NEW YORK (TheStreet) -- Medley Capital Corp (MCC) is looking as though it will close Friday's session lower, after plunging 4.3% to $13.72. By mid-afternoon, 5.3 million shares had changed hands, more than 16 times its three-month average daily trading volume.
On Thursday, the New York-based business announced it intended to publicly offer 6 million shares of its common stock. The company will also grant the underwriters a 30-day option to purchase an additional 900,000 shares.
Funds raised from the public offering will be used to repay a portion of Medley's revolving credit facility, to fund new investment opportunities and for other general corporate purposes.
Goldman Sachs, Barclays, Credit Suisse and JPMorgan are acting as joint book-running managers for the offering.
TheStreet Ratings team rates MEDLEY CAPITAL CORP as a Buy with a ratings score of B+. The team has this to say about their recommendation:
"We rate MEDLEY CAPITAL CORP (MCC) a BUY. This is driven by multiple 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, attractive valuation levels, expanding profit margins, growth in earnings per share and compelling growth in net income. 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:
- MCC's very impressive revenue growth greatly exceeded the industry average of 14.8%. Since the same quarter one year prior, revenues leaped by 95.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MEDLEY CAPITAL CORP has improved earnings per share by 16.2% 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. We feel that this trend should continue. During the past fiscal year, MEDLEY CAPITAL CORP increased its bottom line by earning $1.32 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $1.32).
- 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 106.1% when compared to the same quarter one year prior, rising from $7.34 million to $15.13 million.
- The gross profit margin for MEDLEY CAPITAL CORP is rather high; currently it is at 67.42%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 55.05% significantly outperformed against the industry average.
- You can view the full analysis from the report here: MCC Ratings Report