Oaktree Specialty Lending (NASDAQ:OCSL) Stock Price Down 5.9% - Here's What Happened

Key Points

• Shares fell 5.9% intraday to $12.14 on Tuesday with only ~296,611 shares traded, about 67% below the stock's average daily volume and down from a prior close of $12.90.
• Analysts have an average "Hold" rating on OCSL with a mean price target of $12.17, but several firms have trimmed targets recently (JPMorgan to $10.50, Wells Fargo to $12.00) while others upgraded to hold.
• Oaktree reported Q1 EPS of $0.38 (beating by $0.02) but missed revenue estimates, and it pays a quarterly $0.40 dividend (annualized yield ~13.2%) despite a very high payout ratio of 444%, which may raise sustainability concerns.

Oaktree Specialty Lending Corp. (NASDAQ:OCSL - Get Free Report) dropped 5.9% during mid-day trading on Tuesday . The stock traded as low as $12.12 and last traded at $12.1390. Approximately 296,611 shares changed hands during mid-day trading, a decline of 67% from the average daily volume of 897,870 shares. The stock had previously closed at $12.90.

Analysts Set New Price Targets

OCSL has been the topic of several recent research reports. Weiss Ratings raised shares of Oaktree Specialty Lending from a "sell (d+)" rating to a "hold (c-)" rating in a report on Wednesday, April 15th. JPMorgan Chase & Co. reduced their price objective on shares of Oaktree Specialty Lending from $13.50 to $10.50 and set a "neutral" rating on the stock in a research note on Friday, March 13th. Zacks Research raised shares of Oaktree Specialty Lending from a "strong sell" rating to a "hold" rating in a research note on Monday, April 6th. Wells Fargo & Company reduced their price objective on shares of Oaktree Specialty Lending from $13.00 to $12.00 and set an "equal weight" rating on the stock in a research note on Thursday, February 5th. Finally, Wall Street Zen raised shares of Oaktree Specialty Lending from a "sell" rating to a "hold" rating in a research note on Saturday, April 11th. Six equities research analysts have rated the stock with a Hold rating, Based on data from MarketBeat.com, Oaktree Specialty Lending presently has an average rating of "Hold" and an average price target of $12.17.

Oaktree Specialty Lending Stock Performance

The company has a quick ratio of 0.16, a current ratio of 0.16 and a debt-to-equity ratio of 0.66. The company has a market cap of $1.07 billion, a PE ratio of 33.71 and a beta of 0.52. The stock's 50 day simple moving average is $11.73 and its two-hundred day simple moving average is $12.61.

Oaktree Specialty Lending (NASDAQ:OCSL - Get Free Report) last posted its quarterly earnings results on Tuesday, May 5th. The credit services provider reported $0.38 earnings per share for the quarter, topping analysts' consensus estimates of $0.36 by $0.02. The company had revenue of $69.74 million for the quarter, compared to the consensus estimate of $74.35 million. Oaktree Specialty Lending had a net margin of 10.58% and a return on equity of 9.75%. During the same quarter last year, the firm posted $0.45 earnings per share. As a group, research analysts anticipate that Oaktree Specialty Lending Corp. will post 1.49 earnings per share for the current year.

Oaktree Specialty Lending Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Monday, March 16th were paid a dividend of $0.40 per share. The ex-dividend date of this dividend was Monday, March 16th. This represents a $1.60 dividend on an annualized basis and a yield of 13.2%. Oaktree Specialty Lending's dividend payout ratio (DPR) is currently 444.44%.

Insiders Place Their Bets

In related news, Director Phyllis R. Caldwell purchased 2,500 shares of the business's stock in a transaction on Monday, March 16th. The shares were bought at an average price of $10.77 per share, with a total value of $26,925.00. Following the completion of the purchase, the director directly owned 23,500 shares in the company, valued at approximately $253,095. This trade represents a 11.90% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available at this hyperlink. 0.29% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Oaktree Specialty Lending

Several large investors have recently made changes to their positions in the business. Stonegate Investment Group LLC increased its position in shares of Oaktree Specialty Lending by 5.6% in the third quarter. Stonegate Investment Group LLC now owns 15,171 shares of the credit services provider's stock worth $198,000 after acquiring an additional 800 shares in the last quarter. Cornerstone Advisory LLC increased its position in shares of Oaktree Specialty Lending by 2.0% in the first quarter. Cornerstone Advisory LLC now owns 43,702 shares of the credit services provider's stock worth $494,000 after acquiring an additional 844 shares in the last quarter. Running Point Capital Advisors LLC increased its position in shares of Oaktree Specialty Lending by 3.1% in the fourth quarter. Running Point Capital Advisors LLC now owns 28,789 shares of the credit services provider's stock worth $367,000 after acquiring an additional 877 shares in the last quarter. Close Asset Management Ltd increased its position in shares of Oaktree Specialty Lending by 19.4% in the third quarter. Close Asset Management Ltd now owns 7,400 shares of the credit services provider's stock worth $97,000 after acquiring an additional 1,200 shares in the last quarter. Finally, SG Americas Securities LLC grew its holdings in Oaktree Specialty Lending by 11.9% during the 3rd quarter. SG Americas Securities LLC now owns 11,940 shares of the credit services provider's stock valued at $156,000 after purchasing an additional 1,265 shares in the last quarter. Institutional investors and hedge funds own 36.79% of the company's stock.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation NASDAQ: OCSL is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.

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