Gladstone Investment Corp. (GAIN): fair value, margin of safety and Wheel Score

Is GAIN undervalued?

Gladstone Investment Corp. (GAIN) closed at 15.32 on 16 Oct 2026. The GLS average fair value - the simple average of the 7 valuation models that produced a positive number - is 66.03, which puts the price 77% below it. 5 of the 7 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

There is a wide gap between DDM (14.13) and GLS Growth (253.86). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.

The nightly engine files GAIN under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for GAIN

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Gladstone Investment Corp. scores only 3 of 9 on the Piotroski F-score, which fails the Sunday Scan's "6 or more" rule. A reading this low means several of the basic tests - positive earnings, positive operating cash flow, falling debt, no new share issuance - are not met. A GLS Moat score of 3.1/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.

Returns on capital are high - ROIC 15.0%, ROE 27.6%, ROA 14.0% - with debt at 0.84 times equity and negative free cash flow.

The dividend yield is high at 6.27% (payout ratio 40%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.

Institutional ownership scores 2/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 45: Weak

With a Wheel Score of 45 Gladstone Investment Corp. sits in the Weak band, capped at 45 because the engine files it as Speculative / Distressed. The parts - Value 25/25, Health 7/20, Moat 5/15, Premium 20/20, Stability 8/20 - show where: Moat (5/15) scores lowest.

Implied volatility is 36% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 10,236 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 142k shares a day on a market cap of $610M, with a beta of 0.74 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 8 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 3 Nov 2026 (before the open), 18 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium. The shares go ex-dividend on 23 Oct 2026 (0.0800 per share), so a covered call sold before then carries a small early-assignment risk around that date.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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