Smith Asset Management Co. LLC Acquires Shares of 275,616 Ares Capital Corporation $ARCC

Key Points

• Smith Asset Management Co. LLC has acquired 275,616 shares of Ares Capital Corporation (NASDAQ:ARCC), valued at approximately $6,108,000, making it the firm's second-largest position.
• Ares Capital recently reported earnings of $0.50 per share for the quarter, falling short of expectations, with revenue of $614 million compared to the $748.76 million forecasted by analysts.
• The company declared a quarterly dividend of $0.48, representing an annualized yield of 8.5%, scheduled to be paid on September 30th to shareholders of record.

Smith Asset Management Co. LLC purchased a new stake in Ares Capital Corporation (NASDAQ:ARCC - Free Report) in the 1st quarter, according to the company in its most recent Form 13F filing with the SEC. The institutional investor purchased 275,616 shares of the investment management company's stock, valued at approximately $6,108,000. Ares Capital accounts for approximately 5.7% of Smith Asset Management Co. LLC's holdings, making the stock its 2nd largest position.

Several other hedge funds have also made changes to their positions in ARCC. CoreCap Advisors LLC grew its stake in shares of Ares Capital by 14.5% in the 4th quarter. CoreCap Advisors LLC now owns 12,027 shares of the investment management company's stock valued at $263,000 after buying an additional 1,523 shares during the period. Focus Partners Wealth purchased a new stake in shares of Ares Capital in the 4th quarter valued at approximately $1,260,000. Lazard Asset Management LLC boosted its position in shares of Ares Capital by 31.6% during the 4th quarter. Lazard Asset Management LLC now owns 31,400 shares of the investment management company's stock worth $687,000 after purchasing an additional 7,547 shares during the period. McGowan Group Asset Management Inc. boosted its position in shares of Ares Capital by 0.4% during the 4th quarter. McGowan Group Asset Management Inc. now owns 1,042,586 shares of the investment management company's stock worth $22,822,000 after purchasing an additional 3,907 shares during the period. Finally, Obermeyer Wealth Partners boosted its position in shares of Ares Capital by 12.1% during the 4th quarter. Obermeyer Wealth Partners now owns 174,913 shares of the investment management company's stock worth $3,829,000 after purchasing an additional 18,898 shares during the period. Hedge funds and other institutional investors own 27.38% of the company's stock.

Analysts Set New Price Targets

A number of research firms recently weighed in on ARCC. UBS Group increased their price objective on shares of Ares Capital from $22.00 to $22.50 and gave the stock a "neutral" rating in a research report on Wednesday, July 16th. Keefe, Bruyette & Woods increased their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "outperform" rating in a research report on Wednesday, July 30th. Wells Fargo & Company increased their price objective on shares of Ares Capital from $22.00 to $23.00 and gave the stock an "overweight" rating in a research report on Wednesday, July 30th. B. Riley raised shares of Ares Capital from a "neutral" rating to a "buy" rating and increased their price objective for the stock from $22.50 to $23.50 in a research report on Wednesday, July 30th. Finally, Wall Street Zen raised shares of Ares Capital from a "sell" rating to a "hold" rating in a research report on Saturday, August 16th. Seven investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company's stock. According to MarketBeat, Ares Capital has a consensus rating of "Moderate Buy" and an average target price of $22.86.

Ares Capital Stock Down 0.4%

Ares Capital stock traded down $0.10 during mid-day trading on Friday, reaching $22.30. 4,924,315 shares of the company's stock were exchanged, compared to its average volume of 2,885,228. The company has a market cap of $15.73 billion, a P/E ratio of 10.88 and a beta of 0.70. Ares Capital Corporation has a twelve month low of $18.26 and a twelve month high of $23.84. 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 fifty day moving average of $22.55 and a 200-day moving average of $21.87.

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

Ares Capital Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 30th. Stockholders of record on Monday, September 15th will be given a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a dividend yield of 8.6%. The ex-dividend date of this dividend is Monday, September 15th. Ares Capital's 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.