SeeThruEquity Initiates Coverage on Firsthand Technology Value Fund, Inc. (NASDAQ: SVVC) with a Price Target of $20.57
NEW YORK, NY / CRWEPRESSRELEASE / September 9, 2015 /SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage of Firsthand Technology Value Fund, Inc. (NASDAQ: SVVC) with a Price Target of $20.57.
The report is available here: SVVC Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Since 2011, the management team of Silicon Valley-based Firsthand has demonstrated an ability to pick winning growth investments on a large scale, with investment successes that have included Yelp (YELP), Solar City (SCTY), Facebook (FB) and Twitter (TWTR). From its inception in April 2011 through 2Q15, Firsthand has grown Net Asset Value (NAV) by over 4% per year, after fees, with double-digit returns in 2013 and 2014. The fund is managed by CEO and Chief Investment Officer Kevin Landis, a well-respected growth investor with over 25 years of experience in the investment and technology industries.
“We view Firsthand as overlooked on Wall Street following the harvesting of gains from its investments in Twitter (TWTR) and Facebook (FB). Indeed, in 2014, the company made two large stockholder distributions totaling $5.86 per share. With a more balanced private equity portfolio, the market discount to Firsthand’s Net Asset Value (NAV) has widened to an eye-opening 61.4% as of the recent price of $9.43. We see this discount as representing an attractive opportunity to gain access to the investment selection and research process of an industry veteran with a well-established track record of growth investing dating back to the 1990s.,” stated Ajay Tandon, CEO of SeeThruEquity. “We are initiating coverage with a 12-month price target of $20.57 per share.”
Additional highlights from the report are as follows:
Shares appear remarkably undervalued
We see Firsthand shares as deeply undervalued, perhaps abandoned after the massive 2014 distributions of its realized gains in Facebook (FB) and Twitter (TWTR). At the recent price of $9.43, shares trade at less than half of the fund’s Net Asset Value (NAV) – a remarkable variance even for a closed end mutual fund. We see this valuation as a severe disconnect for a fund managed by a well-regarded growth technology investor in a bull market, with a history of positive returns including investments in “winners” such as Twitter (TWTR), Facebook (FB), and Yelp (YELP).
High conviction style buoyed by rigorous investment process
Firsthand’s investment portfolio is managed by Firsthand Capital Management Inc., which is led by its CEO and Chief Investment Officer Kevin Landis, a seasoned investor with over 25 years of experience in technology and investment management. Landis and his investment team have put in place a rigorous investment process formed from their extensive experience investing in high growth applications of technology – a process which generated robust returns in prior bull markets. As part of its investment process, Firsthand leverages its expertise, its Silicon Valley presence and its industry contact network to evaluate potential portfolio companies using an analysis of: Barriers to Entry, Core Technology, Competitive Positioning, Management Team Experience, Existing Financial Sponsors, and Exit Strategy. The process is supported by rigorous due diligence and executed with high conviction, concentrated positions – as of July 31, 2015, 45.2% of the Fund’s net assets were invested in its five largest positions, including two positions representing over 12% of assets. We are intrigued by this high conviction execution as there is more potential for uncorrelated performance directly linked to the skill of the investment manager in selecting and sizing positions.
Initiate coverage with a price target of $20.57
Our analysis indicates a fair value estimate of $20.57 per share (detailed on page 10), for SVVC. If achieved, the target represents potential upside of 118.1% from the recent price of $9.43. We view SVVC as an attractive company in the financial sector that offers a public conduit for investors to acquire exposure to late stage high growth private companies in the technology and cleantech sectors.
SVVC’s management has demonstrated an ability to pick winning growth investments on a large scale, with prior investment successes in Facebook (FB), Twitter (TWTR) resulting in large distributions (totaling $5.86 per share) during 2014. We view the company as overlooked on Wall Street following these distributions, as investors have failed to act on Firsthand’s widening discount to Net Asset Value (NAV), despite an intriguing portfolio that includes well-known pre-IPO names such as Cloudera, Roku, Nutanix, Jawbone, Gilt Groupe, and recent IPO Sunrun (RUN), as well as large positions in intriguing mid-stage companies such as Pivotal Systems, Inc., whose gas flow controllers (GFCs) are currently being shipped in volume at Samsung and are in the qualification process at several of the world’s largest semiconductor manufacturers as well as two of the top semiconductor equipment suppliers.
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About Firsthand Technology Value Fund, Inc.
Firsthand Technology Value Fund, Inc. is a publicly traded venture capital fund that invests in technology and cleantech companies. Firsthand Technology Value Fund is a non-diversified, closed-end investment company that elected to be treated as a business development company under the Investment Company Act of 1940. The Fund’s investment objective is to seek long-term growth of capital. Under normal circumstances, the Fund will invest at least 80% of its total assets for investment purposes in technology and cleantech companies. More information about the Fund and its holdings can be found online at www.firsthandtvf.com.
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
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