Chicago Atlantic BDC, Inc.
- 1-year return
- ▼ −9.8%
- 52-week range
- $9.01 – $11.22
- Market cap
- $208.6M
- P/E (trailing)
- 6.6
- Dividend yield
- 14.88%
Scorecard
Value checklist: 6/7 passed (score 86%). Growth checklist: 2/5 passed (score 40%). A profile needs a score of at least 60%. The stock fits the value profile and not the growth profile. 6 of 18 checks couldn't be evaluated and were left out.
Price history
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Revenue and net income
By fiscal year
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Earnings per share
Diluted EPS by fiscal year · Yahoo Finance (annual statements)
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Profit margins
Gross, operating and net margin by fiscal year
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Company
- Sector
- Financial Services
- Industry
- Asset Management
- Country
- United States
- Market cap
- $208.6M
- Price
- $9.14 USD
- Annual dividend
- $1.36
- Employees
- N/A
Business description
Silver Spike Investment Corp., is a a business development company. It is a specialty finance company, focuses on investing across the cannabis ecosystem through investments in the form of direct loans to, and equity ownership of, privately held cannabis companies. It intends to partner with private equity firms, entrepreneurs, business owners, and management teams to provide credit and equity financing alternatives to support buyouts, recapitalizations, growth initiatives, refinancings, and acquisitions across cannabis companies, including cannabis-enabling technology companies, cannabis-related health and wellness companies, and hemp and CBD distribution companies. The company was founded in 2021 and is based in New York, New York.
Value checklist
| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Price / Earnings Growth (PEG) | Below 1 | 0.70 | Pass | P/E / 9.3% analyst next-year EPS growth |
| Price / Earnings (P/E) | Below 15 | 6.58 | Pass | |
| Price / Book (P/B) | Below 1 | 0.69 | Pass | |
| Return on Equity (ROE) | Above 15% | 10.48% | Fail | |
| Return on Assets (ROA) | Above 4% | 6.90% | Pass | |
| Debt / Equity (D/E) | Below 1 | 0.09 | Pass |
10-Year EPS Test
Pass| EPS 2.8 years ago | $1.18 |
| Current EPS | $1.39 |
| Lowest P/E in period | 6.37 |
| Current share price | $9.14 |
| Annual dividend per share | $1.36 |
| EPS growth rate | 6.02% |
| Projected EPS in 2.8 years | $1.64 |
| Projected trading price (lowest P/E x EPS) | $10.43 |
| Projected value (+ 2.8 yrs of dividends) | $14.24 |
| Annual compound return | 17.17% |
| Hurdle rate | 12.00% |
Inputs: FY 2023 EPS (Yahoo Finance (annual statements)); trailing 12-month EPS; lowest P/E in FY 2023
Only 2.8 years of EPS history available, so this is a shorter test than 10 years.
Growth checklist
| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Gross Profit Margin | Above 40% | 100.00% | N/A | Not meaningful for financial firms, which have no cost of goods sold. |
| Operating Profit Margin | 10% to 25% | 61.94% | Fail | Above the range: very profitable, which fits a mature business more than one reinvesting for growth. |
| Net Profit Margin | Above 10% | 52.82% | Pass | |
| Return on Equity (ROE) | Above 15% | 10.48% | Fail | |
| Current Ratio | Above 2 | 0.71 | N/A | Not meaningful for financial firms: their balance sheets aren't split into current and long-term items, and their receivables are the loans they make. |
| Quick Ratio | Above 1.5 | 0.51 | N/A | Same as above. |
| Accounts Receivable Turnover | Above 7.3 | 5.39 | N/A | Same as above. |
| Inventory Turnover | Above 7.3 | N/A | N/A | Same as above. |
| Healthy Working Capital (CA > CL) | Above $0 | N/A | N/A | Same as above. |
| Revenue Growth (annual CAGR) * | Above 10% | 100.90% | Pass | |
| Expected EPS Growth (next year) * | Above 10% | 9.33% | Fail |
* Extra growth signal on top of the core checklist.
Qualitative: value factors
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Small is BeautifulSupports
Small-cap company ($208.6M market cap). Smaller firms are often overlooked by large institutional investors, which leaves more room for value investors to find mispriced shares.
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Annuity BusinessSupports
Income looks regular and predictable, which value investors like because it holds up through economic cycles: the business description points to recurring income (loan); revenue rose every year for the last 2 years.
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Durable Competitive AdvantageAgainst
ROE of 10.5% and net margin of 52.8% don't show a clear edge over other financial firms.
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Revenues & CommoditySupports
Revenue from Asset Management isn't tied to commodity prices, so earnings are more predictable.
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Need for CapitalSupports
The business funds itself without heavy borrowing or spending: debt-to-equity is 0.09 (threshold: below 1).
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Insider BuyingSupports
In the past two years insiders made 19 purchases ($1.3M) and 0 sales ($0). Buyers include Colonna Bernardino (President), Fazio Gianni James Lezziere (Officer), Gordon Scott (Chief Investment Officer). Executives buying with their own money suggests they believe the stock is undervalued.
Qualitative: growth factors
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Market PotentialSupports
It has a large, expanding market to grow into: revenue has grown 100.9% per year.
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New Goods/Services & Customer OrientationNeutral
Not enough R&D and revenue history to judge the product pipeline.
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Research & DevelopmentAgainst
No R&D expense reported, so the company isn't investing in new technology through R&D.
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Profit MarginsSupports
Gross 100.0%, operating 61.9%, net 52.8%. High margins show customers are willing to pay for its products.
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Market ShareSupports
Revenue growth of 100.9% per year suggests it is taking market share, and at $208.6M it still has room to expand.
Caveats
- EPS test: Only 2.8 years of EPS history available, so this is a shorter test than 10 years.
- Long-run EPS history comes from Yahoo Finance (about 4 years). Set SEC_USER_AGENT to use 10+ years of SEC filings, or enter the EPS test inputs yourself.