Blackrock TCP Capital’s Q4 2023 Update By Scott Kennedy
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Article section by Scott Kennedy.
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Disclosures
Related to the stocks in this article:
CWMF is long: RITM-D, GPMT-A, DX-C, EFC-A, RITM-C, EFC-B, PMT-C, AGNCP, CIM-D, RITM-B, RITM, SLRC, GPMT, RC.
Scott Kennedy is long: RITM, RC, SLRC, GBDC, MITT, GPMT, ARCC, RITM-D, MITT-B, MITT-C, GAINL, MFAN, ECCC.
The rest of this post is from Scott Kennedy.
Summary
This 23rd earnings assessment article reviews TCPC’s NAV and NII performance during Q4 2023.
This article also discusses how TCPC’s quarterly change in NAV and NII “matched up” to expectations. Earnings remain a key driver to stock performance.
TCPC’s NII was a modest underperformance while its NAV was a notable underperformance. TCPC added a large loan to the company's non-accrual list.
In addition, a handful of portfolio companies experienced proportionately large valuation declines (more than I anticipated). As such, TCPC received a 2.5% recommendation range “downgrade”.
No change in TCPC’s risk/performance rating though (remains at a 3.5 but technically closer to a 4). TCPC is currently deemed appropriately valued (HOLD).
Introduction:
Hi subscribers. For new members, my name is Scott Kennedy and currently I fully cover 20 mortgage real estate investment trust (mREIT) and 15 business development company (“BDC”) common stocks within this Investing Group regarding research/data, subscriber questions, weekly projected book values/net asset values (BV/NAV), and common stock recommendation ranges. Colorado (“CO”) Wealth Management handles the mREIT preferred stocks and he and his team handles all other applicable REIT sectors outside the mREIT sector. CO also provides some mREIT common stock and BDC articles from time-to-time which are more of an “overview/introduction” discussion; typically based either on my or our combined research/data. This also includes some macroeconomic trends and data. My name is always attached to all Investing Group articles I personally wrote so there is no confusion for subscribers.
This REIT Forum article is part of a series of articles over a span of 6-7 weeks which will analyze my previously projected BV/NAV and core earnings (or core earnings equivalent)/net investment income (“NII”) figures and compare these metrics to each mREIT’s and BDC’s actual reported results, respectively. For readers who are familiar with my public mREIT and/or BDC articles, these types of articles are beneficial to readers who desire to pursue a more active investing strategy and/or want more “real time” thoughts/analysis.
I hope my services/contributions ultimately help enhance a subscriber’s total investment returns or minimize their total investment losses within the mREIT and BDC sectors. At the very least, I hope subscribers will gain more insight into the mREIT and BDC sectors by reading my/our exclusive REIT Forum articles.
1) TCPC’s NAV and NII Q4 2023 Performance (Projected Versus Actual Results):
On 2/29/2024, Blackrock TCP Capital Corp. TCPC 0.00%↑ reported the company’s earnings results for the fourth quarter of 2023. Table 1 below provides TCPC’s NAV and earnings summary.
Table 1 – TCPC Q4 2023 NAV and Earnings Summary
Source: Taken Directly from the REIT Forum’s © Analytical Spreadsheets/Data
I provided the following commentary in regards to TCPC’s results for the fourth quarter of 2023: