Hot stock to watch: Apollo Investment Corp. (NASDAQ: AINV)

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Apollo Investment Corp. (NASDAQ: AINV) stock rose 0.25% after the company posted mixed results for the fourth quarter of 2019. Net asset value per share as of the end of the fourth quarter is of $19.06 compared to $19.03 as of December 31, 2018, which is a 0.2% increase. The company continued to successfully execute portfolio repositioning strategy increasing core assets (1) to 81% of the portfolio (2) as of the end of the quarter. During the fourth quarter 2019, the net investment income benefited from growth in the investment portfolio and the impact from the total return provision in the fee structure. Net asset value per share was up slightly given the relatively stable performance of the portfolio and the accretive impact from stock repurchases.

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During the fiscal year 2019, AINV has made significant progress in implementing the investment strategy. Due to the recent reduction in the asset coverage requirement, the company has accelerated the origination of lower risk loans. The company had planned to use the incremental investment capacity to invest in the first lien floating rate loans sourced by Apollo’s Direct Origination platform.

During the fourth quarter 2019, gross commitments totaled $228 million, gross fundings totaled $164 million and net fundings totaled $98 million and net leverage as of the end of the fourth quarter was 0.83x, compared to 0.74x as of December 31, 2018.

AINV in the fourth quarter of FY 19 has reported the adjusted earnings per share of 47 cents, beating the analysts’ estimates for the adjusted earnings per share of 45 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 35.9 percent to $61.4 million in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $63.8 million.

AINV has declared a distribution of $0.45 per share, payable on July 5, 2019 to shareholders of record as of June 20, 2019. The company had repurchased 310,818 shares of common stock at a weighted average price per share of $15.38, inclusive of commissions, for an aggregate cost of $4.8 million during the fourth quarter of 2019.

Meanwhile, the company’s Commitments to the Company’s Senior Secured Facility has increased by $50 million due to the addition of one new lender during the fourth quarter, which increased the size of the Facility from $1.59 billion to $1.64 billion. Effective from April 4, 2019, the company’s asset coverage ratio requirement was reduced from 200% to 150%

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