MRQ, a 17% premium on market rates for its long-term COAs.

PANL TCE rate vs TCE market rate

Pangea Investor Presentation

In the first quarter of 2022, the company took advantage of the market and continued its trend of beating market expectations, recording EPS of $0.35 compared to the consensus estimate of $0.20. Current quarter EPS was expected to be around $0.36, but was updated following strong MRQ earnings and raised to $0.60.

Chart
Data by Y-Charts

Potential investors should be aware that the company’s profit margins are considerably lower than those of the competition. This is primarily due to its business model which relies heavily on the COA, shielding its earnings from high volatility, but in the process, hampering its ability to take advantage of the bullish spot market. This makes the company a safer long-term bet for investors, but also limits exposure to exceptional growth for risk-tolerant investors.

Chart
Data by Y-Charts

Unlike the macro environment, which is suffering from recession fears and slowing growth expectations, dry bulk fundamentals are currently thriving due to their idiosyncratic nature. Despite a 9% drop in Chinese dry bulk imports, the average Baltic Dry index is up almost 36% since the start of the year. This counter-intuitive increase is probably due to Increase in coal imports in Europe amid the Russian-Ukrainian conflict, cushioning the blow to the Chinese economy.

Baltic Dry Index

Trade economy

The Breakwave report iterates a bullish feeling,

If the dry bulk market manages to “fill” this imbalance until Chinese stimulus efforts materialize, pushing back commodity import demand, then an otherwise severe down cycle would have been averted to the benefit of owners. dry bulk… Although the high level of volatility in 2021 may slow down, the dry bulk sector remains in a bullish cycle driven by relatively weak supply growth, strong demand for bulk commodities and persistent infrastructure bottlenecks and supply chain constraints that affect the entire shipping universe. We anticipate government actions on energy security combined with geopolitical developments to drive dry bulk cargo flows, and thus indirectly determine the trajectory of freight rates.

Movement of Dry Bulk Shipping Rates

Breakwave Advisors

This is reinforced by management’s remark that “the booked second quarter time charter equivalent indicates a rate of $29,400 per day”.

TCE Perspectives

Pangea Investor Presentation

Based on the above and management’s comment that the current quarter is seasonally the strongest, it is reasonable to believe that the company is likely to achieve its objectives and that the estimates are not too optimistic.

This will likely result in share price growth and accrue higher total returns, as the company has already increased its dividends, expecting strong earnings growth.

Evaluation

Besides the fact that the company is grossly undervalued by conventional relative valuation measures, it holds nearly 30% of its market capitalization in cash and cash equivalents at $69.9 million. The company has ridiculously low valuation metrics and is currently trading more than 10% below its book value per share of $5.78. If we were to assume a market correction that would bring the PANL metrics to the industry medians, we would get a price close to $19.

However, this should by no means be taken as a realistic price, given the company’s small market capitalization, which makes the stock vulnerable to high volatility and uncertainty surrounding the market. Pangea has a 12 month old Wallstreet $7.50 price targetholding an increase of more than 44%.

PANL valuation

Looking for Alpha

Additionally, the company declared a quarterly cash dividend of $0.075 per share, to be paid in June, bringing its forward yield to a healthy 5.78%. The dividend is well covered with an earnings yield of over 20% and is sustainable with a payout ratio of less than 10% and a cash flow payout ratio of 13.4%.

Conclusion

Pangea has an excellent management team that is focused on long-term value creation with a focus on its COA-based business model. Its ability to generate TCE rates higher than those of the market testifies to its strong operational presence which builds customer loyalty.

With a low valuation, sustainable dividends and promising growth prospects, the company seems to tick all the boxes for value, income and growth investing.

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Wall Street on sale: Goldman and Robinhood trade near book value https://medielys.com/2022/05/12/wall-street-on-sale-goldman-and-robinhood-trade-near-book-value/ Thu, 12 May 2022 17:07:00 +0000 https://medielys.com/2022/05/12/wall-street-on-sale-goldman-and-robinhood-trade-near-book-value/ Text size Headquarters of the Goldman Sachs group in New York. Michael Nagle/Bloomberg Wall Street is on sale with much of the stock market, as an industry leader Goldman Sachs Group is trading near its book value for the first time in two years. Small securities companies like Jefferies Financial Group (symbol: JEF) and cowen […]]]>

