Research Disclosures

Analyst Certification
The Hilliard Lyons research analyst(s) named on the front page of a research report certifies that the views expressed in the report accurately reflect their personal views about the subject. They also certify that they have not been, are not, and will not be receiving direct or indirect compensation in exchange for expressing the specific points of view in this report.
Important Disclosures
Hilliard Lyons’ analysts or members of their households typically have positions in the companies they follow, which may include, but are not limited to, common stock, options, rights, warrants, or futures contracts. They may not engage in buying or selling securities contrary to their recommendation. 
Hilliard Lyons' analysts receive bonus compensation based on Hilliard Lyons' profitability. They do not receive direct payments from investment banking activity.
Investment Ratings
Buy: We believe the stock has significant total return potential in the coming 12 months.
Long-term Buy: We believe the stock is an above average holding in its sector, and expect solid returns to be realized over a longer time frame than our Buy rated issues, typically 2-3 years.
Neutral: We believe the stock is an average holding in its sector, is currently fully valued, and may be used as a source of funds if better opportunities arise.
Underperform: We believe the stock is vulnerable to a price set back in the next 12 months.
Suitability Ratings
  1. A large cap, core holding with a solid history
  2. A historically secure company which could be cyclical, has a shorter history than a “1” or is subject to event-driven setbacks.
  3. An above average risk/reward ratio could be due to small size, lack of product diversity, sporadic earnings or high leverage.
  4. Speculative, due to small size, inconsistent profitability, erratic revenue, volatility, low trading volume or a narrow customer or product base.
Price Charts
In accordance with FINRA Rule 2711, Hilliard Lyons has made available price charts which depict our stock recommendations and price targets over the most recent three year period for each subject company under coverage which has been assigned a rating for more than one year. 
To view a price chart of a particular stock, please click here.
The following are/were a client of Hilliard Lyons in the past 12 months, received non-investment banking securities-related services and Hilliard Lyons received compensation for those services:
  • BB&T Corp.
  • Community Trust Bancorp, Inc.
  • Fifth Third Bancorp
  • First Financial Bancorp
  • German American Bancorp, Inc.
  • HopFed Bancorp, Inc.
  • Huntington Banchshares Inc.
  • Old National Bancorp
  • PNC Financial Services Group
  • Renasant Corp.
  • Republic Bancorp, Inc.
  • Stock Yards Bancorp, Inc.
  • US Bancorp
  • Vectren
Hilliard Lyons acted as a manager or co-manager of an offering of securities of the following in the past 12 months:
  • AT&T Inc.
  • Gladstone Capital Corp.
  • Gladstone Commercial Corp.
  • Gladstone Investment Corp.
  • Investors Real Estate Trust
  • Physicians Realty Trust
  • SoTHERLY Hotels Inc.
  • Urstadt Biddle Properties
  • Whitestone REIT
Hilliard Lyons has participated as an underwriter of an offering of securities of the following in the past 12 months:
Hilliard Lyons has participated in a selling group for an offering of securities of the following in the past 12 months:
  • Gladstone Land Corp.
Hilliard Lyons received investment banking compensation from the following in the past 12 months:
  • AT&T Inc.
  • Gladstone Capital Corp.
  • Gladstone Commercial Corp.
  • Gladstone Investment Corp.
  • Gladstone Land Corp.
  • Investors Real Estate Trust
  • Physicians Realty Trust
  • SoTHERLY Hotels Inc.
  • Triangle Capital Corp.
  • Urstadt Biddle Properties
  • Whitestone REIT
Hilliard Lyons expects to receive investment banking compensation from the following in the coming 3 months:
  • Gladstone Commercial Corp. 
  • Physicians Realty Trust
Gladstone Capital Corp. (GLAD), Gladstone Commercial Corp. (GOOD), Gladstone Investment Corp. (GAIN), and Gladstone Land Corp. (LAND) share the same board and management.
As of March 7, 2018, Hilliard Lyons’ customers owned at least 5% of the outstanding common stock of:
  • German American Bancorp
  • National Health Investors
From 1998 to 2008, Hilliard Lyons was owned by PNC Financial Services Group (PNC).
For a discussion of valuation method and risks to target price, please see our stand-alone research reports, call us at 800-444-1854 ext. 8820, or send a request via e-mail to
  Hilliard Lyons Recommended Issues Investment Banking Provided in Past 12 Months
Rating # of Stocks Covered % of Stocks Covered Banking No Banking
Buy 37 33% 11% 89%
Hold/Neutral 69 62% 9% 91%
Sell 5 5% 0% 100%
Figures may not add due to rounding.       
As of March 8, 2018      
Hilliard Lyons Closed-End Fund Disclosures
Important Disclosures
Risk factors vary from fund to fund. Not every risk factor below will pertain to each fund. Based on these risk factors, not every fund may be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances.
