Why Medley Capital (MCC) Stock Is Down Today

NEW YORK (TheStreet) -- Medley Capital  (MCC) fell Thursday after the company priced its public offering of 5 million shares of common stock.

The company priced the offering at $13.02 a share. The offering includes a 30-day option for underwriters to purchase up to an additional 750,000 shares. Medley Capital plans to use the net proceeds from the offering to repay part of its outstanding debt under its revolving credit facility and to help fund new investment opportunities.

The stock was down 2.18% to $13 at 10:11 a.m. More than 4.8 million shares changed hands, compared to the average volume of 577,731.

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Separately, TheStreet Ratings team rates MEDLEY CAPITAL CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MEDLEY CAPITAL CORP (MCC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MCC's very impressive revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues leaped by 61.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MEDLEY CAPITAL CORP 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. 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 ($1.59 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 425.5% when compared to the same quarter one year prior, rising from $3.16 million to $16.59 million.
  • The gross profit margin for MEDLEY CAPITAL CORP is rather high; currently it is at 68.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.57% significantly outperformed against the industry average.
  • Net operating cash flow has increased to -$64.69 million or 41.32% when compared to the same quarter last year. In addition, MEDLEY CAPITAL CORP has also vastly surpassed the industry average cash flow growth rate of -86.94%.
  • You can view the full analysis from the report here: MCC Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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