Quantum Portfolio Management LLC Acquires New Shares in Sixth Street Specialty Lending, Inc. $TSLX

Key Points

• Quantum Portfolio Management LLC initiated a large new position in Sixth Street Specialty Lending in Q1, buying 14.9 million shares worth about $273.4 million. The stake made up about 2.9% of its portfolio and represented 15.66% ownership of the company.
• Sixth Street Specialty Lending reported weaker-than-expected quarterly results, with earnings of $0.42 per share versus the $0.49 consensus and revenue of $93.4 million versus expectations of $103.14 million.
• The company also boosted its quarterly dividend to $0.42 per share, or $1.68 annually, implying a 9.9% yield. However, the payout ratio is high at 146.09%, and analyst sentiment remains mixed with a consensus rating of “Moderate Buy.”

Quantum Portfolio Management LLC bought a new position in Sixth Street Specialty Lending, Inc. (NYSE:TSLX - Free Report) in the first quarter, according to the company in its most recent disclosure with the SEC. The institutional investor bought 14,876,741 shares of the financial services provider's stock, valued at approximately $273,434,000. Sixth Street Specialty Lending makes up about 2.9% of Quantum Portfolio Management LLC's investment portfolio, making the stock its 7th largest holding. Quantum Portfolio Management LLC owned 15.66% of Sixth Street Specialty Lending at the end of the most recent quarter.

A number of other institutional investors and hedge funds have also bought and sold shares of the company. Platform Technology Partners grew its holdings in shares of Sixth Street Specialty Lending by 5.8% during the first quarter. Platform Technology Partners now owns 36,444 shares of the financial services provider's stock worth $670,000 after purchasing an additional 2,000 shares during the last quarter. Sound Income Strategies LLC increased its stake in shares of Sixth Street Specialty Lending by 2.4% in the first quarter. Sound Income Strategies LLC now owns 2,571,052 shares of the financial services provider's stock valued at $46,562,000 after buying an additional 59,937 shares during the period. Strs Ohio raised its holdings in Sixth Street Specialty Lending by 101.8% in the 1st quarter. Strs Ohio now owns 4,347,710 shares of the financial services provider's stock valued at $79,911,000 after buying an additional 2,193,551 shares during the last quarter. Sage Investment Counsel LLC raised its holdings in Sixth Street Specialty Lending by 3.2% in the 1st quarter. Sage Investment Counsel LLC now owns 25,577 shares of the financial services provider's stock valued at $470,000 after buying an additional 800 shares during the last quarter. Finally, MQS Management LLC acquired a new stake in Sixth Street Specialty Lending during the 1st quarter worth approximately $295,000. Institutional investors and hedge funds own 70.25% of the company's stock.

Sixth Street Specialty Lending Price Performance

Sixth Street Specialty Lending stock opened at $16.90 on Thursday. The stock's 50 day moving average is $17.38 and its 200 day moving average is $18.91. The company has a debt-to-equity ratio of 1.17, a current ratio of 3.39 and a quick ratio of 3.39. The firm has a market cap of $1.61 billion, a P/E ratio of 14.69 and a beta of 0.59. Sixth Street Specialty Lending, Inc. has a one year low of $16.04 and a one year high of $25.17.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) last released its earnings results on Tuesday, May 5th. The financial services provider reported $0.42 earnings per share for the quarter, missing analysts' consensus estimates of $0.49 by ($0.07). The firm had revenue of $93.40 million for the quarter, compared to analyst estimates of $103.14 million. Sixth Street Specialty Lending had a net margin of 25.25% and a return on equity of 11.92%. During the same period in the prior year, the company posted $0.58 EPS. As a group, research analysts expect that Sixth Street Specialty Lending, Inc. will post 1.72 EPS for the current year.

Sixth Street Specialty Lending Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 30th. Stockholders of record on Monday, June 15th were paid a $0.42 dividend. The ex-dividend date of this dividend was Monday, June 15th. This represents a $1.68 dividend on an annualized basis and a dividend yield of 9.9%. This is an increase from Sixth Street Specialty Lending's previous quarterly dividend of $0.01. Sixth Street Specialty Lending's payout ratio is currently 146.09%.

Insider Activity at Sixth Street Specialty Lending

In other news, VP Ross Anthony Bruck acquired 8,000 shares of the firm's stock in a transaction dated Monday, May 11th. The stock was bought at an average cost of $17.76 per share, for a total transaction of $142,080.00. Following the completion of the transaction, the vice president directly owned 18,250 shares in the company, valued at $324,120. This represents a 78.05% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Corporate insiders own 3.83% of the company's stock.

Analyst Ratings Changes

A number of research firms have weighed in on TSLX. Royal Bank Of Canada reduced their target price on shares of Sixth Street Specialty Lending from $22.00 to $20.00 and set an "outperform" rating on the stock in a report on Thursday, May 7th. Wall Street Zen downgraded shares of Sixth Street Specialty Lending from a "hold" rating to a "sell" rating in a research note on Saturday, May 9th. Keefe, Bruyette & Woods cut their price target on shares of Sixth Street Specialty Lending from $21.00 to $18.50 and set an "outperform" rating on the stock in a report on Thursday, May 7th. Zacks Research cut shares of Sixth Street Specialty Lending from a "hold" rating to a "strong sell" rating in a research note on Thursday, May 7th. Finally, Wells Fargo & Company decreased their price objective on Sixth Street Specialty Lending from $20.00 to $19.00 and set an "overweight" rating for the company in a report on Thursday, May 7th. Five equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $19.67.

About Sixth Street Specialty Lending

Sixth Street Specialty Lending Inc NYSE: TSLX is a closed-end, externally managed business development company that provides flexible debt financing solutions to middle-market companies. The fund primarily targets senior secured loans, unitranche facilities, mezzanine debt, second-lien financings and equity co-investment opportunities. By structuring tailored capital solutions, Sixth Street Specialty Lending seeks to support growth initiatives, recapitalizations and refinancings across a diverse set of industries, including technology, healthcare and business services.

As an affiliate of Sixth Street Partners, a global alternative investment firm, the company leverages the broader platform’s credit research, operational expertise and industry relationships.

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