From the press release: Third Quarter 2019 Summary Highlights
- Net Asset Value of $315.5 million, or $15.36 per share
- Investment portfolio totaling $527.5 million
- STRS (state teachers retirement system of Ohio) JV investment portfolio totaling $54.9 million
- Net investment income of $8.7 million, or $0.421 per share
- Core net investment income of $8.3 million, or $0.403 per share
- Third quarter distribution of $0.355 per share
From SeekingAlpha - WhiteHorse Finance (
WHF): Q3
Non-GAAP EPS of $0.40 beats by $0.05; GAAP EPS of $0.42
beats by $0.07. Revenue of $17.75M (+15.9% Y/Y)
beats by $1.26M.
From Yahoo Finance
Earnings History | 12/30/2018 | 3/30/2019 | 6/29/2019 | 9/29/2019 |
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EPS Est. | 0.36 | 0.37 | 0.37 | 0.35 |
EPS Actual | 0.39 | 0.37 | 0.36 | 0.40 |
Difference | 0.03 | 0.00 | -0.01 | 0.05 |
Surprise % | 8.30% | 0.00% | -2.70% | 14.30% |
Revenue Estimate | Current Qtr. (Dec 2019) | Next Qtr. (Mar 2020) | Current Year (2019) | Next Year (2020) |
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No. of Analysts | 7 | 6 | 7 | 7 |
Avg. Estimate | 16.84M | 17.33M | 66.36M | 71.68M |
Low Estimate | 15.90M | 16.20M | 65.60M | 65.10M |
High Estimate | 17.67M | 18.29M | 67.00M | 75.89M |
Year Ago Sales | 16.67M | 15.92M | 63.25M | 66.36M |
Sales Growth (year/est) | 1.00% | 8.80% | 4.90% | 8.00% |
| Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Realized & Unrealized Gains | -1.800 | 0.993 | -0.606 | -3.100 | 15.685 | 14.447 | 5.275 | 1.684 | 3.106 | 0.339 | 3.107 | 3.568 | 1.326 | 1.703 | -1.230 | -18.652 | -4.234 | -0.136 | -0.561 |
Realized & Unrealized Gains/share | -0.0876 | 0.0483 | -0.0295 | -0.15
| 0.7634 | 0.7036 | 0.2569 | 0.0820 | 0.1514 | 0.0184 | 0.1697 | 0.1949 | 0.724 | 0.093 | -0.067 | -1.220 | -0.2826 | -0.0091 | -0.0374 |
Performance-based incentive fees | 1.714 | 2.055 | 1.751 |
| 4.865 | 3.891 | 2.114 | 3.277 | 1.487 | 0.158 | 1.631 | 1.638 | 1.817 | 1.609 | 1.691 | 0.103 | 1.415 | 1.472 | 1.333 |
Performance-based incentives/share | 0.0834 | 0.1000 | 0.0852 |
| 0.2368 | 0.1895 | 0.1030 | 0.1596 | 0.0725 | 0.0086 | 0.0891 | 0.0895 | 0.0996 | 0.0879 | 0.0924 | 0.0063 | 0.0944 | 0.0982 | 0.0890 |
In 8 out of the last 19 quarters, WHF has had negative Realized and Unrealized Gains.
The last three year NAV trend is +15.0.% (best in sector) compared to the sector average of -6.63%. WHF has a smaller and non-granular portfolio - which logically would be more prone to extreme movements.
| Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Total investment income | 17.755 | 15.984 | 15.924 | 16.669 | 15.318 | 14.654 | 16.605 | 13.920 | 13.024 | 14.285 | 13.575 | 13.359 | 14.030 | 13.050 | 13.410 | 11.935 | 11.707 | 12.162 | 11.271 |
Net investment income | 8.655 | 7.226 | 7.611 | 8.038 | 3.777 | 4.607 | 8.578 | 6.804 | 5.950 | 6.936 | 6.522 | 6.382 | 7.268 | 6.426 | 6.762 | 3.874 | 5.662 | 5.886 | 5.334 |
Investments @ fair value | 0.528 | 0.535 | 0.468 | 0.470 | 0.510 | 0.511 | 0.468 | 0.441 | 0.435 | 0.401 | 0.432 | 0.412 | 0.403 | 0.401 | 0.417 | 0.415 | 0.376 | 0.387 | 0.391 |
Wt Av Share Count | 20.546 | 20.546 | 20.546 | 20.546 | 20.546 | 20.532 | 20.532 | 20.532 | 20.518 | 18.342 | 18.304 | 18.304 | 18.304 | 18.304 | 18.304 | 16.327 | 14.983 | 14.983 | 14.983 |
TII/share | $0.8642 | $0.7780 | $0.7750 | $0.8113 | $0.7455 | $0.7137 | $0.8087 | $0.6780 | $0.6348 | $0.7788
| $0.7416 | $0.7298 | $0.7665 | $0.7130 | $0.7326 | $0.7310 | $0.7814 | $0.8117 | $0.7522 |
NII/share | $0.4212 | $0.3517 | $0.3704 | $0.3912 | $0.1838 | $0.2244 | $0.4178 | $0.3314 | $0.2900 | $0.3781 | $0.3563 | $0.3487 | $0.3971 | $0.3511 | $0.3694 | $0.2372 | $0.3779 | $0.3928 | $0.3560 |
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Dividend/share | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 | $0.3550 |
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NAV/share | $15.36 | $15.38 | $15.33 | $15.35 | $15.46 | $14.87 | $14.30 | $13.98 | $13.92 | $13.83 | $13.80 | $13.63 | $13.48 | $13.37 | $13.28 | $13.33 | $14.77 | $15.03 | $15.00 |
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Wt Av Yield | 11.0% | 11.3% | 11.7% | 11.9% | 11.9% | 12.0% | 12.0% | 11.9% | 11.9% | 11.9% | 11.8% | 11.8% | 12.1% | 11.9% | 11.9% | 11.8% | 11.6% | 11.7% | 11.4% |
NII/TII Ratio | 48.75% | 45.21% | 47.80% | 48.22% | 24.66% | 31.44% | 51.66% | 44.88% | 45.7% | 48.5% | 48.0% | 47.8% | 51.8% | 49.2% | 50.4% | 43.7% | 51.7% | 48.4% | 47.3% |
# Portfolio Companies | 48 | 47 | 41 | 39 | 36 | 36 | 34 | 32 | 31 | 30 | 30 | 29 | 28 | 30 | 31 | 29 | 26 | 26 | 29 |
Port Comp Leverage | 3.6x | 3.6x | 3.6x | 3.5x | 3.3x | 3.3x | 3.2x | 3.4x | 3.4x | 3.5x | 3.2x | 3.4x | 2.9x | 3.6x | 3.0x | 2.7x | 3.1x | 2.3x | 3.8x |
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PIK YTD income | 1.922 | 1.312 | 0.658 | 0.584 | 0.460 | 0.315 | 0.142 | 0.662 | 0.540 | 0.326 | 0.154 | 1.037 | 0.834 | 0.522 | 0.305 | 1.212 | 0.935 | 0.632 | 0.314 |
PIK income Quarter | 0.610 | 0.654 | 0.658 | 0.124 | 0.145 | 0.173 | 0.142 | .122 | .214 | .172 | .154 | .203 | .312 | .217 | .305 | .277 | .303 | .318 | .314 |
PIK/TII | 3.44% | 4.09% | 4.13% | 0.74% | 0.95% | 1.18% | 0.85% | 0.88% | 1.64% | 1.37% | 1.13% | 1.52% | 2.22% | 1.66% | 2.27% | 2.32% | 2.59% | 2.61% | 2.79% |
Non-accruals @ Fair Val | 8.480 | 21.317 | 0.103 | 0.103 | 0.103 | 0.103 | 0.119 | none | none | none | none | none | none | 6.997 | 7.262 | 7.262 | none | none | none |
Non-accruals % of Port | 1.61% | 4.00% | 0.0% | 0.0% | 0.0% | 0.02% | 0.03% | none | none | none | none | none | none | 1.74% | 1.74% | 1.75% |
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Oil & Gas % of Port. | 0.00% | 0.00% | 0.00% | 3.69% | 2.34% | 2.31% | 2.49% | 2.46% | 2.5% | 2.5% | 2.46% | 4.16% | 4.04% | 4.00% | 3.87% | 4.07% | 5.39% | 5.75% | 6.52% |
If there is a secret to WHF's success - I would make a guess that it is in the portfolio company Debt/EBITDA numbers. The lower the Debt/EBITDA, the safer the loan. Most BDCs fail to report that metric. I have no certainty that you are getting true apples to apples comparisons with that metric. But for comparison - ARCC Debt/EBITDA for Q3-19 was 5.7x; AINV was 5.43x; CGBD was 5.3x; FDUS was 4.7x; GSBD was 5.4x; PSEC was 4.59x (when PSEC looks good on a metric - one wonders what they did to manipulate that metric); PFLT was 4.3x in Q2-19; PNNT was 4.7x; SAR was 4.56x; and SUNS was 4.5x in Q1-19.
