Insider Steven Novak, director and 10% owner of TICC Capital (TICC, Financial), purchased 5,000 shares of the company for $7.22 per share on March 7, according to the Securities and Exchange Commission Form 4 filing.
TICC Capital has a market cap of $370.14 million, a price-earnings (P/E) ratio of 3.89, an enterprise value of $581.85 million, a price-book (P/B) ratio of 1.15 and a Graham number of $16.13.
Headquartered in Greenwich, Connecticut, TICC Capital is a business development company that invests in middle-market companies in the U.S. with revenues of less than $200 million and companies with small enterprise values of less than $300 million, combined with experienced management teams, strong competitive positions and profitable cash flows.
The fund focuses on companies operating in the fields of computer software and hardware, networking systems, semiconductors, semiconductor capital equipment, diversified technology, medical device technology, information technology infrastructure or services, internet, telecommunications and equipment and media.
According to GuruFocus, TICC Capital has a 6 out of 10 financial strength rating with a cash to debt ratio of 0.04, an equity-asset ratio of 0.63, an interest coverage ratio of 1.20 and a Piotroski F-Score of 7 indicating the company is in a very healthy financial situation.
TICC Capital has a 6 out of 10 profitability and growth rating. It has an operating margin of 48.70%, a net margin of 223.78%, a return on equity (ROE) of 31.51%, three-year revenue growth of -17.30% and three-year EBITDA growth of -24.80%.
Novak may have purchased the shares for the following reasons:
- The company’s P/E ratio is close to its five-year low. Legendary investor John Neff recommended purchasing securities with low P/E ratios.
- TICC’s dividend yield is 16.18, ranking it higher than 95% of the companies in the global asset management industry.
- The company's Graham number is $16.13. This is what the defensive investor should pay for the stock according to the legendary Benjamin Graham.
- The company is trading below its intrinsic value according to the Peter Lynch chart below.
Disclosure: Author does not own any shares of this company.
Start a free seven-day trial of Premium Membership to GuruFocus.
