Brook Taub, chairman and CEO, and Seth Taube, director, each purchased 223,063 shares of Medley Capital Corp. (MCC, Financial) in eight separte transactions between March 9 and March 17. They paid an average price of $7.50 per share.
Following these purchases, Brook Taube now owns 2,949,748 shares and Seth Taube owns 2,937,258 shares.
Headquartered in New York City, Medley Capital is an externally managed, non-diversified closed-end management investment company. The company’s investment portfolio consists of senior secured first lien loans and senior second lien loans.
The company's investment objective is to generate current income and capital appreciation by lending directly to privately held middle-market companies to help them fund acquisitions, growth initiatives and working capital requirements or in connection with recapitalization or other refinancing transactions.
Medley Capital has a market cap of $414.55 million, a price-earnings (P/E) ratio of 22.27, an enterprise value of $822.89 million, a price-book (P/B) ratio of 0.81 and a dividend yield of 12.61.
According to GuruFocus, Medley Capital has a 6 of 10 financial strength rating with a cash-debt ratio of 0.20. It has an equity-asset ratio of 0.50, an interest coverage ratio of 0.57 and a Piotroski F-Score of 5, which indicates its financial situation is typical for a stable company.
The company has an 8 of 10 profitability and growth rating with an operating margin of 21.94%. It has a net margin of 21.61%, a return on equity (ROE) of 3.30%, a return on assets (ROA) of 1.64% and three-year revenue growth of -13.20%.
Over the past five years, Medley Capital has averaged a 16.59% increase in revenue, a -44.96% decrease in net income, -28.07% reduction in earnings per share and -52.58% reduction in cash flow.
The company’s market price has declined an estimated 37% since Jan. 31, 2011.
The company reported good fourth quarter and fiscal 2016 results.
In addition to reporting another consistent quarter of earnings, Medley's assets under management increased over 6% to $5.3 billion.
Total revenues for the quarter increased by $2.3 million to $18.3 million from the same period in 2015. The increase was due primarily to an accrual of performance fee revenue, which was partly offset by a decrease in management fees.
Total expenses from operations for the quarter decreased by $0.7 million to $9.2 million from the same period in 2015. Total revenues increased by $8.6 million to $76 million for the year.
The company has also been gaining momentum. Since Feb. 15, the stock has gained an estimated 22%.
Medley Capital's dividend yield is 12.63%, which is ranked higher than 95% of other companies in the global asset management industry.
Such a high dividend yield, however, should be considered a warning sign to investors because it may not be sustainable in the long term.
Disclosure: Author does not own any shares of this company.
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