Muzinich & Co. Inc. Raises Stock Position in Ares Capital Corporation $ARCC

Key Points

• Muzinich & Co. increased its stake in Ares Capital by 30.6% in Q4 to 2,142,606 shares (about $43.3M), making ARCC the largest holding in its portfolio at 13.6%.
• Insiders showed confidence with recent purchases: CEO Michael Kort Schnabel bought 12,500 shares (a 44.6% boost to his position) and CFO Scott C. Lem bought 5,186 shares (a 15.1% increase).
• Ares Capital pays a quarterly dividend of $0.48 (annualized $1.92) for a 10.6% yield, but its payout ratio is above 100% (103%), and analysts have lowered targets though the consensus remains a "Moderate Buy" with an average target of $21.38.

Muzinich & Co. Inc. grew its holdings in shares of Ares Capital Corporation (NASDAQ:ARCC - Free Report) by 30.6% during the 4th quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 2,142,606 shares of the investment management company's stock after buying an additional 502,493 shares during the quarter. Ares Capital makes up 13.6% of Muzinich & Co. Inc.'s portfolio, making the stock its largest position. Muzinich & Co. Inc. owned about 0.30% of Ares Capital worth $43,345,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds have also recently added to or reduced their stakes in ARCC. AQR Capital Management LLC raised its holdings in shares of Ares Capital by 6.5% in the 1st quarter. AQR Capital Management LLC now owns 16,502 shares of the investment management company's stock valued at $365,000 after purchasing an additional 1,000 shares during the period. Dynamic Technology Lab Private Ltd bought a new stake in shares of Ares Capital in the 1st quarter valued at about $273,000. Goldman Sachs Group Inc. raised its holdings in shares of Ares Capital by 14.5% in 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 purchasing an additional 358,829 shares during the period. Empowered Funds LLC raised its holdings in shares of Ares Capital by 139.9% in the 1st quarter. Empowered Funds LLC now owns 27,655 shares of the investment management company's stock valued at $613,000 after purchasing an additional 16,128 shares during the period. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC bought a new stake in shares of Ares Capital in the 1st quarter valued at about $14,766,000. 27.38% of the stock is owned by institutional investors.

Insider Buying and Selling

In other Ares Capital news, CEO Michael Kort Schnabel bought 12,500 shares of the firm's 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 transaction, the chief executive officer directly owned 40,500 shares in the company, valued at approximately $774,765. This trade represents a 44.64% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CFO Scott C. Lem bought 5,186 shares of the firm's stock in a transaction on Friday, February 6th. The shares were acquired at an average price of $19.29 per share, for a total transaction of $100,037.94. Following the transaction, the chief financial officer owned 39,463 shares in the company, valued at approximately $761,241.27. This represents a 15.13% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Corporate insiders own 0.49% of the company's stock.

Wall Street Analyst Weigh In

A number of brokerages have recently issued reports on ARCC. JPMorgan Chase & Co. dropped their target price on shares of Ares Capital from $22.00 to $19.00 and set an "overweight" rating on the stock in a report on Friday, March 13th. Wells Fargo & Company dropped their target price on shares of Ares Capital from $21.00 to $20.00 and set an "overweight" rating on the stock in a report on Thursday, February 5th. Royal Bank Of Canada dropped their target price on shares of Ares Capital from $23.00 to $22.00 and set an "outperform" rating on the stock in a report on Monday, February 9th. Wall Street Zen cut shares of Ares Capital from a "hold" rating to a "sell" rating in a report on Saturday, February 7th. Finally, UBS Group dropped their target price on shares of Ares Capital from $21.00 to $19.00 and set a "neutral" rating on the stock in a report on Friday, March 13th. Seven investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $21.38.

Ares Capital Stock Down 1.4%

Ares Capital stock opened at $18.05 on Wednesday. The stock has a market cap of $12.96 billion, a P/E ratio of 9.70 and a beta of 0.58. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 1.12. Ares Capital Corporation has a twelve month low of $17.40 and a twelve month high of $23.42. The company's 50-day moving average price is $18.79 and its two-hundred day moving average price is $19.77.

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

Ares Capital Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 13th were given a dividend of $0.48 per share. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.6%. The ex-dividend date was Friday, March 13th. Ares Capital's dividend payout ratio is presently 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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