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Why Rising Rates Helped New Residential Increase Book Value https://medielys.com/2022/05/07/why-rising-rates-helped-new-residential-increase-book-value/ Sat, 07 May 2022 11:10:00 +0000 https://medielys.com/2022/05/07/why-rising-rates-helped-new-residential-increase-book-value/ The first quarter of 2022 was expected to be particularly brutal for mortgage originators and mortgage real estate investment trusts (REITs). The Fed began a series of hikes in the federal funds rate aimed at curbing rising inflation. At the same time, the Fed is about to let its holdings of mortgage-backed securities decline. Rising […]]]>

The first quarter of 2022 was expected to be particularly brutal for mortgage originators and mortgage real estate investment trusts (REITs). The Fed began a series of hikes in the federal funds rate aimed at curbing rising inflation. At the same time, the Fed is about to let its holdings of mortgage-backed securities decline.

Rising rates are bad news for mortgage originators, and falling demand for mortgage-backed securities is bad news for mortgage REITs. New Residential (NRZ -1.76%) managed to report an increase in earnings and book value per share. So what are they doing differently?

Image source: Getty Images.

A highly diversified mortgage company

New Residential operates three core businesses. First, it invests in mortgages and mortgage-backed securities and earns interest income from these investments. This is the typical mortgage REIT model. Second, New Residential operates a mortgage origination business where it purchases completed loans from independent mortgage originators and then resells them in the market through securitization transactions. Finally, New Residential is a mortgage loan servicer, and this line of business accounted for a large portion of the company’s earnings in the first quarter.

Mortgage servicing rights are an unusual asset because their value increases as interest rates rise. Here’s how they work. When a mortgage loan is entered into, there are two assets that can be separated and sold separately. The first is the loan itself, which an investor will hold to collect the monthly payments. The second is the Mortgage Service Fee, which represents the right to handle the administrative tasks of the mortgage for a fee.

Mortgage management performed well in the first quarter

The mortgage agent handles mundane tasks on behalf of the ultimate investor in the mortgage loan. The servicer sends out bills and monthly statements, collects the money and forwards it to the investor, ensures property taxes are paid on time, and deals with the borrower if the loan becomes delinquent. If the borrower ends up defaulting, the repairer takes care of the foreclosure.

In exchange for performing these functions, the repairer receives a fee (usually about 0.25%) or a quarter of one percent of the outstanding mortgage balance per year. If the borrower makes the monthly payments on time, servicing is quite an easy task. A repairman looking after a $400,000 mortgage will be paid about $1,000 a year.

When interest rates rise, the repairer can expect to collect these service charges for longer. This is because it doesn’t make sense for a borrower to refinance the loan because the rates are higher. No one will refinance a 3% mortgage with a 5% mortgage. This gives more value to maintenance.

For New Residential, servicing accounts for 60% of first-quarter revenue, which is split between servicing fees and an increase in the value of its servicing portfolio. In the fourth quarter of 2021, maintenance accounted for only 28% of revenue. Total services revenue increased from $310 million in the fourth quarter of 2021 to $1.03 billion in the first quarter of 2022.

The dividend is well covered

This increase in mortgage servicing also resulted in a 10% increase in book value per share to $12.56 per share. The quarterly dividend of $0.25 was well covered with basic earnings of $0.37 per share. At current levels, New Residential is paying an 8.7% dividend yield, which is pretty solid considering the earnings. The entire mortgage REIT and mortgage origination industry is suffering from a difficult macroeconomic environment and lackluster investor sentiment, but New Residential managed to increase book value per share by 10% amid a rate hike. The new residential is worth a look for income investors.

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Annaly Capital’s book value is shaken by the Fed https://medielys.com/2022/05/05/annaly-capitals-book-value-is-shaken-by-the-fed/ Thu, 05 May 2022 15:03:01 +0000 https://medielys.com/2022/05/05/annaly-capitals-book-value-is-shaken-by-the-fed/ JLast year was terrible for the mortgage real estate investment trusts (REITs) in general. The Federal Reserve has been buying mortgage-backed securities since the early days of the COVID-19 pandemic, which has helped bolster the book value of these companies. These policies are about to be reversed and mortgage REITs like Annaly Capital (NYSE: NLY) […]]]>

JLast year was terrible for the mortgage real estate investment trusts (REITs) in general. The Federal Reserve has been buying mortgage-backed securities since the early days of the COVID-19 pandemic, which has helped bolster the book value of these companies. These policies are about to be reversed and mortgage REITs like Annaly Capital (NYSE: NLY) saw their book values ​​depressed before the changes.

