Hercules Capital: The Premium To NAV Is Unhinged In The Current Zeitgeist Of Chaos

Pacifica Yield
12.42K Followers
(7min)

Summary

  • Hercules Capital's net asset value rose to $11.66 per share as of the end of its fiscal 2024 fourth quarter, with shares trading at a 45% premium to NAV.
  • The premium was historically justified by HTGC's strong portfolio, robust US GDP growth, low non-accrual loans, and high-interest income from elevated Fed funds rates.
  • This previously bullish economic reality could be set to deteriorate materially. The BDC is now faced with a bleak economic context with a premium that historically gets crushed in recessions.
Ancient sculpture of Hercules and Nessus. Florence, Italy. Head close-up

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Hercules Capital, Inc. (NYSE:HTGC) last reported a fiscal 2024 fourth quarter net asset value of $11.66 per share, up 26 cents per share sequentially and by roughly 2.1% over its year-ago comp. The common shares, down 15% year-to-date, at $17.15 per share currently trade

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