Sound Income Strategies LLC Lowers Stock Position in Capital Southwest Corporation $CSWC

Key Points

• Sound Income Strategies LLC reduced its Capital Southwest stake by 6.2% in the third quarter, selling 58,275 shares and retaining 876,046 shares valued at approximately $20.8 million. Institutional investors collectively own 23.42% of the company.
• Director William Thomas III purchased 2,170 shares at an average price of $23.04, increasing his holdings by 10.5%. Analysts maintain a generally positive view, with a consensus “Moderate Buy” rating and a $24.10 target price.
• Capital Southwest reported quarterly EPS of $0.58, exceeding estimates by $0.02, and declared a monthly dividend of $0.1934, equivalent to an annualized $2.32 payout and a 9.9% yield.

Sound Income Strategies LLC trimmed its position in Capital Southwest Corporation (NASDAQ:CSWC - Free Report) by 6.2% during the 3rd quarter, according to its most recent Form 13F filing with the SEC. The fund owned 876,046 shares of the asset manager's stock after selling 58,275 shares during the period. Capital Southwest comprises 0.5% of Sound Income Strategies LLC's portfolio, making the stock its 28th biggest holding. Sound Income Strategies LLC owned about 1.37% of Capital Southwest worth $20,797,000 at the end of the most recent quarter.

A number of other hedge funds have also recently modified their holdings of the business. Allied Private Wealth LLC purchased a new stake in Capital Southwest in the second quarter worth about $37,000. Osbon Capital Management LLC purchased a new stake in Capital Southwest during the 4th quarter valued at approximately $55,000. CENTRAL TRUST Co purchased a new position in shares of Capital Southwest in the first quarter worth $60,000. Burk Holdings LLC bought a new position in shares of Capital Southwest during the second quarter worth $73,000. Finally, Northwestern Mutual Wealth Management Co. purchased a new position in Capital Southwest during the second quarter valued at $95,000. Institutional investors own 23.42% of the company's stock.

Insider Activity at Capital Southwest

In related news, Director William Thomas, III purchased 2,170 shares of the company's stock in a transaction that occurred on Thursday, October 1st. The stock was bought at an average price of $23.04 per share, for a total transaction of $49,996.80. Following the completion of the transaction, the director owned 22,842 shares in the company, valued at approximately $526,279.68. The trade was a 10.50% increase in their position. The purchase was disclosed in a filing with the SEC, which is available at the SEC website. Insiders own 2.70% of the company's stock.

Capital Southwest Price Performance

Shares of CSWC stock traded down $0.20 on Friday, reaching $23.54. The company's stock had a trading volume of 420,613 shares, compared to its average volume of 648,996. The stock's fifty day simple moving average is $24.27 and its 200-day simple moving average is $23.66. Capital Southwest Corporation has a 1 year low of $19.37 and a 1 year high of $25.75. The company has a current ratio of 0.17, a quick ratio of 0.17 and a debt-to-equity ratio of 0.62. The company has a market capitalization of $1.50 billion, a price-to-earnings ratio of 13.01 and a beta of 0.71.

Capital Southwest (NASDAQ:CSWC - Get Free Report) last released its quarterly earnings results on Monday, August 3rd. The asset manager reported $0.58 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.56 by $0.02. Capital Southwest had a net margin of 46.68% and a return on equity of 13.88%. The company had revenue of $61.05 million for the quarter, compared to the consensus estimate of $61.22 million. During the same quarter in the prior year, the firm earned $0.61 earnings per share. Analysts forecast that Capital Southwest Corporation will post 2.27 earnings per share for the current fiscal year.

Capital Southwest Announces Dividend

The firm also recently declared a monthly dividend, which will be paid on Thursday, December 31st. Investors of record on Tuesday, December 15th will be issued a $0.1934 dividend. The ex-dividend date of this dividend is Tuesday, December 15th. This represents a $2.32 dividend on an annualized basis and a dividend yield of 9.9%. Capital Southwest's dividend payout ratio (DPR) is presently 128.18%.

Wall Street Analyst Weigh In

A number of brokerages have issued reports on CSWC. B. Riley Financial lifted their price target on shares of Capital Southwest from $24.50 to $25.50 and gave the company a "buy" rating in a report on Wednesday, August 5th. UBS Group increased their price objective on shares of Capital Southwest from $23.50 to $24.00 and gave the company a "neutral" rating in a report on Friday. Citigroup restated a "market outperform" rating on shares of Capital Southwest in a research report on Wednesday, August 5th. Weiss Ratings raised Capital Southwest from a "buy (b-)" rating to a "buy (b)" rating in a report on Monday, September 28th. Finally, Citizens Jmp boosted their target price on Capital Southwest from $25.00 to $26.00 and gave the stock a "market outperform" rating in a research report on Wednesday, August 5th. Six investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $24.10.

Capital Southwest Company Profile

Capital Southwest Corporation NASDAQ: CSWC is an internally managed business development company (BDC) that provides financing and investment solutions to middle-market companies. The company primarily invests in privately held businesses through secured debt, including first-lien, second-lien and unitranche loans, as well as subordinated debt and equity investments.

Capital Southwest generally focuses on established lower-middle-market companies in the United States. Its portfolio companies operate across a range of industries, and the company seeks to support acquisitions, recapitalizations, growth initiatives and other strategic or general corporate purposes through customized financing arrangements.

Founded in 1961, Capital Southwest has a long history as an investment company and operates under the regulatory framework governing BDCs.

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