PennantPark Investment Corp.

Company Description

PennantPark develops business through both direct and mezzanine investments in mid-market companies. The company makes non-control investments as well and utilized many forms of debt and equity vehicles to fund these mostly private companies.

The firm has about 7% invested in equity and the balance in different forms of debt. PennantPark hold businesses in a well-balanced selection of industries.

A Solid Quarter

On May 6 PannantPark reported second-quarter results for fiscal 2009 that included investments in 35 companies with an average commitment of nearly $10.4 million. The average yield on debt investments for the quarter was nearly 22%.

This translated to earning per share of $0.25, which met the consensus estimate. However, following the press release analysts began to revise estimates upwards.

+200% Growth

Full-year estimates for 2009 are now averaging $1.07, up 6 cents since the report. The consensus for 2010 is $1.11, up 12 cents in the same time period. These forecasts are calling for 206% growth this year and another 4% next year.

Quarterly estimate for the remaining 2 fiscal quarters are also on the rise.

Good Valuations

While the stock does carry a PEG ratio of 1.4, shares are trading at less than 7 times forward earnings.

In addition, PennantPark has a dividend yield of nearly 13%.

The Chart

PNNT shares have plenty of momentum also. You can see below that the stock has more than doubled in just over 2 months.