Pennant Park Investment (PNNT:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Pennant Park Investment(PNNT:NAS)

Financial Services:Asset Management

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$7.33 (USD) 28/11/2018

Weighted Valuation
$7.99 (USD)

Overall Rating
Undervalued by 9.0%

Valuation Models Analyst Consensus: $8.50 (USD)
(in order of importance) Adjusted Book Value: $7.45 (USD)
Comparables: $7.54 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Fairly valued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation

Company Overview (PNNT:NAS USD)

Price 7.33
Range 7.30 – 7.37
52 week 6.41 – 7.84
Open 7.33
Vol / Avg. 258200/258461
Mkt cap 506.17M
P/E 10.86
Div/yield 0.72/0.10
EPS 0.68
Shares 69.05M
Beta 1.16

Company Description

Pennant Park Investment Corp is an US-based investment management company. It investment objective is to generate current income and capital appreciation also seeking to preserve capital through debt and equity investments. The company focuses on investing middle-market companies which offer attractive risk-reward to investors and to create diversified portfolio that includes senior secured debt, mezzanine debt and equity investments. It generates most of its revenue from interest and dividend received from investments made.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for PNNT:NAS

Using a discounted cash flow model we generated an intrinsic value of ($19.96) (USD) for PNNT:NAS

Comparables Model

Using similar companies and price based ratios we generated a valuation of $7.54 (USD) for PNNT:NAS. We also generated a valuation of $6.86 (USD) using other metrics and comparables.
The comparable companies were Blackrock Ltd Duration (BLW:NYS), Eaton Vance (EOI:NYS), GAMCO Global Gold Natural (GGN:ASE), BlackRock MuniHoldings (MUC:NYS) and Och-Ziff Capital Mgmt Gr (OZM:NYS).

Company PNNT:NAS End Date Value
Earnings/Share $0.68 (USD)
Book Value/Share $9.21 (USD)
Sales/Share $1.63 (USD)
Cash Flow/Share $2.12 (USD)
EBITDA/Share $1.00 (USD)
Price Based on Comps Adjustment Factor (%)
$23.35 (USD) -31.2
$7.85 (USD) -73.5
$17.82 (USD) -70.9
$11.68 (USD) -63.8
$1.63 (USD) 0.0
PNNT:NAS Ratios Used Average Values BLW:NYS EOI:NYS GGN:ASE MUC:NYS OZM:NYS
11.83 PE Ratio 34.59 14.90 7.10 19.72 72.24 59.00
0.77 PB Ratio 0.85 0.85 0.93 0.81 0.82 0.00
4.36 PS Ratio 10.95 8.45 6.59 15.73 23.69 0.27
3.34 PCF Ratio 21.40 8.86 0.00 0.00 33.93 0.00
13.11 EV to EBITDA 1.63 0.00 0.00 0.00 0.00 1.63

Multiples

Using a multiples approach we generated a valuation of  $8.74 (USD) for PNNT:NAS

Company PNNT:NAS End Date Value
Earnings/Share $0.68 (USD)
Book Value/Share $9.21 (USD)
Sales/Share $1.63 (USD)
Cash Flow/Share $2.12 (USD)
EBITDA/Share $1.00 (USD)
Price Based on Comps Adjustment Factor
$5.86 (USD) 0
$7.52 (USD) 0
$6.54 (USD) 0
$10.17 (USD) 0
$13.60 (USD) 0
Ratios Ratio Average
PE Ratio 8.68
PB Ratio 0.82
PS Ratio 4.01
PCF Ratio 4.79
EV to EBITDA 13.63

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PNNT:NAS for the last 10 years was  0.82

We ran the Adjusted Book Value for  PNNT:NAS and generated a book value of  $9.11 (USD)
By multiplying these we get an adjusted valuation of  $7.45 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for PNNT:NAS. The 1 analysts have a concensus valuation for PNNT:NAS for 2019 of $8.50 (USD).

PNNT:NAS Pennant Park Investment

No analyst recommendation
Current Price: not available

No analyst consensus

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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