Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Sees Large Increase in Short Interest

Key Points

• Short interest surged by 96.4% in March to 971,577 shares (about 1.5% of shares outstanding), with a days-to-cover ratio of 1.6 as of March 13.
• The company raised its quarterly dividend sharply to $0.42 (from $0.03), implying a $1.68 annualized payout and a 13.7% yield with a payout ratio of 109.8%.
• Analysts have a consensus rating of Hold with an average price target of $14.00, after recent reductions to targets (Wells Fargo to $13 and KBW to $15).

Bain Capital Specialty Finance, Inc. (NYSE:BCSF - Get Free Report) was the recipient of a large growth in short interest during the month of March. As of March 13th, there was short interest totaling 971,577 shares, a growth of 96.4% from the February 26th total of 494,648 shares. Approximately 1.5% of the shares of the company are sold short. Based on an average daily trading volume, of 612,701 shares, the days-to-cover ratio is presently 1.6 days.

Wall Street Analysts Forecast Growth

A number of equities research analysts have weighed in on BCSF shares. Wells Fargo & Company reduced their price objective on Bain Capital Specialty Finance from $14.00 to $13.00 and set an "equal weight" rating for the company in a research note on Tuesday, March 3rd. Keefe, Bruyette & Woods reduced their target price on shares of Bain Capital Specialty Finance from $16.00 to $15.00 and set an "outperform" rating for the company in a report on Tuesday, March 3rd. One research analyst has rated the stock with a Buy rating and two have issued a Hold rating to the company. Based on data from MarketBeat, the company has a consensus rating of "Hold" and an average price target of $14.00.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the company. North Ground Capital boosted its holdings in Bain Capital Specialty Finance by 258.0% in the 4th quarter. North Ground Capital now owns 626,514 shares of the company's stock valued at $8,715,000 after purchasing an additional 451,514 shares in the last quarter. Closed End Fund Advisors Inc. purchased a new position in shares of Bain Capital Specialty Finance during the 4th quarter worth approximately $5,881,000. Millennium Management LLC lifted its holdings in shares of Bain Capital Specialty Finance by 263.5% in the 3rd quarter. Millennium Management LLC now owns 511,115 shares of the company's stock valued at $7,283,000 after buying an additional 370,507 shares during the period. Two Sigma Investments LP lifted its holdings in shares of Bain Capital Specialty Finance by 310.0% in the 3rd quarter. Two Sigma Investments LP now owns 489,550 shares of the company's stock valued at $6,976,000 after buying an additional 370,156 shares during the period. Finally, Cresset Asset Management LLC boosted its stake in shares of Bain Capital Specialty Finance by 20.9% in the third quarter. Cresset Asset Management LLC now owns 1,452,327 shares of the company's stock valued at $20,696,000 after buying an additional 250,844 shares in the last quarter.

Bain Capital Specialty Finance Stock Performance

Shares of NYSE:BCSF traded down $0.15 during trading on Thursday, reaching $12.27. The company had a trading volume of 317,201 shares, compared to its average volume of 651,490. Bain Capital Specialty Finance has a fifty-two week low of $11.82 and a fifty-two week high of $16.91. The company has a debt-to-equity ratio of 1.32, a current ratio of 1.82 and a quick ratio of 1.82. The stock's fifty day moving average price is $13.01 and its 200 day moving average price is $13.76. The firm has a market capitalization of $795.62 million, a price-to-earnings ratio of 8.02 and a beta of 0.60.

Bain Capital Specialty Finance (NYSE:BCSF - Get Free Report) last issued its quarterly earnings results on Thursday, February 26th. The company reported $0.46 earnings per share for the quarter, topping the consensus estimate of $0.45 by $0.01. The firm had revenue of $68.20 million during the quarter, compared to the consensus estimate of $68.48 million. Bain Capital Specialty Finance had a return on equity of 10.74% and a net margin of 36.14%. As a group, equities research analysts predict that Bain Capital Specialty Finance will post 2.06 EPS for the current year.

Bain Capital Specialty Finance Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Monday, March 30th. Stockholders of record on Monday, March 16th will be issued a $0.42 dividend. The ex-dividend date of this dividend is Monday, March 16th. This is a positive change from Bain Capital Specialty Finance's previous quarterly dividend of $0.03. This represents a $1.68 annualized dividend and a dividend yield of 13.7%. Bain Capital Specialty Finance's payout ratio is presently 109.80%.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance NYSE: BCSF is a closed-end interval fund organized as a specialty finance company. Since commencing operations in March 2017, the company has focused on originating and acquiring debt and equity investments in middle-market companies. It is structured to offer investors access to private credit and special situations strategies that are typically unavailable through traditional public debt markets.

The firm's core business activities include direct lending to U.S.

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