The Federal Reserve shifts from a tailwind to a headwind

The Federal Reserve has signaled that it is about to begin reducing the size of its balance sheet and will look towards selling mortgage-backed securities to achieve this. Annaly Capital is one of the big buyers of agency mortgage-backed (in other words, government-backed) securities, which are similar to Fed holdings.

Image source: Getty Images.

The Fed’s plan in the past has been to let its bond holdings mature, which will gradually reduce the balance over time. This time around, the Fed may choose to sell some of its stakes in the market. The first option would be preferable for mortgage REITs as no additional selling pressure will be added to the market. Uncertainty around the Fed’s plans weighed on mortgage-backed securities valuations in the first quarter of 2022, and Annaly’s holdings of agency mortgage-backed securities fell quite dramatically.

Annaly’s book value per share fell 15%

As of March 31, Annaly Capital reported book value had fallen to $6.77 per share from $7.97 at the end of 2021. This is a 15% drop, which is a lot for that the book value of a mortgage REIT changes in a quarter. The decline in book value per share was primarily driven by mortgage-backed securities which underperformed Treasuries.

Annaly CEO David Finkelstein said in the press release that the environment was “one of the most challenging for fixed income in decades.” Not only have rates increased, but the volatility of rates (in other words, the speed and distance at which they move) has also increased. Volatility is also bad for mortgage-backed securities, so Annaly suffered a double whammy.

Mortgage servicing rights helped offset some of the losses

On the positive side, the decline in mortgage-backed securities was offset by the company’s holdings of mortgage servicing rights, which is an esoteric asset whose value rises as rates rise. A mortgage agent handles the administrative duties of a mortgage – things like collecting monthly payments, making sure property taxes are paid, and dealing with defaulting borrowers.

The repairer receives a commission of 0.25% (or a quarter of one percent) of the outstanding balance of the loan. When rates rise, borrowers are unlikely to refinance, so the manager can expect to collect these fees for a longer period. Mortgage management assets are extremely popular right now and valuations are high.

It’s hard to like mortgage REITs in this environment just because the Fed is such a threat to them. That said, the whole sector has been under pressure for a year, and Annaly has fallen 28% since May 2021.

The dividend is covered…for now

Annaly said earnings available for distribution were $0.28 per share, meaning the $0.22 dividend is covered. At current levels, that gives the stock a yield of nearly 14%, which is hard to beat in this interest rate environment. The fact that the dividend remains well covered should reassure investors. For intrepid income investors, Annaly might be worth a look, but she will be subject to volatility thanks to Fed and economic data.

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Western Asset Mortgage Capital: Declining Book Value (NYSE:WMC) https://medielys.com/2022/05/02/western-asset-mortgage-capital-declining-book-value-nysewmc/ Mon, 02 May 2022 13:53:00 +0000 https://medielys.com/2022/05/02/western-asset-mortgage-capital-declining-book-value-nysewmc/ Dilok Klaisataporn/iStock via Getty Images Investment thesis Western Asset Mortgage Capital Company (NYSE: WMC) had a tough 2021 and 2022 looks awfully similar. Management began restructuring the company’s investment portfolio in the fourth quarter to exit equity ownership value-destroying assets in commercial lending and instead focus on residential real estate assets. They also had to […]]]>

Dilok Klaisataporn/iStock via Getty Images

Investment thesis

Western Asset Mortgage Capital Company (NYSE: WMC) had a tough 2021 and 2022 looks awfully similar. Management began restructuring the company’s investment portfolio in the fourth quarter to exit equity ownership value-destroying assets in commercial lending and instead focus on residential real estate assets. They also had to cut the dividend by 33% due to 2021 losses. I am neutral on WMC as I see the possibility that after the portfolio transition the company will return to profitability and management may slowly increase the book value. There’s only one downside: it’s a bit off right now due to the likelihood that the portfolio restructuring will end in late 2022.

business model

WMC is a microcap mortgage real estate investment trust. It is the 40th in terms of market capitalization among the 41 US MREITs listed on the stock exchange. The company went public in May 2012 and it has a total price return of -92.04% so far. The IPO price was $18.47 and now trades at around $1.5 per share. The biggest drop is due to the COVID-19 crisis. There was no liquidity in the MBS markets leading to margin calls and book value declines across the industry and WMC was heavily impacted by these market conditions. The credit-sensitive portion of their portfolio plummeted along with its book value and share price. WMC has become a much smaller mREIT than before the pandemic. The price rose from $10-11 per share to a shocking $2-2.5 per share just after the COVID-19 crash in March 2020. The company invests primarily in securitized commercial loans and whole residential loans . These 2 types of assets represent 88% of their current portfolio. Most of the company’s entire residential loans are in the West region (74.6%) while 81.2% of their commercial loans are concentrated in the Northeast region.

