FBR Capital Upgrades Imperial Holdings (IFT) to Outperform
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Price: $5.57 --0%
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 10 | New: 3
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 10 | New: 3
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FBR Capital upgraded Imperial Holdings (NYSE: IFT) from Market Perform to Outperform with a price target of $8.50 (from $4.00) following the release of 4Q13 operating results and recent completion of a $70.7M 8.5% convertible note offering due in 2019 ($67.9M in net proceeds).
Analyst Scott Valentin notes, "reflecting an improved liquidity outlook and positioning of the company to make additional life settlement investments, positively affecting earnings and book value. Over the last several quarters, management has undertaken several actions that have reduced our concerns regarding long-term liquidity: : (1) it obtained a $300M 15-year line of credit to cover premiums and associated expenses on 459 policies (~$45M of annual premiums); (2) it issued $70.7M 8.5% convertible debt due in 2019 ($67.9M in net proceeds), providing liquidity to make additional life settlement investments and fund operating expenses; and (3) it sold its structured settlement platform generating $12M of cash and reducing cash operating expenses."
He added, "While life settlement industry conditions remain challenging, we believe management's actions over the last several quarters, culminating in the convertible note issuance, place the company on a more sustainable financial footing. We establish FY14 and FY15 EPS estimates of $1.41 and $0.63, respectively, with the large difference due to an expected fair value gain occurring in 2H14 upon closing of the planned investment in a pool of life settlements."
For an analyst ratings summary and ratings history on Imperial Holdings click here. For more ratings news on Imperial Holdings click here.
Shares of Imperial Holdings closed at $5.49 yesterday.
Analyst Scott Valentin notes, "reflecting an improved liquidity outlook and positioning of the company to make additional life settlement investments, positively affecting earnings and book value. Over the last several quarters, management has undertaken several actions that have reduced our concerns regarding long-term liquidity: : (1) it obtained a $300M 15-year line of credit to cover premiums and associated expenses on 459 policies (~$45M of annual premiums); (2) it issued $70.7M 8.5% convertible debt due in 2019 ($67.9M in net proceeds), providing liquidity to make additional life settlement investments and fund operating expenses; and (3) it sold its structured settlement platform generating $12M of cash and reducing cash operating expenses."
He added, "While life settlement industry conditions remain challenging, we believe management's actions over the last several quarters, culminating in the convertible note issuance, place the company on a more sustainable financial footing. We establish FY14 and FY15 EPS estimates of $1.41 and $0.63, respectively, with the large difference due to an expected fair value gain occurring in 2H14 upon closing of the planned investment in a pool of life settlements."
For an analyst ratings summary and ratings history on Imperial Holdings click here. For more ratings news on Imperial Holdings click here.
Shares of Imperial Holdings closed at $5.49 yesterday.
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