Independent Financial Group LLC Takes Position in Prospect Capital Corporation $PSEC

Key Points

• Independent Financial Group LLC bought a new stake in Prospect Capital during Q1, purchasing 3.31 million shares valued at about $8.64 million. The filing shows it owned 0.68% of the company.
• Prospect Capital reported better-than-expected earnings for the quarter, posting $0.16 per share versus the $0.11 consensus estimate. Revenue came in below expectations at $150.07 million.
• The company announced a monthly dividend of $0.035 per share, implying an annualized yield of 18.0%. However, analysts remain cautious overall, with a consensus rating of “Sell” and a target price of $2.00.

Independent Financial Group LLC purchased a new position in shares of Prospect Capital Corporation (NASDAQ:PSEC - Free Report) during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund purchased 3,311,725 shares of the financial services provider's stock, valued at approximately $8,644,000. Independent Financial Group LLC owned 0.68% of Prospect Capital as of its most recent SEC filing.

Several other large investors have also recently added to or reduced their stakes in the company. Catalyst Financial Partners LLC acquired a new stake in Prospect Capital in the fourth quarter valued at about $26,000. Bfsg LLC acquired a new position in Prospect Capital during the 4th quarter worth approximately $27,000. Ground Swell Capital LLC purchased a new position in shares of Prospect Capital during the 4th quarter worth approximately $28,000. Schonfeld Strategic Advisors LLC acquired a new stake in shares of Prospect Capital in the 4th quarter valued at approximately $28,000. Finally, Evergreen Capital Management LLC acquired a new stake in shares of Prospect Capital in the 4th quarter valued at approximately $30,000. 9.06% of the stock is owned by hedge funds and other institutional investors.

Prospect Capital Trading Up 2.6%

Shares of PSEC stock opened at $2.33 on Friday. The stock has a market cap of $1.17 billion, a P/E ratio of -6.30 and a beta of 0.78. Prospect Capital Corporation has a fifty-two week low of $2.11 and a fifty-two week high of $3.50. The business has a fifty day simple moving average of $2.27 and a 200-day simple moving average of $2.57. The company has a quick ratio of 0.79, a current ratio of 0.79 and a debt-to-equity ratio of 0.59.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last posted its earnings results on Thursday, May 7th. The financial services provider reported $0.16 earnings per share for the quarter, beating the consensus estimate of $0.11 by $0.05. The firm had revenue of $150.07 million during the quarter, compared to the consensus estimate of $163.23 million. Prospect Capital had a negative net margin of 10.42% and a positive return on equity of 12.03%.

Prospect Capital Announces Dividend

The firm also recently disclosed a monthly dividend, which will be paid on Thursday, September 17th. Stockholders of record on Thursday, August 27th will be paid a dividend of $0.035 per share. This represents a c) dividend on an annualized basis and a dividend yield of 18.0%. The ex-dividend date of this dividend is Thursday, August 27th. Prospect Capital's dividend payout ratio (DPR) is -113.51%.

Analyst Upgrades and Downgrades

A number of research firms recently weighed in on PSEC. Weiss Ratings upgraded Prospect Capital from a "sell (d)" rating to a "sell (d+)" rating in a research note on Friday, May 29th. Wall Street Zen upgraded Prospect Capital from a "hold" rating to a "buy" rating in a research report on Sunday, June 21st. Finally, Wells Fargo & Company decreased their target price on shares of Prospect Capital from $2.50 to $2.00 and set an "underweight" rating on the stock in a research report on Tuesday, May 12th. Two research analysts have rated the stock with a Sell rating, According to MarketBeat, the company presently has an average rating of "Sell" and a consensus target price of $2.00.

Insider Activity

In related news, CEO John F. Barry bought 1,067,648 shares of Prospect Capital stock in a transaction that occurred on Tuesday, June 23rd. The shares were purchased at an average price of $2.27 per share, with a total value of $2,423,560.96. Following the purchase, the chief executive officer owned 89,213,725 shares in the company, valued at $202,515,155.75. This represents a 1.21% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this link. In the last three months, insiders purchased 2,732,648 shares of company stock worth $6,216,361. Insiders own 0.03% of the company's stock.

Prospect Capital Company Profile

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.

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