NEW YORK (TheStreet) --Shares of Firsthand Technology Value Fund Inc. (SVVC - Get Report) are higher 10.25% to $21.58 on Friday after the investment company announced it has settled its proxy contest with Bulldog Investors LLC, the fund's largest shareholder group.
Under the terms of the settlement Firsthand has agreed to a $10 million common stock repurchase plan and to conduct a self-tender offer for at least $20 million worth of common stock to be completed by January 31, 2015.
As part of the agreement Bulldog Investors will withdraw its two nominees running for Firsthand's board of directors.
TheStreet Ratings team rates FIRSTHAND TECHNOLOGY VALU FD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIRSTHAND TECHNOLOGY VALU FD (SVVC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, compelling growth in net income, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SVVC's very impressive revenue growth greatly exceeded the industry average of 10.4%. Since the same quarter one year prior, revenues leaped by 65.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Capital Markets industry and the overall market, FIRSTHAND TECHNOLOGY VALU FD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 18987.2% when compared to the same quarter one year prior, rising from -$0.12 million to $22.10 million.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- FIRSTHAND TECHNOLOGY VALU FD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FIRSTHAND TECHNOLOGY VALU FD turned its bottom line around by earning $5.80 versus -$1.66 in the prior year. For the next year, the market is expecting a contraction of 87.1% in earnings ($0.75 versus $5.80).
- You can view the full analysis from the report here: SVVC Ratings Report
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