Saratoga Investment Corp 8.125% Notes due 2027 (SAY)

Key Financials

AI Analysis

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

I approach this not as a stock but as a lender to Saratoga Investment Corp. The security pays a stated 8.125% coupon and matures in 2027, so most of my return is contractual interest plus repayment; at $25.21 against a 52-week range of $25.00-$25.76, there is little room for capital gain. The issuer's filed results show real earning power in FY2026: net income of $36.6 million and diluted EPS of $2.31, up from $28.1 million/$2.02 in FY2025 and $8.9 million/$0.71 in FY2024. That record fits the computed Lynch STALWART label, with profit growth of 19.9% a year over five years. But a lender must weigh recent credit momentum, and the recent trend is troubling: fiscal Q1 2027 showed a net loss of $6.9 million and EPS of -$0.42, and fiscal Q2 2027 showed a net loss of $6.7 million and EPS of -$0.41, despite positive quarters in fiscal Q3 2026 ($12.0 million/$0.74) and fiscal Q2 2026 ($13.3 million/$0.84). I have no revenue, asset-coverage, or leverage figures in these filed snippets, so I cannot verify margin of safety. A financial company has no wide moat I can identify; its strength depends on credit discipline and balance-sheet quality. The note's current yield is roughly 8.1% on the $25.21 price, which may be fair compensation for credit risk—not a bargain. Graham would ask: is the coupon covered through a full cycle? Until the losses reverse, I would demand a clear cushion, not just a high stated coupon.

In plain English: Saratoga Investment Corp is a financial-services company, and this note is a loan to it that pays 8.125% interest and comes due in 2027. The business earned $36.6 million in fiscal 2026 but lost $6.9 million in fiscal Q1 2027 and $6.7 million in fiscal Q2 2027, so results have weakened recently. At $25.21, the note sits within its one-year price range of $25.00 to $25.76, so the price looks close to fair rather than cheap.

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Data as of 2026-10-16 close · note generated 2026-10-20 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2027 10-Q (period ended 2026-08-31) · fiscal Q1 2027 10-Q (period ended 2026-05-31) · fiscal Q3 2026 10-Q (period ended 2025-11-30) · fiscal Q2 2026 10-Q (period ended 2025-08-31) · FY2026 10-K (period ended 2026-02-28) · FY2025 10-K (period ended 2025-02-28) · FY2024 10-K (period ended 2024-02-29)

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