Gladstone Investment Corporation 7.875% Notes due 2030 (GAINI)

FairStock Score: 44/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

On its face, GAINI is not an equity claim but a 7.875% note due 2030 issued by Gladstone Investment, a business development company that lends to and invests in lower middle market businesses. The underlying enterprise is a lender and investor without a wide moat; capital is abundant, and credit cycles matter. The filed figures show why I would demand a margin of safety. Net income was $7.8M in fiscal Q1 2026, $28.7M in fiscal Q2 2026, $65.9M in fiscal Q3 2026, and then -$11.9M in fiscal Q1 2027. For full years, net income was $85.3M in FY2024, $65.3M in FY2025, and $184.8M in FY2026. That is cyclical and lumpy, not the steady stream I prefer. FairStock calculates ROE at 8.16%, ROCE at 4.39%, and D/E at 0.74, which suggests modest returns on a leveraged balance sheet. The equity P/B is 2.04, rich for a BDC, and FairStock Score is 44/100. The Lynch category is STALWART, with profit growing 34.2% a year over five years, but this is backward-looking and the latest quarter contradicts it. At $25.46 on 2026-10-13, the note sits near the top of its 52-week range of $25.06-$25.87. For a creditor, the coupon is attractive, but price appreciation is limited and the data do not provide coverage or asset-quality detail. I would watch whether the loss reverses and whether leverage stays controlled. The note may be fine if credit remains sound; the price offers little cushion.

In plain English: Gladstone Investment is a company that lends to and invests in smaller businesses, and this is one of its notes paying 7.875% due in 2030. The business has had uneven earnings and recently reported a loss, while its profits over the past few years have swung around. At $25.46, the note is near the top of its yearly price range, so it does not look cheap, and its safety depends on the company's ability to keep paying its debts.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2027 10-Q (period ended 2026-06-30) · fiscal Q3 2026 10-Q (period ended 2025-12-31) · fiscal Q2 2026 10-Q (period ended 2025-09-30) · fiscal Q1 2026 10-Q (period ended 2025-06-30) · FY2026 10-K (period ended 2026-03-31) · FY2025 10-K (period ended 2025-03-31) · FY2024 10-K (period ended 2024-03-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer