BETHESDA, Md., June 22 /PRNewswire/ -- American Capital Strategies (Nasdaq:ACAS) announced today that Friedman, Billings, Ramsey analyst, Merrill Ross, has raised her estimates of American Capital net operating income from $1.29 to $1.33 per share for 1998 and from $1.62 to $1.78 per share for 1999. The Ross estimates of net operating income excludes capital gains and unrealized appreciation while some companies in this finance category include those gains in their earnings.
The report maintains a ``buy'' rating on the shares and looks for ``a total return to investors, including dividends, of 42% from current levels over the next 12 months.'' Analyst Merrill Ross indicated that, ``American Capital demonstrates a competitive advantage over its peers. It has funded transactions that were competitively bid and also where it had an exclusive. The breadth and diversity of the portfolio are attractive.''
The report recognizes American Capital's competitive advantage in ``arranging complex financings using tax-advantaged ESOP structures that improve the borrower's ability to service debt ...'' The report raises Friedman's estimate of the pace of American Capital's investments over the next 18 to 24 months. Analyst Merrill Ross established a twelve-month price target of $32 per share or approximately 18 times 1999 net operating income.
Dividend estimates for shareholders have also increased to $1.33 per share in 1998 and $1.78 per share in 1999 from Friedman's original projection of $1.22 and $1.54.
David Gladstone, Chairman of American Capital said, ``Merrill Ross has followed American Capital from the date of the IPO. We are pleased with Ms. Ross' continued high confidence in the future performance of American Capital for its shareholders. We are especially pleased to continue to be on Ms. Ross' 'buy list' because she is such a distinguished analyst.''
President and CEO Malon Wilkus said, ``Our buyouts and financings during the last two quarters reflect our overall investment flexibility. Our financial and ESOP expertise and capital investments are empowering private companies to grow and become more competitive. We appreciate FBR's recognition of these capabilities, the quality of our financing activities and the positive returns these will generate for our shareholders.''
The Friedman, Billings, Ramsey report can be obtained by calling American Capital, Investor Relations Department at 301-951-6122. For additional shareholder information you can visit its website.