WHF has a superior NAV trend. On the other hand, WHF dramatically lacks NII consistency. Recently, that inconsistency has been a good thing.
| Q3-19 | Q2-19 | Q1-19 | Q4-18 | Q3-18 | Q2-18 | Q1-18 | Q4-17 | Q3-17 | Q2-17 | Q1-17 | Q4-16 | Q3-16 | Q2-16 | Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 |
Debt | 231.968 | 245.818 | 176.197 | 175.953 | 195.708 | 215.311 | 182.317 | 182.122 | 181.928 | 188.988 | 192.142 | 182.338 | 170.379 | 191.410 | 183.482 | 187.000 | 173.500 | 158.500 | 158.500 |
Debt/share | 11.2902 | 11.9643 | 8.5757 | 8.5639 | 9.5258 | 10.4866 | 8.8797 | 8.8702 | 8.8668 | 10.3035 | 10.4973 | 9.9616 | 9.3083 | 10.4573 | 10.0241 | 11.4534 | 11.5798 | 10.5787 | 10.5787 |
Debt/share to NAV | 73.50% | 77.79% | 55.94% | 55.79% | 61.62% | 70.52% | 62.10% | 65.80% | 63.7% | 74.5% | 76.1% | 73.09% | 69.05% | 78.21% | 75.48% | 85.92% | 78.40% | 70.38% | 70.52% |
Interest expense | 3.498 | 3.176 | 3.073 | 2.950 | 3.283 | 2.801 | 2.565 | 2.429 | 2.379 | 2.559 | 2.444 | 2.271 | 2.050 | 1.951 | 1.916 | 4.943 | 1.654 | 1.703 | 1.670 |
Interest expense/share | 0.1703 | 0.1546 | 0.1496 | 0.1436 | 0.1598 | 0.1364 | 0.1249 | 0.1183 | 0.1159 | 0.1395 | 0.1335 | 0.1241 | 0.1120 | 0.1066 | 0.1047 | 0.3028 | 0.1104 | 0.1137 | 0.1115 |
Interest expense/TII | 19.70% | 19.87% | 19.30% | 17.70% | 21.43% | 19.11% | 15.45% | 17.45% | 18.27% | 17.91% | 18.00% | 17.00% | 16.39% | 14.95% | 14.29% | n/a | 14.13% | 15.46% | 14.82% |
Annualized Int exp/Debt | 6.03% | 5.17% | 6.98% | 6.71% | 6.71% | 5.20% | 5.63% | 5.33% | 5.23% | 5.42% | 5.09% | 4.98% | 4.81% | 4.07% | 4.18% | n/a | 3.81% | 4.30% | 4.21% |
PWAY - Int exp/Debt | 497 bps | 613 bps | 472 bps | 519 bps | 519 bps | 680 bps | 637 bps | 657 bps | 667 bps | 648 bps | 671 bps | 682 bps | 729 bps | 783 bps | 772 bps | n/a | 779 bps | 740 bps | 719 bps |
WHF's Q2-17 interest rate on its credit facility was LIBOR + 2.75%. WHF has 6.5% senior notes sold as WHFBZ. |
WHF has lower than average leverage - which assists in have a lower than average interest expense to TII ratio.
At the current price of $14.29, the $1.42 dividend has a yield of 9.94% compared to the sector average of 9.77%. You would be a little late to the party if you purchased WHF now. One is still getting a good enough yield. The lack of granularity has helped on the way up - so it is likely to hurt on the way down.