- HTGC has recently announced plenty of good news and will likely be reporting strong results for Q3 and Q4 2018.
- In Q2 2018, NAV per share will likely increase by around 3% to 4% due to accretive share issuances, net realized/unrealized gains in companies including DocuSign, ForeScout, FanDuel and Tricida.
- However, I am not expecting HTGC to fully cover its dividend in Q2 2018 due to additional shares from the recent equity offering and higher prepayments in Q1 2018.
- Over the coming quarters, the company will easily cover its dividend due to the impacts from rising LIBOR, recently announced portfolio growth and lower amounts of prepayments in Q2 2018.
- HTGC currently pays a quarterly dividend of $0.31 per share that will likely be increased as its portfolio grows given its scalable internally managed cost structure and access to SBA leverage.
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Reasons to Buy HTGC:
- Superior positioning for rising interest rates
- Scalable internally managed cost structure
- Higher credit quality portfolio with potential NAV improvement/growth
- Portfolio diversification for VC-backed technology exposure
- Potential for strong dividend coverage supported by access to growth capital, including SBA leverage and issuing shares at a premium to NAV
I purchased shares of HTGC on March 26, 2018, at an average price of $12.03 as shown below: