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Time To Look At This Asset Manager

Jan. 22, 2014 8:17 AM ETHCAP1 Comment
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Long/Short Equity, Portfolio Strategy

Seeking Alpha Analyst Since 2012

Founded in 2003, StockPromoters.com has tracked hundreds of thousands of promotions by thousands of promoters and counting. Stock Promotion can be an effective and necessary tool if done correctly and responsibly, and it can be crippling to both the public company and the promoter if done recklessly. StockPromoters.com Tracks thousands of promoters. We display their compensation and we know if they are actually the ones behind that public company despite what they may or may not disclose to the public. We cut through the tape and get right to the heart of the matter. Q. What is the purpose of the promotion? Is it being done to increase shareholder and corporate value in order to better serve the public company? Or is it to create liquidity so insiders and “friendly” shareholders can unload their position? Q. Does the promoter have any "skin in the game”? Are they paid in Cash? Free Trading Stock? Restricted Stock? Will he be selling his stock, or holding it for the long term? Do they believe in the company they're promoting? Q. What can you expect form this promoter? Is this a "Pump and Dump”, or is this a gradual marketing campaign to attract new shareholders? Do you want to know who the best promoters are and who you should be following? Do you want to know who the worst is and who you should avoid like the plague? All of this and more is answered by utilizing our proprietary stock promotion tracking system which is behind the StockPromoters.com website.

The end of the year gives us a moment to take a break from the daily stresses from work and life, to come together with family and friends and remembering to be thankful. In addition to basking in relaxation, investors should take this opportunity to review their portfolios and get together their 2014 investment plans. Some questions that you should ponder are: Should I take some profits here? Is my wish list up to date? Has the fundamental/technical analysis for my portfolio holdings changed? Am I maximizing my returns? It is important to answer these kinds of questions because it will help provide you with a game plan before the year is out and the investor then can go into 2014 with more confidence in their strategy.

As mentioned above, it is important to review your wish list of stocks/mutual funds, to make sure they still warrant being on your wish list. Having an updated wish list is imperative because at some point we will see a correction in the markets and it is important that for you to be able to take advantage of the correction using an updated list if you choose to dollar cost average.

One such stock that I would suggest you take a look at for a possible addition to your wish list is Harvest Capital Credit Corporation (NASDAQ: HCAP). Harvest Capital is a finance company that provides capital to small businesses. Keep in mind that businesses like Harvest Capital do well during upbeat economic conditions and can get pummeled during downturns. They are economically sensitive because small businesses are not going to be borrowing hand over fist, in theory, during a downturn and period of economic uncertainty.

Turning to the fundamentals, the company has a market cap of $64 million and is currently rated a "strong buy" from analysts. Harvest Capital has a price to earnings of 3.9 and a forward price to earnings of 9.69. PEG is undervalued at .78, the stock currently trades below book value as seen with a price to book of .71, and a price to cash of 1.39. Harvest Capital has no debt and pays an eye popping 8.95 percent annual dividend. This is backed by their monster cash load, as seen through a cash per share of $10.83. Earnings are expected to rise 498percent this year, 34.22 percent next year, and 5 percent over the next five years. Margins are outstanding with an operating margin of 62.3 percent and a profit margin of 96.7 percent.

This micro-cap definitely has some interesting metrics that could warrant HCAP to be placed on your watch list. Where else are you going to find a stock that yields almost 9 percent and trades below book value? The catch here is that Harvest Capital is very economically sensitive, as previously stated. An unexpected economic downturn could yield some significant losses. Be sure to do your own research to determine whether or not a stock like Harvest Capital is right for your risk tolerance and your portfolio.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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