$HTGC

Explicit claim • strong conviction • basis: drawdown discount

The reality is that even with the S&P 500 up over 11% year-to-date and over 19% over the last year, there's still a lot of opportunities in this market, particularly in the high yield space. These are companies that get very little traditional analyst coverage, creating what I call valuation gaps. So, in this video, we're going to be looking at three stocks that are currently undervalued, all of them high yield stocks.

Implied claim • strong conviction • basis: drawdown discount

Looking back over 5 years, there was a point in 2025 when it traded at a nosebleed 1.86 times its book value. That's high, even for Hercules, which has averaged 1.47 times book over the past 5 years. It's currently trading at 1.35 times book.

Explicit claim • strong conviction • basis: quality at discount

So, Main Street Capital 66% premium. Hercules Capital 45% premium. Trinity Capital 34% premium. So, they're all large premiums to NAV. And what this enables them to do is it enables them to issue more equity at a premium to NAV. So, it's a creative.

Comparative claim • strong conviction • basis: multiple relative

Over the past 5 years, Hercules has typically traded at a much higher premium than what it's going for today. In early 2025, their stock was trading for over a 70% premium, but historically has traded in the 40 to 50% range.