coin_in_fountain
17 years ago
Equus Total Return, Inc. Announces Follow-On Equity Investment in Nickent
Golf
HOUSTON, Feb 29, 2008 /PRNewswire-FirstCall via COMTEX/ -- Equus Total Return,
Inc. (NYSE: EQS) (the "Fund") announces a $1 million follow-on equity investment
in Nickent Golf, Inc. ("Nickent"). Nickent will use the proceeds for working
capital, strategic marketing and global expansion.
Nickent is a market leader in the rapidly expanding, hybrid club segment of the
golf industry and is an emerging leader in game-enhancement technology.
Nickent's development process is driven by its dedication to advanced
technologies and focus on design innovation. Additional information on Nickent
Golf, Inc. may be obtained at the Nickent website at http://www.nickentgolf.com.
"This follow-on investment in Nickent demonstrates our confidence in the
company's future," commented Anthony Moore, Chairman of Nickent. "We are
particularly encouraged by the broad and positive media exposure from which
Nickent has recently benefited and the resultant interest in the company's
products including the new 4DX Evolver driver which utilizes Interchangeable
Shaft Technology."
"Nickent recently finished as the most used driver on the Nationwide Tour, an
astonishing accomplishment given our size," commented Michael Lee, founder and
CEO of Nickent. "This follow-on investment by Equus demonstrates its commitment
to Nickent and will allow us to charge ahead and continue our growth across the
globe."
Equus Total Return, Inc. is a business development company that trades as a
closed-end fund on the New York Stock Exchange, under the symbol "EQS".
Additional information on Equus Total Return, Inc. may be obtained from the
Equus website at http://www.equuscap.com.
This press release may contain certain forward-looking statements regarding
future circumstances. These forward-looking statements are based upon the Fund's
current expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in particular, the
risks and uncertainties described in the Fund's filings with the Securities and
Exchange Commission. Actual results, events, and performance may differ. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof. The Fund's undertakes no obligation to
release publicly any revisions to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. The inclusion of any statement in this
release does not constitute an admission by the Company or any other person that
the events or circumstances described in such statements are material.
CONTACT: BRETT CHILES
(713) 529-0900
SOURCE Equus Total Return, Inc.
coin_in_fountain
17 years ago
Below is list of their current portfolio, which I took from their website. If we're going to enter a recession, then a few of these businesses really concern me. For example, Florida real estate, golf clubs, entertainment & leisure. I don't know how exactly they value these private businesses on their balance sheet, but I can only imagine their value is going to go down if we enter a recession. That would reduce the fund's NAV, and current discount to NAV.
On the other hand, the discount to NAV is already in the area of 41%, the dividend is about 8%, and they have cash of $4.10/share. That cash represents 39% of the total portfolio, or 66% of the current share price. If you first subtract the cash portion of the NAV, the existing portfolio of companies has already been discounted by an amazing 67% ! It seems completely unreasonable to suggest that the value of these companies has declined that much since the last NAV was reported.
This leads me to believe that investors have thrown the baby out with the bathwater, or else they simply have no confidence in management to move forward. After all, since 10/31/07 the NAV is actually down YTD, by 1.63%, and that led to devastating share price decline of 17.58% (as of 10/31/07)
I can't predict the future, but my best guess is that we'll see some more declines in NAV due to those non-recession friendly companies in their portfolio. That isn't going to help investor confidence. Combine that with year end tax loss selling, and it looks like there could be some more downside to this stock.
But, you can't ignore the fact that the non-cash portion of this stock has already been discounted by 66%, making it look like a real bargain. It's an interesting fund, that's for sure. If you're a short term buyer, I might want to stay away from this thing until after tax loss selling season ends at the end of December. On the other hand, if you're a long term investor, now might be a good time to get in. Keep in mind that anything can happen here. For example, if they sold one of these companies for a great profit, as they have done before, shareholders could get another HUGE dividend, with no warning. On the other hand, a sudden hit to the NAV by an underperforming company could send the NAV south, and that would really hurt the share price.
......................................................
The Bradshaw Group
Midrange and high-speed printing equipment
ConGlobal Industries, Inc.
Shipping container repair and storage
Creekstone Florida Holdings, LLC
Real estate in Panama City, Florida
Equus Media Development Company, LLC
Media
Equus Media Finance Company, LLC
Media
HealthSPAC, LLC
Special Purpose Acquisition Companies focused on healthcare
INFINIA Corporation
Alternative Energy
Nickent Golf, Inc.
Golf club manufacturer
PalletOne, Inc.
Wooden pallet manufacturer
Riptide Entertainment, LLC
Entertainment and leisure
RP&C International Investments LLC
Healthcare- Nursing homes in United Kingdom and Germany
Sovereign Business Forms, Inc.
Business forms manufacturer
Spectrum Management, LLC
Business & personal property protection
coin_in_fountain
17 years ago
My current analysis
From 6/30/07 to 9/30/07 the NAV decreased from $11.15/share down to $10.54. That's a significant decrease of about 5.5%, and probably helps explains the recent share price decline. (I wonder exactly how they came up with those numbers? Could it have had anything to do with the Florida real estate holdings listed on their web site?) Investors want to see net asset values increase, not decrease, that's for sure.
ON THE OTHER HAND:
The NAV has actually INCREASED 12.31% over the last year, so in the face of that, a 5.5% decrease over the last quarter doesn't look so bad. Time will tell if this is nothing more than a small bump in the road, or the beginning of a downward trend. I guess we'll just have to wait until the next quarter to see for ourself.
The stock price has fallen so far, it is now selling at an incredible 40% discount to the net asset value. You could argue that the net asset value is rather subjective, given the nature of the small company private holdings, but a 40% discount really catches my eye. On the other hand the significant discount to NAV has been in place for a LONG time, and it would take a considerable change in investor sentiment to turn that around. In other words, don't expect to see this thing trading for a premium to its NAV anytime in the foreseeable future. A recent decrease in the NAV certainly doesn't help matters.
The other obvious attraction to this stock is the dividend. If they can maintain a 12.5 cent quarterly dividend, at today's stock price that equates to an incredible yield of almost 8%. That would make it very attractive for fixed income investors. I don't think the dividend is in much danger, given that they have about $4.08/share in cash. (Not bad for a stock that last sold at $6.29, eh? Maybe they're waiting on the sidelines to invest in the next big opportunity - not a bad strategy in today's volatile market.)
I don't know if I would touch this baby right now, but it looks tempting. We're going to be getting into tax loss selling season, and this baby is a prime candidate for year end selling, especially since we went ex-dividend on November 15th. The whole stock market is also very nervous right now, and small cap stocks haven't really gone anywhere this year. If we do get into a recession, the odds of which seemed to have increased lately, small company stocks could be hit even harder.
One thing for sure, this is a very lightly traded fund. On Friday there was only 6300 shares traded, roughly $40K worth. That makes it hard to place a big bet without driving the price up. On the other hand with such light trading, more tax loss selling could really have a further significant negative impact.
My own opinion is the juicy dividend is the only thing keeping this thing alive. I don't know when the best time to get into this stock is, but it would seem to me that if the markets remain volatile, the last week of the year might be a good opportunity, after the majority of tax loss selling takes place. But, at some point that dividend is going to become so attractive that investors won't be able to stay away from it. Hard to say.
Good luck to all.
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