FS KKR Capital (NYSE:FSK) Hits New 12-Month Low - Should You Sell?

Key Points

• FSK hit a new 52-week low, trading as low as $9.72 (last $10.03) on heavy volume, well below its 50-day and 200-day moving averages.
• Several analysts have cut ratings and price targets—MarketBeat shows a consensus "Reduce" with a $13.36 target after downgrades from Wells Fargo, Zacks, Keefe Bruyette & Woods and JPMorgan.
• The company reported an earnings miss (Q EPS $0.52 vs. $0.55 expected), has weak profitability metrics, and announced a special $0.03 dividend

FS KKR Capital Corp. (NYSE:FSK - Get Free Report)'s share price reached a new 52-week low during mid-day trading on Wednesday . The company traded as low as $9.72 and last traded at $10.0250, with a volume of 616510 shares traded. The stock had previously closed at $10.26.

Wall Street Analyst Weigh In

FSK has been the topic of a number of research reports. Wells Fargo & Company dropped their target price on shares of FS KKR Capital from $15.00 to $11.00 and set an "equal weight" rating on the stock in a research report on Friday, February 27th. Zacks Research downgraded shares of FS KKR Capital from a "hold" rating to a "strong sell" rating in a research note on Monday, March 2nd. Keefe, Bruyette & Woods dropped their price objective on shares of FS KKR Capital from $18.00 to $15.00 and set a "market perform" rating on the stock in a report on Monday, March 2nd. JPMorgan Chase & Co. cut their price objective on shares of FS KKR Capital from $13.00 to $9.50 and set a "neutral" rating on the stock in a research report on Friday, March 13th. Finally, Weiss Ratings downgraded FS KKR Capital from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Thursday, March 5th. Seven analysts have rated the stock with a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the stock has an average rating of "Reduce" and a consensus target price of $13.36.

FS KKR Capital Price Performance

The company has a debt-to-equity ratio of 1.31, a current ratio of 3.05 and a quick ratio of 3.05. The business's fifty day moving average price is $12.92 and its 200-day moving average price is $14.60. The stock has a market capitalization of $2.80 billion, a price-to-earnings ratio of 332.83 and a beta of 0.86.

FS KKR Capital (NYSE:FSK - Get Free Report) last posted its earnings results on Wednesday, February 25th. The company reported $0.52 earnings per share for the quarter, missing analysts' consensus estimates of $0.55 by ($0.03). The business had revenue of $348.00 million during the quarter, compared to analyst estimates of $361.59 million. FS KKR Capital had a return on equity of 5.21% and a net margin of 0.72%.During the same quarter in the prior year, the company earned $0.66 EPS. On average, research analysts forecast that FS KKR Capital Corp. will post 2.89 EPS for the current year.

FS KKR Capital Dividend Announcement

The business also recently announced a special dividend, which will be paid on Thursday, April 2nd. Investors of record on Wednesday, March 18th will be given a dividend of $0.03 per share. The ex-dividend date of this dividend is Wednesday, March 18th. This represents a dividend yield of 117.0%. FS KKR Capital's payout ratio is presently 6,000.00%.

Insider Transactions at FS KKR Capital

In related news, insider Daniel Pietrzak purchased 5,000 shares of the stock in a transaction that occurred on Friday, February 27th. The stock was acquired at an average cost of $11.25 per share, with a total value of $56,250.00. Following the transaction, the insider owned 64,800 shares of the company's stock, valued at $729,000. This represents a 8.36% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Company insiders own 0.25% of the company's stock.

Hedge Funds Weigh In On FS KKR Capital

A number of hedge funds have recently bought and sold shares of the company. Beacon Capital Management Inc. purchased a new stake in shares of FS KKR Capital in the second quarter valued at about $26,000. Thurston Springer Miller Herd & Titak Inc. purchased a new position in FS KKR Capital during the fourth quarter worth about $26,000. Jessup Wealth Management Inc bought a new stake in FS KKR Capital in the 4th quarter worth about $26,000. FNY Investment Advisers LLC purchased a new stake in FS KKR Capital in the 4th quarter valued at about $28,000. Finally, Eastern Bank increased its stake in FS KKR Capital by 355.6% in the 3rd quarter. Eastern Bank now owns 2,000 shares of the company's stock valued at $30,000 after buying an additional 1,561 shares during the last quarter. 36.26% of the stock is owned by hedge funds and other institutional investors.

FS KKR Capital Company Profile

FS KKR Capital Corp NYSE: FSK is a closed-end, externally managed business development company that primarily invests in private middle-market U.S. companies. The firm seeks to generate current income and capital appreciation by structuring investments in floating-rate senior secured loans, unitranche financings, second lien debt and mezzanine instruments. As a business development company, FSK provides financing solutions designed to support growth initiatives, acquisitions, leveraged buyouts and recapitalizations for privately held enterprises.

Established in 2018 through a strategic partnership between FS Investment Corporation and KKR Credit Advisors, a division of global investment firm KKR & Co Inc, FSK combines the credit underwriting capabilities of KKR’s global platform with FS’s expertise in private credit markets.

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