Ares Capital Corporation $ARCC Stock Position Lifted by Sound Income Strategies LLC

Key Points

• Sound Income Strategies raised its Ares Capital stake 5.6% to 2,616,789 shares (about $54.7M), making ARCC its second-largest holding, while other institutions including Goldman Sachs also increased positions.
• Insider buying: CEO Michael Schnabel bought 12,500 shares (~$19.13 each, a 44.6% increase in his stake) and CFO Scott Lem bought 5,186 shares (~$19.29 each, a 15.1% increase), signaling management confidence.
• Ares pays a quarterly $0.48 dividend (annualized $1.92) for a 10.5% yield

Sound Income Strategies LLC grew its stake in shares of Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 5.6% during the fourth quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The institutional investor owned 2,616,789 shares of the investment management company's stock after buying an additional 138,857 shares during the period. Ares Capital accounts for 2.6% of Sound Income Strategies LLC's portfolio, making the stock its 2nd biggest holding. Sound Income Strategies LLC owned 0.37% of Ares Capital worth $54,691,000 as of its most recent filing with the Securities & Exchange Commission.

A number of other large investors have also recently made changes to their positions in ARCC. AQR Capital Management LLC lifted its position in shares of Ares Capital by 6.5% during the 1st quarter. AQR Capital Management LLC now owns 16,502 shares of the investment management company's stock valued at $365,000 after buying an additional 1,000 shares in the last quarter. Dynamic Technology Lab Private Ltd purchased a new position in shares of Ares Capital during the 1st quarter valued at about $273,000. Goldman Sachs Group Inc. lifted its position in shares of Ares Capital by 14.5% during the 1st quarter. Goldman Sachs Group Inc. now owns 2,835,007 shares of the investment management company's stock valued at $62,824,000 after buying an additional 358,829 shares in the last quarter. Empowered Funds LLC lifted its position in shares of Ares Capital by 139.9% during the 1st quarter. Empowered Funds LLC now owns 27,655 shares of the investment management company's stock valued at $613,000 after buying an additional 16,128 shares in the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC purchased a new position in shares of Ares Capital during the 1st quarter valued at about $14,766,000. 27.38% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

ARCC has been the topic of a number of analyst reports. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Ares Capital in a research report on Monday, December 29th. Wall Street Zen cut Ares Capital from a "hold" rating to a "sell" rating in a research report on Saturday, February 7th. B. Riley Financial reaffirmed a "buy" rating on shares of Ares Capital in a research report on Monday, February 9th. Royal Bank Of Canada lowered their price objective on Ares Capital from $23.00 to $22.00 and set an "outperform" rating on the stock in a research report on Monday, February 9th. Finally, Wells Fargo & Company lowered their price target on Ares Capital from $21.00 to $20.00 and set an "overweight" rating on the stock in a report on Thursday, February 5th. Seven research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $21.38.

Insider Buying and Selling

In other Ares Capital news, CFO Scott C. Lem purchased 5,186 shares of the stock in a transaction that occurred on Friday, February 6th. The shares were bought at an average cost of $19.29 per share, with a total value of $100,037.94. Following the acquisition, the chief financial officer owned 39,463 shares in the company, valued at approximately $761,241.27. This trade represents a 15.13% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CEO Michael Kort Schnabel purchased 12,500 shares of the stock in a transaction that occurred on Thursday, February 5th. The stock was acquired at an average cost of $19.13 per share, for a total transaction of $239,125.00. Following the completion of the acquisition, the chief executive officer owned 40,500 shares in the company, valued at $774,765. This represents a 44.64% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. 0.49% of the stock is currently owned by insiders.

Ares Capital Stock Up 1.2%

NASDAQ ARCC opened at $18.30 on Tuesday. The stock's 50 day moving average is $18.83 and its 200 day moving average is $19.79. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 1.12. Ares Capital Corporation has a 12 month low of $17.40 and a 12 month high of $23.42. The stock has a market cap of $13.14 billion, a PE ratio of 9.84 and a beta of 0.58.

Ares Capital (NASDAQ:ARCC - Get Free Report) last posted its quarterly earnings results on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, hitting analysts' consensus estimates of $0.50. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.The company had revenue of $793.00 million for the quarter, compared to analysts' expectations of $795.20 million. During the same period in the previous year, the firm earned $0.55 EPS. The firm's revenue was up 4.5% compared to the same quarter last year. Research analysts predict that Ares Capital Corporation will post 2.19 EPS for the current fiscal year.

Ares Capital Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Friday, March 13th were issued a $0.48 dividend. The ex-dividend date of this dividend was Friday, March 13th. This represents a $1.92 dividend on an annualized basis and a yield of 10.5%. Ares Capital's payout ratio is currently 103.23%.

Ares Capital Company Profile

Ares Capital Corporation NASDAQ: ARCC is a publicly traded business development company (BDC) that specializes in providing debt and equity financing solutions to U.S. middle-market companies. As a BDC, Ares Capital offers investors access to a diversified portfolio of tailored credit investments, including senior secured loans, unitranche financing, mezzanine debt and equity co-investments. The firm's flexible capital structures are designed to support companies seeking growth capital, refinancing or strategic acquisitions.

Through its credit platform, Ares Capital focuses on originations, underwriting and portfolio management across a range of industries, with a particular emphasis on sectors such as healthcare, technology, industrials and business services.

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