Stock analysis: TICC Capital Corp. (NASDAQ:TICC)

TICC Capital Corp. is a business development company primarily engaged in providing capital to technology-related companies. TICC concentrates its investments in companies having annual revenues of less than $200 million and/or a market capitalization or enterprise value of less than $300 million, with a focus on businesses in the following sectors: computer software and hardware, networking systems, semiconductors, semiconductor capital equipment, diversified technology, medical device technology, information technology infrastructure or services, Internet, telecommunications and telecommunications equipment and media.

TICC’s  investment objective is to maximize its portfolio’s total return, principally by investing in the debt and/or equity securities of technology-related companies. The Company’s primary focus is on seeking current income by investing in non-public debt securities. TICC’s debt investments may include bilateral loans (loans where it holds the entirety of a particular loan) and syndicated loans (those where multiple investors hold portions of that loan). The Company may also seek to provide its stockholders with long-term capital growth through the appreciation in the value of warrants or other equity instruments that it may receive when it makes debt investments, or equity investments. It may also invest in publicly traded debt and/or equity securities.

TICC’s total investment income for the first quarter of 2011 amounted to approximately $9.8 million, up approximately 6.8% from the fourth quarter of 2010 due largely to greater distribution income from securitization vehicle investments. Compared to its peers, TICC has higher ROE, ROA, Net interest margin and asset Growth. This indicates that it is outperforming its peers.

Performance Ratios (%)                    TICC          PeerMedian      PeerAverage 
 ROAA                                                       14.26            (3.06)                 (9.26) 
 ROEE                                                        14.70            (4.61)                (11.57) 
 Net Interest Margin                           11.93               1.86                     4.24 
 EBITDA / Interest Expense (x)         NA             (8.79)                (78.53) 
 Asset Growth                                        15.91             (9.16)                (18.20) 
 Net Income Growth                         (35.72)              NA                     NA

TICC traded in a 52-week range that spanned from a low of $7.88 to a high of $9.78. The last trading day, the shares was up 1.25%. The price is currently above their 20-day moving average (MA) of $9.67 and below their 250-day MA of $9.97. The support level is located at $9.17 and the resistance is at $10.46.The technical indicators shows strong buy with the $12.21 target price in six months.  we expect the share price to rebound toward the $10.46 resistance level in the immediately future.

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