Capital Southwest (NASDAQ:CSWC) Shares Gap Up After Better-Than-Expected Earnings

Capital Southwest Co. (NASDAQ:CSWCGet Rating) shares gapped up before the market opened on Tuesday following a stronger than expected earnings report. The stock had previously closed at $18.31, but opened at $18.79. Capital Southwest shares last traded at $18.36, with a volume of 63,682 shares traded.

The asset manager reported $0.65 earnings per share for the quarter, topping analysts’ consensus estimates of $0.62 by $0.03. The company had revenue of $37.20 million for the quarter, compared to analyst estimates of $35.91 million. Capital Southwest had a return on equity of 12.21% and a net margin of 33.53%. The firm’s quarterly revenue was up 13.4% compared to the same quarter last year. During the same quarter last year, the company earned $0.50 earnings per share.

Capital Southwest Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, June 30th. Shareholders of record on Thursday, June 15th will be paid a dividend of $0.59 per share. This represents a $2.36 dividend on an annualized basis and a yield of 12.86%. The ex-dividend date of this dividend is Wednesday, June 14th. This is a positive change from Capital Southwest’s previous quarterly dividend of $0.58. Capital Southwest’s dividend payout ratio (DPR) is 154.74%.

Wall Street Analyst Weigh In

A number of equities analysts have commented on the company. TheStreet lowered Capital Southwest from a “b-” rating to a “c” rating in a research note on Monday, January 30th. B. Riley raised their price objective on Capital Southwest from $20.00 to $21.50 and gave the stock a “buy” rating in a research note on Wednesday, February 1st. UBS Group assumed coverage on Capital Southwest in a research note on Tuesday, April 11th. They set a “neutral” rating and a $19.00 price objective on the stock. JMP Securities restated a “market outperform” rating and set a $22.00 price objective on shares of Capital Southwest in a research note on Friday, April 14th. Finally, StockNews.com lowered Capital Southwest from a “hold” rating to a “sell” rating in a research note on Wednesday. One research analyst has rated the stock with a sell rating, one has assigned a hold rating and three have assigned a buy rating to the company’s stock. According to MarketBeat.com, Capital Southwest has an average rating of “Hold” and a consensus target price of $21.30.

Institutional Investors Weigh In On Capital Southwest

A number of large investors have recently modified their holdings of the business. Millennium Management LLC boosted its holdings in shares of Capital Southwest by 23.3% in the 4th quarter. Millennium Management LLC now owns 875,326 shares of the asset manager’s stock valued at $14,968,000 after purchasing an additional 165,544 shares in the last quarter. Punch & Associates Investment Management Inc. boosted its holdings in shares of Capital Southwest by 13.8% during the 1st quarter. Punch & Associates Investment Management Inc. now owns 851,447 shares of the asset manager’s stock valued at $15,139,000 after acquiring an additional 103,390 shares in the last quarter. Sanders Morris Harris LLC boosted its holdings in shares of Capital Southwest by 0.7% during the 1st quarter. Sanders Morris Harris LLC now owns 723,089 shares of the asset manager’s stock valued at $12,857,000 after acquiring an additional 5,175 shares in the last quarter. Zuckerman Investment Group LLC boosted its holdings in shares of Capital Southwest by 4.0% during the 1st quarter. Zuckerman Investment Group LLC now owns 657,576 shares of the asset manager’s stock valued at $11,692,000 after acquiring an additional 25,056 shares in the last quarter. Finally, Van ECK Associates Corp boosted its holdings in shares of Capital Southwest by 14.3% during the 1st quarter. Van ECK Associates Corp now owns 502,208 shares of the asset manager’s stock valued at $8,929,000 after acquiring an additional 62,981 shares in the last quarter. Institutional investors and hedge funds own 26.36% of the company’s stock.

Capital Southwest Stock Performance

The company has a debt-to-equity ratio of 0.58, a quick ratio of 0.15 and a current ratio of 0.15. The company has a market cap of $634.18 million, a price-to-earnings ratio of 13.39 and a beta of 1.19. The company has a fifty day moving average of $17.75 and a two-hundred day moving average of $18.16.

About Capital Southwest

(Get Rating)

Capital Southwest is a publicly–owned business development company with total assets of $496 million as of June 30, 2010. We provide patient capital to exceptional businesses with significant growth potential. As a public company, we have the flexibility to hold investments indefinitely, which has provided the management teams of our holdings a stable ownership platform since we were founded in 1961.

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