MCG Capital Corp (NASDAQ:MCGC) Gets Downgraded


MCG Capital Corp (NASDAQ:MCGC) which is an asset management firm based in Arlington, VA has seen its stock vacillate on the back of flat results the firm announced for its 4Q and full year operations on 5th March.

P.T Reduced By Keefe & FBR Capital

This resulted in investment firm Keefe, Bruyette & Woods reduced their price target on the stock and also issued guidance which bordered on a downgrade recommendation. On the heels of  Keefe, Bruyette & Woods  thumbs down, FBR Capital Markets also announced that it has cut its price on MCG Capital Corp (NASDAQ:MCGC) to $4 from previous recommendation of $5.5.

 The PT decrease comes on the back of the wealth management firm reporting loss per share of 26 cents for the fourth quarter. Net loss for the 4Q was $18.4 million, while its net income for the full year was $1.2 million, which translated into 2 cents per share earnings. Revenue for the 4Q came in at $11.2 million which was again pretty low compared to the $12.08 million street expectation. The 4Q13 revenue represented a 15.2 percent dip over its 4Q12 revenue.

CEO Explains

MCG Capital Corp (NASDAQ:MCGC) President, Chief Executive Officer, Chief Operating Officer, Director B. Hagen Saville while explaining the mixed results for the Q, has been quoted to have said that, “Originations for the quarter totaled $37 million including three sub-debt transactions to two new issuers; portfolio monetization was $40 million for the quarter. Current yield on the portfolio was 12.1% a slight decline from last quarter; reflects [ph]one asset on non-accrual of $4.5 million loan to Advanced Sleep”.

12 Cents Dividend Announced

As part of the earnings call, MCG Capital Corp (NASDAQ:MCGC) also announced that its board of directors led by Chairman of the Board Richard W. Neu has authorized a quarterly dividend payout of 12.5 cents per share which will get paid on 28th March to all shares holders on record as of 14th March. The stock will go ex-dividend on 12th March.


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