A closed-end fund has both a net asset value (NAV) and a price, and these two values may differ. A closed-end fund's NAV is the total value of the securities in the portfolio minus any liabilities, divided by the fund's number of common shares outstanding. The fund's price is the market value at which the fund trades on an exchange. Changes in investor demand for a particular closed-end fund may cause the fund to trade at a price greater (lower) than the NAV; in that case the fund is trading at a premium (discount) to its NAV. Since a funds' premium or discount to its NAV may narrow or widen, a closed-end funds' price return may differ from its NAV return.
Investments that are concentrated in a specific sector or industry may be subject to a higher degree of market risk than investments that are more diversified. Investments concentrated in specific industries or sectors increases risk associated with any single economic, political, or regulatory development. This may result in greater price volatility.
The use of leverage may cause a Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. This may cause a Fund to be more volatile, which may increase the risk of investment loss.
Investing in fixed income securities involves certain risks such as market risk if sold prior to maturity and credit risk especially if investing in high yield bonds, which have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than original cost upon redemption or maturity. Income from municipal securities is generally free from federal taxes and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains, if any will be subject to taxes. 
High-yield bonds typically have a lower credit rating than other bonds and generally involve a greater risk to principal than higher rated bonds.
Bank loans are subject to interest rate and credit risk. In addition, these funds are exposed to other loan-specific risks. These funds typically invest in companies that are below investment grade. Investors should consider these and other risks before investing.
There are special risks associated with investing in preferred securities. Preferred securities generally offer no voting rights with respect to the issuer. Preferred securities are generally subordinated to bonds or other debt instruments in an issuer's capital structure, subjecting them to a greater risk on non-payment than more senior securities. In addition, the issue may be callable which may negatively impact the return of the security. Preferred dividends are not guaranteed and are subject to deferral or elimination.
Income for some investors may be subject to the federal Alternative Minimum Tax (AMT).
Certain funds may use derivative instruments for hedging purposes or as part of their investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk (the risk that illiquid securities may not be able to be sold at an advantageous time or price), interest rate risk (the risk that the value of fixed-income securities will decline if interest rates rise), market risk (the risk that the market price of securities may go up or down, sometimes rapidly or unpredictably), credit risk (the risk that the counterparty to a derivatives contract, repurchase agreement or a loan of portfolio securities, may be unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations), management risk (the risk that investment management decisions may not produce the desired results) and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.
Total returns assume reinvestment of all distributions, including dividends and capital gains. Reinvestment does not assure a profit or protect against a loss in declining markets. Total returns do not include commissions, fees, other transaction variables or the effects of taxation. Past performance does not guarantee or predict future results.
Certain funds may use options. Options investing involves a number of inherent risks and is not suitable for everyone.
Liquidity will vary among funds; certain funds may be thinly traded.
Distributions are not guaranteed and are subject to change or elimination.
All figures are subject to market fluctuation and change.
Investment Ratings
Preferred - We believe the closed-end fund is an attractive holding in its sector, and expect solid returns to be realized over a longer time frame, typically 2-3 years.
Neutral - We believe the closed-end fund is an average holding in its sector, is currently fairly valued, and may be used as a source of funds if better opportunities arise.
Sell - We believe the closed-end fund is vulnerable to a price decline and that better alternatives exist within the sector/category.
Individual fund ratings may also reflect risks, such as event, situational, and/or economic, specific to a fund and/or sector.
Funds may employ leverage to enhance returns. Derivatives may be used to hedge risk and/or generate current income.
Ratings are also based on other factors, including, but not limited to, a fund's holdings, leverage, duration, credit quality, and investment strategy.
Volatility Ratings
NAV Volatility (NV1) / Price Volatility (PV1) – Below Average Volatility
NAV Volatility (NV2) / Price Volatility (PV2) – Average Volatility
NAV Volatility (NV3) / Price Volatility (PV3) – Above Average Volatility
NAV Volatility (NV4) / Price Volatility (PV4) – High Volatility
NAV Volatility (NV5) / Price Volatility (PV5) – Speculative
Closed-end funds often invest in a broad range of asset categories and are assigned to over 100 Morningstar categories/classifications, which makes performing volatility/risk comparisons between funds difficult, particularly when relying solely on asset allocations or portfolio structures. This, combined with differences in NAV and Price volatility, portfolio leverage, as well as liquidity risk, led us to search for a simple metric by which to assess comparative volatility/risk. Our volatility rating reflects a scoring framework which compares individual CEF volatility (as measured by the standard deviation of monthly total returns, annualized) against a "hypothetical" benchmark portfolio (Benchmark) comprised of 3 primary asset classes: Equities (45%), Bonds (50%), and Cash (5%). More specifically, the following asset sub-categories are used to construct the benchmark: 1) Equities, 2) Corporate securities, 3) Asset-backed securities, 4) Treasuries, 5) Federal agencies, 6) Mortgage-related, 7) Municipal bonds, and 8) Money market. Benchmark asset weightings are determined using historical data on total U.S. equity and debt outstanding ($ billions), by sub-category, as provided by the Securities Industry and Financial Markets Association (SIFMA). We calculate our Benchmark volatility score by assigning our asset weighting %'s to those market indices we believe provide a broad representation of each asset category. For example, we use the S&P 500 Index (SPX) to represent the equity portion of our benchmark portfolio. From this information, we compute a weighted total return volatility measure for the benchmark over a 5 year period, which we then compare to the same metric for individual funds. Based on this comparison, we categorize each fund according to the volatility table framework provided in this report. 
