Merit Financial Group LLC Trims Stock Position in Ares Capital Corporation $ARCC

Key Points

• Merit Financial Group LLC reduced its stake in Ares Capital Corporation by 44.7%, now holding 251,961 shares valued at approximately $5.53 million after selling 203,454 shares in the second quarter.
• Several institutional investors, including HighTower Advisors and Kingstone Capital Partners, have increased their positions in Ares Capital, indicating strong interest in the company despite Merit’s significant reduction.
• Ares Capital's latest earnings report revealed a miss on earnings estimates with $0.50 per share compared to the expected $0.51, and a quarterly dividend of $0.48 per share represents a yield of 9.5%.

Merit Financial Group LLC cut its holdings in Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 44.7% during the 2nd quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 251,961 shares of the investment management company's stock after selling 203,454 shares during the quarter. Merit Financial Group LLC's holdings in Ares Capital were worth $5,533,000 at the end of the most recent quarter.

Other institutional investors have also recently modified their holdings of the company. Kingstone Capital Partners Texas LLC purchased a new position in Ares Capital during the second quarter worth $877,203,000. HighTower Advisors LLC boosted its stake in shares of Ares Capital by 87.2% during the first quarter. HighTower Advisors LLC now owns 2,621,109 shares of the investment management company's stock valued at $58,084,000 after acquiring an additional 1,220,570 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC acquired a new position in Ares Capital in the 1st quarter valued at about $14,766,000. CCLA Investment Management lifted its holdings in Ares Capital by 26.5% in the 1st quarter. CCLA Investment Management now owns 2,799,023 shares of the investment management company's stock valued at $62,026,000 after purchasing an additional 587,068 shares in the last quarter. Finally, SCS Capital Management LLC purchased a new position in Ares Capital in the 1st quarter valued at about $11,778,000. 27.38% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of equities research analysts have recently commented on the stock. Wells Fargo & Company lifted their price target on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "overweight" rating in a report on Wednesday, July 30th. UBS Group lifted their target price on shares of Ares Capital from $22.00 to $22.50 and gave the stock a "neutral" rating in a research note on Wednesday, July 16th. B. Riley raised Ares Capital from a "neutral" rating to a "buy" rating and increased their price target for the stock from $22.50 to $23.50 in a research note on Wednesday, July 30th. Wall Street Zen upgraded Ares Capital from a "sell" rating to a "hold" rating in a report on Saturday, August 16th. Finally, JMP Securities set a $23.00 target price on Ares Capital and gave the company a "market outperform" rating in a research note on Thursday, July 31st. Eight research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $22.86.

Ares Capital Trading Down 0.1%

ARCC stock opened at $20.12 on Tuesday. The company has a quick ratio of 1.14, a current ratio of 1.14 and a debt-to-equity ratio of 1.01. The company has a market cap of $14.19 billion, a price-to-earnings ratio of 9.81 and a beta of 0.68. The business has a fifty day simple moving average of $21.86 and a 200-day simple moving average of $21.70. Ares Capital Corporation has a 52 week low of $18.26 and a 52 week high of $23.84.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its earnings results on Tuesday, July 29th. The investment management company reported $0.50 earnings per share for the quarter, missing analysts' consensus estimates of $0.51 by ($0.01). The firm had revenue of $614.00 million during the quarter, compared to analyst estimates of $748.76 million. Ares Capital had a net margin of 44.94% and a return on equity of 10.48%. During the same quarter in the previous year, the business posted $0.61 EPS. On average, equities research analysts expect that Ares Capital Corporation will post 2.19 EPS for the current year.

Ares Capital Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Tuesday, September 30th. Investors of record on Monday, September 15th were given a dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a yield of 9.5%. The ex-dividend date of this dividend was Monday, September 15th. Ares Capital's dividend payout ratio is 93.66%.

Ares Capital Profile

Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.

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