BlackRock Kelso Capital Corporation Stock Downgraded (BKCC)

NEW YORK ( TheStreet) -- BlackRock Kelso Capital Corporation (Nasdaq: BKCC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The gross profit margin for BLACKROCK KELSO CAPITAL CORP is currently very high, coming in at 79.10%. Regardless of BKCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BKCC's net profit margin of 59.20% significantly outperformed against the industry.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 46.1% when compared to the same quarter one year ago, falling from $38.92 million to $20.98 million.
  • Net operating cash flow has significantly decreased to -$46.21 million or 453.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

BlackRock Kelso Capital Corporation is a private equity firm specializing in investments in middle market companies. The firm invests in all industries. The company has a P/E ratio of 9.2, above the average financial services industry P/E ratio of 8.8 and below the S&P 500 P/E ratio of 17.7. BlackRock Kelso has a market cap of $696.6 million and is part of the financial sector and financial services industry. Shares are up 18.6% year to date as of the close of trading on Tuesday.

You can view the full BlackRock Kelso Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
null

If you liked this article you might like

Market Gauges Warn That the Rally's Fuel Tank Is Empty

3 Hold-Rated Dividend Stocks: AINV, BKCC, EVOL

3 Hold-Rated Dividend Stocks: BKCC, RWC, FIG

Today's Weak On High Volume Stock: BlackRock Capital Investment (BKCC)

3 Hold-Rated Dividend Stocks: BKCC, ELLO, TPVG