By constructing a hypothetical, broad-based benchmark portfolio, it is our view we are providing a tool that offers investors useful information in making capital allocation decisions based on their level of risk tolerance and the risk profile of their existing portfolio. We note that, while proper asset allocations vary based on individual investor time horizon and risk tolerance, among other factors, it is our belief that this revised framework provides a simple metric by which investors may gauge a fund's overall volatility/risk potential relative to a broad basket of asset categories. We caution investors that data used to support our calculations is historical, and as such, should not be considered predictive. It provides an average of total return volatility based on monthly data for the time periods measured, which may or may not provide an accurate representation of future volatility. Furthermore, our volatility ratings incorporate NAV and Price total return volatility only, and as such, may not fully incorporate other risks, such as, but not limited to, credit, liquidity, leverage, market, or event risk. Finally, this rating framework may not establish/reflect suitability for all clients. 
The Z-score incorporates fund/sector "valuation volatility" (as measured by standard deviation) in CEF and sector comparisons. Simply put, a Z-score is the difference between a fund's current discount/premium and its average discount/premium over a chosen time period, divided by the standard deviation over the same period. The z-score is a simple metric that permits easier fund to fund comparisons by employing standard deviation, which in our view provides greater clarity when attempting to determine the level of under/over-valuation, statistically, for a given fund or sector. For example, if fund A is trading 15% below its net asset value, it may appear more undervalued, on an absolute basis, when compared to peer fund B trading at a 10% discount. However, if Fund A has a Z-score of -1 while fund B has a Z-score of -2, an investor could justifiably conclude that fund B is statistically more undervalued since it trades 2 standard deviations below its average valuation for a given measurement period. Based on our review of historical data for the past 5 years, a fund/sector z-score of +/- 2 typically reflects a valuation that is near the top or bottom of its valuation range for the period measured. For this reason, we consider fund scores of -2 or less to be statistically undervalued, while scores equal to or above 2 would be viewed as statistically overvalued for the time periods measured.
Though many Closed-end fund sectors/categories (as classified by Morningstar) may be included on our Preferred list, their inclusion/exclusion does not represent a "sector bet", it is simply our attempt to provide a broad selection of investment sectors/alternatives in order to assist our clients in meeting their investment objectives. The number of available funds within each sector classification varies widely, with some categories having only one fund, while others, such as the Municipal Long category, having over 60 individual CEFs. Consequently, certain sector classifications may have multiple funds on our Preferred List, while others may have one or none.
As of March 7, 2018, Hilliard Lyons' customers own at least 5% of Western Asset Global Corporate Defined Opportunity Fund shares.
Other Disclosures
Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of J.J.B. Hilliard, W.L. Lyons, LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed here. 
J.J.B. Hilliard, W.L. Lyons, LLC is a multi-disciplined financial services firm that regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as placement agent in private transactions. In addition, J.J.B. Hilliard, W.L. Lyons, LLC acts as a fund administrator for DNP Select Income Fund (DNP), DTF Tax-Free Income Fund (DTF), and Duff & Phelps Utility and Corporate Bond Fund (DUC), and may seek additional fund administration business. The Research Department does not currently provide research coverage on companies for which it provides fund administration services. 
The information herein has been obtained from sources we believe to be reliable but is not guaranteed and does not purport to be a complete statement of all material factors. This is for informational purposes and is not a solicitation of orders to purchase or sell securities. Reproduction is forbidden unless authorized. All rights reserved.
Hilliard Lyons sells mutual funds that may be part of the same fund families as the closed end funds described. In addition to the compensation received from the sale of mutual funds, distributors, investment advisers or other entities affiliated with mutual funds ("sponsors") may make payments to Hilliard Lyons to support our training, back office operations, educational presentations and sales support activities provided to our Financial Consultants. These payments are generally referred to as revenue sharing payments. The following mutual fund sponsors have made revenue sharing payments to Hilliard Lyons as of December 31, 2015: American Funds, Federated Funds, Franklin Templeton, Columbia Funds, John Hancock, and Hartford Funds. Other service providers not listed here may pay directly for educational seminars for Financial Consultants and/or clients.
Hilliard Lyons may earn compensation for providing the following services: acting as an investment adviser; providing fund accounting, transfer agency, and custody services; or providing omnibus record keeping and associated shareholder or administrative services to various mutual funds. Most of these fees are earned on a percentage-of-assets or number of positions basis and paid by the mutual funds or their affiliates. Please refer to the specific mutual fund's prospectus for more detailed disclosure concerning these payments.
For Closed-Ends Funds: Unless otherwise stated, return data will be reported as of the most recent month end. All other data will reflect the most current data available as provided by Morningstar Direct or company reports.