Executives from Brookfield Corp /ON/ and its subsidiaries, including Oaktree Capital Group Holdings GP, LLC, have sold a significant amount of shares in Runway Growth Finance Corp. (NASDAQ:RWAY). The recent transactions involved the sale of 400,000 shares at a price of $11.9 per share, totaling approximately $4.76 million.
The sales were conducted by a group of reporting owners consisting of OCM Growth Holdings LLC, Brookfield Oaktree Holdings, LLC, Oaktree Capital Group Holdings GP, LLC, Brookfield Corporation, and BAM Partners Trust. These entities are associated with Brookfield and Oaktree, with direct and indirect stakes in Runway Growth Finance Corp.
The shares were sold on June 10, 2024, and the filings were signed on June 12, 2024, by various senior executives and secretaries of the involved entities. Notably, the executives from these firms have positions that allow them to designate representatives to Runway Growth Finance Corp.'s board of directors, which may classify them as directors by deputization according to the footnotes in the SEC filing.
The sale of these shares has adjusted the ownership stakes of the reporting entities in Runway Growth Finance Corp., with the post-transaction amount of shares owned following the transaction listed as 10,779,668.
Investors often monitor such insider transactions for insights into the perspectives of senior executives and large shareholders on the company's current valuation and future prospects. The sale of a large block of shares by insiders can sometimes be interpreted in various ways, depending on the context of the transaction and the company's performance.
Runway Growth Finance Corp., based in Chicago, Illinois, provides growth loans to both private and public companies in various industries. Its common stock is traded on the NASDAQ under the ticker symbol RWAY. The company has undergone name changes in the past, previously known as Runway Growth Credit Fund Inc. and GSV Growth Credit Fund Inc.
The reporting owners have disclaimed beneficial ownership of the equity securities sold except to the extent of their respective pecuniary interest, and the filing of the SEC Form 4 is not to be construed as an admission that any reporting person is the beneficial owner of these securities.
In other recent news, Runway Growth Finance Corp. has demonstrated steady growth in its Q1 2024 financial results, with a notable increase in net investment income and a robust pipeline of new investments. The company completed $25 million in funded loans and reported a total investment income of $40 million. In addition to this, Runway Growth Finance announced a joint venture with Cadma Capital Partners, further expanding its investment opportunities.
Meanwhile, B.Riley has lowered its price target on Runway Growth Finance shares from $13.50 to $12.50, maintaining a Neutral rating. The adjustment came in the wake of the company's Q1 earnings report and a subsequent offering of secondary shares by OCM Growth Holdings. Despite acknowledging Runway's solid fundamentals, B.Riley remains cautious due to the uncertain macroeconomic environment and the potential for limited price appreciation until OCM's holdings are further reduced.
Lastly, Runway Growth Finance disclosed a secondary public offering of 3,750,000 shares of common stock by OCM Growth Holdings. The offering is being managed by several leading firms including Wells Fargo (NYSE:WFC) Securities, Morgan Stanley (NYSE:MS), and BofA Securities. These recent developments reflect Runway Growth Finance's active engagement in the market and its strategic approach to navigating the current financial landscape.
InvestingPro Insights
Amid the significant share sale by Brookfield Corp /ON/ and its subsidiaries in Runway Growth Finance Corp. (NASDAQ:RWAY), investors are keen to understand the company's current financial health and future outlook. According to recent data, Runway Growth Finance Corp. has a market capitalization of $468.13 million, with a P/E ratio that stands at a modest 10.92. Interestingly, the company's P/E ratio adjusted for the last twelve months as of Q1 2024 is lower at 6.34, suggesting a potential undervaluation compared to its earnings.
An InvestingPro Tip points out that RWAY has been consistent in rewarding its shareholders, having raised its dividend for three consecutive years. This is further evidenced by a robust dividend yield of 15.61% as of the last recorded date, which is significantly higher than the average for the sector. Additionally, the company's dividend growth over the last twelve months was 28.47%, highlighting its commitment to returning value to shareholders.
On the flip side, the company is trading near its 52-week low, which could signal a buying opportunity for value investors, especially considering the company's solid dividend offerings. However, analysts have revised their earnings downwards for the upcoming period, and the firm is trading at a high P/E ratio relative to near-term earnings growth. These factors could indicate potential headwinds for the stock.
For investors seeking more in-depth analysis, there are 7 additional InvestingPro Tips available for Runway Growth Finance Corp., which can be accessed at: https://www.investing.com/pro/RWAY. Those interested can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a more comprehensive insight into RWAY's financial metrics and projections.
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