WMC investment portfolio

Presentation of the fourth quarter of 2021

Finances and income

Q4 and annual results

In December 2021, management made it clear that they wanted to make a major portfolio shift towards investments related to residential real estate. In the fourth quarter, we could have already seen this change, because looking only at the fourth quarter, 53.6% of the investments were residential whole loans, and another 10.4% were agency and non-agency RMBS. Management expects this portfolio transition to take at least 12 months. At the same time, the company is selling its commercial real estate portfolio assets, it has sold $27.5 million of non-agency CMBS, and management has also left a hotel, and the company will receive approximately $6.7 million from this sale.

The CMBS market collapsed in just a few weeks in 2020 due to the pandemic. “New issuance within CMBS fell 45% – led down 37%, SASB down 48% and CRE-CLO down 56% – due to lower issuer lending volumes as pandemic-related uncertainty persisted – Guggenheim.” Because of this, management had to suspend dividends to preserve some liquidity. I wouldn’t blame management for having a commercial loan portfolio, many other mREITs had the same thing however, the yield spread WMC’s net interest rate had been shrinking in the long term since 2016. I think that’s one of the main reasons why the portfolio collapsed so badly and management had no cash. Over the years, this net interest rate differential below the industry average has caused the liquidity crunch alongside the pandemic.Management is trying to refinance operations as quickly as possible with longer-term, fixed-rate loans to take advantage of rising interest rates my view is that if management is successful in restructuring residential real estate assets it could stabilize WMC’s place among mREITs due to residential real estate market expectations to rise years to to come. Total home sales and home prices are expected to increase in 2022 and 2023. According to expectationshousing stock will remain low (this is possible due to extreme increases in basic material and labor costs) while demand is expected to remain high, particularly in the Sunbelt region.

WMC had a tough fourth quarter and a tough 2021 and I don’t expect 2022 to be much better. The NII fell 46.8% in the fourth quarter from the previous quarter and 56.8% year-on-year. The company reported negative earnings of $0.11 per share and negative EPS of $0.21. The economic return to book value was also disastrous at -5.5% in the fourth quarter and the full year return was -18.1%. I think this trend is likely to continue in 2022 due to portfolio restructuring and more hawkish Fed policy.

Evaluation

In my opinion, the current share price reflects the transition of the portfolio and the company is valued at fair value. The price-to-book ratio fell from 0.7x at the start of 2022 to 0.45x at the end of April, while the year-to-date price return is -33.78%. The stock traded at an average P/E ratio of around 8x before the pandemic, but in 2022 the P/E ratio fell to 7.2x and in 2021 it fell further to 6.55x. However, this does not mean that the company is undervalued. At this time, I see no chance that the company can return to its pre-pandemic book value and pre-pandemic net interest income levels. After restructuring the portfolio, it is possible that the book value per share will start to increase, but that is at least 9 to 12 months away.

WMC price to books ratio

Looking for Alpha

WMC price and book value
Data by YCharts

Company specific risks

The biggest risk factor I see is portfolio restructuring. We can already see that several assets will be sold at a loss and that residential assets may not provide the expected return. This is why the stock has been under pressure for 8-9 months. Moreover, if the transition is not successful, the management will have to reduce the dividend again, which will not relieve the pressure on the company. We saw a yield curve inversion end of March. This is particularly bad news for WMC, because when short-term interest rates exceed long-term interest rates, the company’s borrowing costs can exceed its interest income. Rising long-term and short-term interest rates are currently unfavorable to the company. When short-term interest rates begin to rise, it will increase the amount of interest owed on repurchase agreements and the cost of funding will increase for WMC. Management is currently trying to solve this problem with the securitization of entire residential loans. When long-term interest rates rise significantly (and now that analysts expect The Fed will raise interest rates 6 times in 2022), the market value of WMC’s investments will decrease, and the term and weighted average life of investments will increase.

