THL Credit Inc. Stock Upgraded (TCRD)

NEW YORK ( TheStreet) -- THL Credit (Nasdaq: TCRD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • TCRD's very impressive revenue growth greatly exceeded the industry average of 21.1%. Since the same quarter one year prior, revenues leaped by 88.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TCRD's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • THL CREDIT INC 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 year. We feel that this trend should continue. During the past fiscal year, THL CREDIT INC increased its bottom line by earning $1.19 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.19).
  • 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 74.5% when compared to the same quarter one year prior, rising from $4.06 million to $7.08 million.
  • The gross profit margin for THL CREDIT INC is rather high; currently it is at 58.20%. Regardless of TCRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TCRD's net profit margin of 64.80% significantly outperformed against the industry.
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THL Credit, Inc. is a private equity and mezzanine firm specializing in mature, bridge, PIPES, industry consolidation, acquisition, recapitalization, change of control transactions, and growth capital investments in both sponsored and unsponsored middle-market companies. The company has a P/E ratio of 12.5, above the average financial services industry P/E ratio of 10.7 and below the S&P 500 P/E ratio of 17.7. THL Credit has a market cap of $260.6 million and is part of the financial sector and financial services industry. Shares are up 3.7% year to date as of the close of trading on Tuesday.

You can view the full THL Credit Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff

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