(SAR) Saratoga Investment Corp

Earnings Date: 01-13-2016

Saratoga is a finance company that invests primarily in leveraged loans and mezzanine debt for US companies with EBITDA in the $2-50 million range.

Report Created 01-01-2016

Earnings Dragon Recommendation:

Very Risky

Reasoning: Although the valuation seems excellent, small cap stocks have a tendency to be... shady.

We noticed several things we did not like about Saratoga.

1) Earnings per share over the last 5 years have fallen dramatically.

2) They are printing shares. Shares outstanding have risen from 3.2 Mil to 5.4 Mil

3) Why in God's name is an 86 million dollar company paying a dividend? (and printing shares...)

4) Zacks Investment Research rates them a "Strong buy". (Those dudes are fucking retards)

5) Based on Saratoga's valuation, the market smells a rat.

If Saratoga wasn't printing shares I would take the time to review the company's business with a better eye.

Since they are printing shares, I have to wonder what other idiotic/dis-honest things are they doing?

"Mezzanine debt" - either a brilliant method of convertible bond or a sheisty trick to pump out convoluted loans.

This stock is either an absolute home-run or a rat-infested sewer.