My take on the WMC dividend

Don’t be fooled by the ttm dividend yield of 14.97%, as management recently cut the dividend by 33%. WMC paid $0.06 per share, but management had no choice but to cut the dividend in March 2022 to $0.04 per share. This means that the company has a forward dividend yield of 10.88%. With this reduction, the dividend looks sustainable in the short term, but due to the restructuring of the company’s portfolio, I cannot predict with certainty a long-term trend in the payout ratio. It highly depends on how many assets will be sold at a loss, how interest rates will rise in the second half of 2022, and how short and long-term interest rates will behave towards each other. others. What I see at the moment is that the recent 33% dividend cut was enough to make the dividend sustainable for 2022.

WMC Dividend Payout Rate

The table is created by the author. All figures are taken from the company’s financial statements and SA earnings estimates.

WMC could hardly be a first choice for investors. At the moment I see many risks associated with restructuring the portfolio, but there is a chance that the company can complete the transition with minimal losses and then the new portfolio of primarily residential assets will do well in the rising interest rate environment. Management is also keen to reduce its funding costs to protect WMC from rising interest rates. However, I believe there are several other MREITs with similar dividend yields that are a much safer choice for investors looking for income. If you are looking for a stable residential MREIT, you might want to take a look at MFA Financial (MFA) with a diversified residential portfolio or PennyMac Mortgage Investment Trust (PMT) with a 12%+ dividend yield.

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Flow Capital Announces Early Payout and 9% Book Value Gain on Successful Investment https://medielys.com/2022/05/02/flow-capital-announces-early-payout-and-9-book-value-gain-on-successful-investment/ Mon, 02 May 2022 11:15:00 +0000 https://medielys.com/2022/05/02/flow-capital-announces-early-payout-and-9-book-value-gain-on-successful-investment/ Flux Capital Corp. TORONTO, May 02, 2022 (GLOBE NEWSWIRE) — Flow Capital Corp. (TSXV: FW) (“Flow Capital”) announced today that an investment made last year in a US-based software company has been repaid. The early exit is expected to generate a net gain of approximately US$1.7M (~CA$2.2M) in both early redemption fees and success-based exit […]]]>

Flux Capital Corp.

TORONTO, May 02, 2022 (GLOBE NEWSWIRE) — Flow Capital Corp. (TSXV: FW) (“Flow Capital”) announced today that an investment made last year in a US-based software company has been repaid. The early exit is expected to generate a net gain of approximately US$1.7M (~CA$2.2M) in both early redemption fees and success-based exit fees. This represents an increase in book value of approximately $0.07 per share, a gain of more than 9% from the reported book value of approximately $0.745/share at year-end December 2021.

“A prepayment like this is a reflection of the exponential growth that technology start-ups can experience with the help of our flexible growth capital. This result is also a testament to the strength of our origination capabilities and our ability to identify and fund high-yielding, high-growth companies. Finally, these types of investment successes highlight the creation of exceptional shareholder value that our business model can generate,” said Alex Baluta , CEO of Flow Capital.

Repaid principal along with realized gains will be reinvested in new, high-quality companies, seeking interest income and warrant-based equity gains, creating more value for Flow shareholders.

Flow Capital invites growing technology companies looking for lightweight founder-friendly growth capital to apply for funding directly on their website at www.flowcap.com/apply.

About the feed Capital

Flow Capital Corp. is a diversified alternative asset investor and advisor specializing in providing low-dilutive capital to emerging growth companies. For more information on Flow Capital, please visit www.flowcap.com.

For more information, please contact:

Flux Capital Corp.
Alex Baluta
Chief executive officer
alex@flowcap.com

1 Adelaide Street East, Suite 3002,
Box 171,
Toronto, Ontario M5C 2V9

Forward-looking information and statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or the current condition, but rather represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain. and outside the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates”, “expects” or “does not expect”, “is expected”, ” budget”, “planned”. “, “estimates”, “plans”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of these words and phrases or may contain statements that certain actions , events or results “may”, “could”, “would”, “might” or “will”, “will”, “will”, “will occur” or “will be achieved”. Forward-looking information contained herein may include, but not limited to, information regarding: forecast financial performance; including the Company’s view of the current and future performance of its portfolio, expenditures and operations; anticipated cash requirements and funding requirements anticipated sources of funding; future growth plans; royalty acquisition goals and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; outlook and business strategy; anticipated trends and challenges in the Company’s business and the markets in which it operates; the amount and timing of the payment of dividends by the Company; and the Company’s financial condition. By identifying such information and statements in this manner, the Company cautions the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results, level of activity, performance or achievements of the Company. be materially different from those expressed or implied by such information and statements.

