CCLA Investment Management Trims Position in Ares Capital Corporation $ARCC

Key Points

• CCLA Investment Management cut its stake in Ares Capital by 37.5% in Q4, selling 1,021,278 shares and retaining 1,703,144 shares valued at about $34.45 million (0.24% of the company).
• Company insiders increased holdings in early February, with CEO Michael Kort Schnabel buying 12,500 shares at $19.13 and CFO Scott C. Lem buying 5,186 shares at $19.29, signalling insider buying activity.
• Ares Capital pays a quarterly dividend of $0.48 (annualized $1.92) for a yield of 10.6%, but the dividend payout ratio is high at roughly 103%, which may raise questions about sustainability.

CCLA Investment Management lessened its position in shares of Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 37.5% in the fourth quarter, according to the company in its most recent Form 13F filing with the SEC. The fund owned 1,703,144 shares of the investment management company's stock after selling 1,021,278 shares during the quarter. CCLA Investment Management owned 0.24% of Ares Capital worth $34,454,000 at the end of the most recent reporting period.

A number of other hedge funds also recently bought and sold shares of the company. Canal Capital Management LLC raised its position in Ares Capital by 1.6% during the fourth quarter. Canal Capital Management LLC now owns 32,955 shares of the investment management company's stock valued at $667,000 after purchasing an additional 520 shares during the period. BKM Wealth Management LLC raised its position in Ares Capital by 1.3% during the third quarter. BKM Wealth Management LLC now owns 42,394 shares of the investment management company's stock valued at $865,000 after purchasing an additional 525 shares during the period. FSC Wealth Advisors LLC raised its position in Ares Capital by 10.0% during the second quarter. FSC Wealth Advisors LLC now owns 5,830 shares of the investment management company's stock valued at $128,000 after purchasing an additional 530 shares during the period. Perigon Wealth Management LLC raised its position in Ares Capital by 1.6% during the fourth quarter. Perigon Wealth Management LLC now owns 34,700 shares of the investment management company's stock valued at $702,000 after purchasing an additional 547 shares during the period. Finally, Balboa Wealth Partners raised its position in Ares Capital by 1.3% during the third quarter. Balboa Wealth Partners now owns 44,755 shares of the investment management company's stock valued at $913,000 after purchasing an additional 559 shares during the period. Hedge funds and other institutional investors own 27.38% of the company's stock.

Wall Street Analyst Weigh In

A number of brokerages have issued reports on ARCC. Wells Fargo & Company decreased their price objective on Ares Capital from $21.00 to $20.00 and set an "overweight" rating on the stock in a research report on Thursday, February 5th. Royal Bank Of Canada decreased 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. UBS Group decreased their price objective on Ares Capital from $21.00 to $19.00 and set a "neutral" rating on the stock in a research report on Friday, March 13th. B. Riley Financial reiterated a "buy" rating on shares of Ares Capital in a report on Monday, February 9th. Finally, Weiss Ratings reiterated a "hold (c+)" rating on shares of Ares Capital in a report on Monday, December 29th. Seven research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to MarketBeat, Ares Capital currently has an average rating of "Moderate Buy" and an average price target of $21.38.

Insider Buying and Selling at Ares Capital

In other news, CFO Scott C. Lem acquired 5,186 shares of Ares Capital stock in a transaction on Friday, February 6th. The shares were bought at an average cost of $19.29 per share, for a total transaction of $100,037.94. Following the acquisition, the chief financial officer directly owned 39,463 shares of the company's stock, valued at $761,241.27. This trade represents a 15.13% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CEO Michael Kort Schnabel acquired 12,500 shares of Ares Capital stock in a transaction on Thursday, February 5th. The shares were purchased at an average price of $19.13 per share, for a total transaction of $239,125.00. Following the completion of the acquisition, the chief executive officer directly owned 40,500 shares in the company, valued at $774,765. This trade represents a 44.64% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Company insiders own 0.49% of the company's stock.

Ares Capital Trading Up 0.7%

Shares of NASDAQ ARCC opened at $18.17 on Thursday. The company has a debt-to-equity ratio of 1.12, a quick ratio of 1.70 and a current ratio of 1.70. The business's 50 day moving average price is $18.75 and its 200-day moving average price is $19.76. Ares Capital Corporation has a fifty-two week low of $17.40 and a fifty-two week high of $23.42. The company has a market cap of $13.05 billion, a price-to-earnings ratio of 9.77 and a beta of 0.58.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its quarterly earnings results on Wednesday, February 4th. The investment management company reported $0.50 earnings per share for the quarter, hitting the consensus estimate of $0.50. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.The firm had revenue of $793.00 million for the quarter, compared to the consensus estimate of $795.20 million. During the same period in the prior year, the business posted $0.55 earnings per share. The company's revenue for the quarter was up 4.5% on a year-over-year basis. On average, sell-side analysts expect that Ares Capital Corporation will post 2.19 earnings per share for the current year.

Ares Capital Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th were issued a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a yield of 10.6%. The ex-dividend date was Friday, March 13th. Ares Capital's dividend payout ratio (DPR) is presently 103.23%.

About Ares Capital

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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