An investment in securities of the Company is speculative and subject to a number of risks, including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s limited operating history; the Company’s ability to generate sufficient revenue; the Company’s ability to manage future growth; the limited diversification of the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases from new licensees; the Company’s dependence on the operations, assets and financial health of its investees; the Company’s limited ability to exercise control or direction over investees; potential defaults of beneficiary companies and the unsecured nature of the Company’s investments; the Company’s ability to enforce any default by an issuing company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company’s classification as a passive foreign investment company (“PFIC”); the Company’s ability to pay dividends in the future and the timing and amount of such dividends; dependence on key personnel, in particular the founders of the Company; dilution of shareholder interest by future financings; and general economic and political conditions; as well as the risks discussed in the Corporation’s joint management information circular dated May 2, 2018 and the risks discussed herein. Although the Company has attempted for identify important factors that could cause real results for to differ materially from those content in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Assumptions regarding the performance of the Canadian and U.S. economies over the next 24 months and how this will affect the Company’s business and its ability to identify and pursue new opportunities with new corporate issuers are important factors that the Company has taken into account when establishing its priorities and strategic objectives, and its business outlook.

Key assumptions include, but are not limited to: assumptions that the Canadian and US economies relevant to the Company’s investment focus will remain relatively stable over the next 12 to 24 months; that interest rates will not rise dramatically over the next 12 to 24 months; that the Company’s existing interests will continue to pay royalties to the Company as and when required; that the operations of the businesses held by the Company will not experience material adverse results; that the Company will continue to develop its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change materially in Canada and the United States; that more small and medium-sized private and public enterprises will continue to need access to other sources of capital; that the Company will be able to raise equity and/or debt financing on acceptable terms; and that the Company will have sufficient free cash flow to pay dividends. The Company has also assumed that access to capital markets will remain relatively stable, that capital markets will operate with normal levels of volatility, and that the Canadian dollar will not experience high volatility relative to the US dollar. To determine economic growth forecasts, the Company primarily takes into account historical economic data provided by the Canadian and US governments and their agencies. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurances or warranties can be assured that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this PRESS RELEASE are made as of the date of this PRESS RELEASE, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or mentioned herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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Flow Capital Announces Prepayment and Book Value of 9% https://medielys.com/2022/05/02/flow-capital-announces-prepayment-and-book-value-of-9/ Mon, 02 May 2022 11:15:00 +0000 https://medielys.com/2022/05/02/flow-capital-announces-prepayment-and-book-value-of-9/ TORONTO, May 02, 2022 (GLOBE NEWSWIRE) — Flow Capital Corp. (TSXV: FW) (“Flow Capital”) announced today that an investment made last year in a US-based software company has been repaid. The early exit is expected to generate a net gain of approximately US$1.7M (~CA$2.2M) in both early redemption fees and success-based exit fees. This represents […]]]>

TORONTO, May 02, 2022 (GLOBE NEWSWIRE) — Flow Capital Corp. (TSXV: FW) (“Flow Capital”) announced today that an investment made last year in a US-based software company has been repaid. The early exit is expected to generate a net gain of approximately US$1.7M (~CA$2.2M) in both early redemption fees and success-based exit fees. This represents an increase in book value of approximately $0.07 per share, a gain of more than 9% from the reported book value of approximately $0.745/share at the end of 2021.

“A prepayment like this is a reflection of the exponential growth that technology start-ups can experience with the help of our flexible growth capital. This result is also a testament to the strength of our origination capabilities and our ability to identify and fund high-yielding, high-growth companies. Finally, these types of investment successes highlight the creation of exceptional shareholder value that our business model can generate,” said Alex Baluta , CEO of Flow Capital.

Repaid principal along with realized gains will be reinvested in new, high-quality companies, seeking interest income and warrant-based equity gains, creating more value for Flow shareholders.

Flow Capital invites growing technology companies looking for lightweight, founder-friendly growth capital to apply for funding directly on their website at www.flowcap.com/apply.

About the feed Capital

Flow Capital Corp. is a diversified alternative asset investor and advisor specializing in providing low-dilutive capital to emerging growth companies. For more information about Flow Capital, please visit www.flowcap.com.

For more information, please contact:

Flux Capital Corp.
Alex Baluta
Chief executive officer
alex@flowcap.com

1 Adelaide Street East, Suite 3002,
Box 171,
Toronto, Ontario M5C 2V9

Forward-looking information and statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities laws and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or the current condition, but rather represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain. and outside the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates”, “expects” or “does not expect”, “is expected”, ” budget”, “planned”. “, “estimates”, “plans”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of these words and phrases or may contain statements that certain actions , events or results “may”, “could”, “would”, “could” or “will”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but without limitation, information regarding: forecast financial performance; including the Company’s opinion regarding the current and future performance of its portfolio, its expenses and its operations; anticipated cash requirements and the need for additional financing anticipated sources of funding future growth plans royalty acquisition targets and proposed or completed royalty transactions estimated operating costs estimated market drivers and demand outlook and strategy business gie; anticipated trends and challenges in the Company’s business and the markets in which it operates; the amount and timing of the payment of dividends by the Company; and the Company’s financial condition. By identifying such information and statements in this manner, the Company cautions the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results, level of activity, performance or achievements of the Company. be materially different from those expressed or implied by such information and statements.

An investment in securities of the Company is speculative and subject to a number of risks, including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s limited operating history; the Company’s ability to generate sufficient revenue; the Company’s ability to manage future growth; the limited diversification of the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases from new licensees; the Company’s dependence on the operations, assets and financial health of its investees; the Company’s limited ability to exercise control or direction over investees; potential defaults of beneficiary companies and the unsecured nature of the Company’s investments; the ability of the Company to enforce any default by an issuing company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company’s classification as a passive foreign investment company (“PFIC”); the Company’s ability to pay dividends in the future and the timing and amount of such dividends; dependence on key personnel, in particular the founders of the Company; dilution of shareholder interest by future financings; and general economic and political conditions; as well as the risks discussed in the Corporation’s joint management information circular dated May 2, 2018 and the risks discussed herein. Although the Company has attempted for identify important factors that could cause real results for to differ materially from those content in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Assumptions regarding the performance of the Canadian and U.S. economies over the next 24 months and how this will affect the Company’s business and its ability to identify and pursue new opportunities with new corporate issuers are important factors that the Company has taken into account when establishing its priorities and strategic objectives, and its business outlook.

Key assumptions include, but are not limited to: assumptions that the Canadian and US economies relevant to the Company’s investment focus will remain relatively stable over the next 12 to 24 months; that interest rates will not rise dramatically over the next 12 to 24 months; that the Company’s existing interests will continue to pay royalties to the Company as and when required; that the operations of the businesses held by the Company will not experience material adverse results; that the Company will continue to develop its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change materially in Canada and the United States; that more small and medium-sized private and public enterprises will continue to need access to other sources of capital; that the Company will be able to raise equity and/or debt financing on acceptable terms; and that the Company will have sufficient free cash flow to pay dividends. The Company has also assumed that access to capital markets will remain relatively stable, that capital markets will operate with normal levels of volatility, and that the Canadian dollar will not experience high volatility relative to the US dollar. To determine economic growth forecasts, the Company primarily takes into account historical economic data provided by the Canadian and US governments and their agencies. Although the Company believes that the assumptions and factors used in the preparation of, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurances or warranties can be assured that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this PRESS RELEASE are made as of the date of this PRESS RELEASE, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or mentioned herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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SOFI stock could drop 36.5% to 80% of its book value during a recession https://medielys.com/2022/04/26/sofi-stock-could-drop-36-5-to-80-of-its-book-value-during-a-recession/ Tue, 26 Apr 2022 14:43:10 +0000 https://medielys.com/2022/04/26/sofi-stock-could-drop-36-5-to-80-of-its-book-value-during-a-recession/ Credit: Michael Vi/Shutterstock SoFi Technologies, Inc. (NASDAQ:SOFI) is very enthusiastic about its expectations for 2022. The last quarter, its planned slideshow adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will increase from $30 million in 2021 to $180 million in 2022. The only problem is that the Federal Reserve (Fed) is currently raising rates. […]]]>

Credit: Michael Vi/Shutterstock

SoFi Technologies, Inc. (NASDAQ:SOFI) is very enthusiastic about its expectations for 2022. The last quarter, its planned slideshow adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will increase from $30 million in 2021 to $180 million in 2022. The only problem is that the Federal Reserve (Fed) is currently raising rates. That could cloud its outlook when it releases its first-quarter (Q1) lending results on May 10. As a result, SOFI stock could become vulnerable.

However, it’s not like this danger to SoFi’s lending and earnings outlook isn’t already reflected in SOFI’s actions. For example, it is near its low for the year at $6.55 per share on April 25, down 58.6% for the year. This shows that investors are not very enthusiastic about the stock’s future prospects.

But have things been overdone on the downside for SOFI stocks? For example, based on Yahoo! Finance statistics, it trades for just 1.33 times book value and 5.37 times sales. Based on of the morning star analysis, shares traded for 14.6 times sales last year on average. So, maybe SOFI stock is cheap here.

Valuation of SOFI shares based on book value

However, we need to focus on the details. First, the company reported that its equity was $4.377 billion at the end of 2021. Given that its market capitalization (cap) as of April 25 is $5.238 billion, that puts it at a price accounting (P/B) metric value at only 1.20x, not 1.33 times, as Yahoo! Finance reports. The problem here, however, is that adjusted EBITDA earnings will not necessarily translate into positive net earnings and higher book value (i.e. equity) for 2022. Therefore, the P value /B could actually be higher if equity falls in the first quarter and thereafter. This could lead to a decline in the stock price.

Here’s a scenario that could occur: if higher Fed interest rates reduce loan volume and earnings at Sofi, it could lead to lower adjusted EBITDA and potentially lower book value. Let’s say it drops 5% to $4.158 billion. Next, let’s say the market decides to price financial asset companies like SOFI at a price below book value. This could happen if they assumed that profits and loan losses could lead to an even greater decline in book value. This often happens during recessions.

Therefore, at 80% of book value, the market capitalization of SOFI shares would fall to $3.326 billion. That’s down 36.5% from the market capitalization of $5.238 billion. This implies that SOFI stock could drop more than a third further to $4.16 per share (i.e. 65.5% x $6.55 per share). So buyer beware of SOFI shares. Most investors should wait for the company to update its financial outlook on May 10.

As of the date of publication, Mark Hake did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

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Associated Capital announces preliminary book value of $41.62 to $41.82 per share for the first quarter https://medielys.com/2022/04/19/associated-capital-announces-preliminary-book-value-of-41-62-to-41-82-per-share-for-the-first-quarter/ Tue, 19 Apr 2022 20:15:00 +0000 https://medielys.com/2022/04/19/associated-capital-announces-preliminary-book-value-of-41-62-to-41-82-per-share-for-the-first-quarter/ Associated Capital Group, Inc. (“AC” or the “Company”) today announced its first quarter preliminary book value range of $41.62 to $41.82 per share. This compares to $42.48 per share as of December 31, 2021 and $41.22 as of March 31, 2021. Assets under management were $1.84 billion as of March 31, 2022, compared to $1.50 […]]]>

Associated Capital Group, Inc. (“AC” or the “Company”) today announced its first quarter preliminary book value range of $41.62 to $41.82 per share. This compares to $42.48 per share as of December 31, 2021 and $41.22 as of March 31, 2021.

Assets under management were $1.84 billion as of March 31, 2022, compared to $1.50 billion as of March 31, 2021.

Associated Capital will release further details on its financial results in early May.

About Associated Capital Group, Inc.

Associated Capital, based in Greenwich, Connecticut, is a diversified global financial services firm that provides alternative investment management through Gabelli & Company Investment Advisers, Inc. (“GCIA” f/k/a Gabelli Securities, Inc. .). We have also reserved exclusive capital for our direct investment activities which invest in new and existing businesses. The direct investment business is developed around three main pillars: Gabelli Private Equity Partners, LLC (“GPEP”), established in August 2017 with an authorized capital of $150 million as a “fundless” sponsor; the SPAC (Special Purpose Acquisition Vehicles Gabelli) activity, launched in April 2018; and Gabelli Principal Strategies Group, LLC (“GPS”), created to pursue strategic operational initiatives.

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contains “forward-looking statements”. Forward-looking statements reflect our current expectations or our forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe” and other words and terms of similar meaning . They also appear in any discussion of future operational or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings and financial results. Although we believe that we base our expectations and beliefs on reasonable assumptions within the limits of what we currently know about our business and operations, the economy and other conditions, there can be no assurance that our actual results will not differ not noticeably of what we expect or believe. Accordingly, you should proceed with caution when relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

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