OFS Capital (NASDAQ:OFS) Shares Cross Below Two Hundred Day Moving Average - Here's What Happened

Key Points

• OFS Capital shares fell below their 200-day moving average on Wednesday, trading as low as $3.70 and last changing hands at $3.71. The 200-day average was $3.97, signaling continued weakness in the stock.
• Recent financial results were soft, with the company reporting $0.18 EPS versus the expected $0.21 and revenue of $2.56 million versus the $9.45 million consensus estimate. The stock also carries a very low liquidity profile, with quick and current ratios both at 0.04.
• OFS Capital continues to pay a high dividend, recently issuing a quarterly payout of $0.17, or $0.68 annualized, which implies an 18.3% yield. However, analysts remain cautious, with a consensus rating of Reduce and a target price of $7.00.

OFS Capital Corporation (NASDAQ:OFS - Get Free Report)'s share price passed below its 200-day moving average during trading on Wednesday . The stock has a 200-day moving average of $3.97 and traded as low as $3.70. OFS Capital shares last traded at $3.71, with a volume of 30,993 shares changing hands.

Wall Street Analysts Forecast Growth

Several research analysts recently issued reports on OFS shares. Wall Street Zen upgraded shares of OFS Capital from a "sell" rating to a "hold" rating in a research report on Sunday, May 17th. Weiss Ratings reaffirmed a "sell (d)" rating on shares of OFS Capital in a research note on Thursday, June 4th. One analyst has rated the stock with a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of "Reduce" and a consensus target price of $7.00.

OFS Capital Stock Performance

The company has a quick ratio of 0.04, a current ratio of 0.04 and a debt-to-equity ratio of 0.49. The company has a fifty day moving average price of $3.59 and a 200 day moving average price of $3.97. The stock has a market cap of $49.71 million, a PE ratio of -1.33 and a beta of 0.84.

OFS Capital (NASDAQ:OFS - Get Free Report) last posted its quarterly earnings results on Thursday, April 30th. The investment management company reported $0.18 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.21 by ($0.03). The company had revenue of $2.56 million for the quarter, compared to the consensus estimate of $9.45 million. OFS Capital had a positive return on equity of 8.74% and a negative net margin of 95.15%.

OFS Capital Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, July 6th. Stockholders of record on Friday, June 19th were issued a $0.17 dividend. The ex-dividend date was Thursday, June 18th. This represents a $0.68 annualized dividend and a dividend yield of 18.3%. OFS Capital's dividend payout ratio (DPR) is currently -24.37%.

Institutional Investors Weigh In On OFS Capital

Several institutional investors have recently added to or reduced their stakes in the company. Royal Bank of Canada raised its stake in shares of OFS Capital by 53.3% during the fourth quarter. Royal Bank of Canada now owns 11,500 shares of the investment management company's stock valued at $55,000 after acquiring an additional 4,000 shares during the last quarter. Bank of America Corp DE increased its holdings in OFS Capital by 245.3% during the 4th quarter. Bank of America Corp DE now owns 7,079 shares of the investment management company's stock valued at $57,000 after purchasing an additional 5,029 shares during the period. Two Sigma Investments LP raised its position in OFS Capital by 5.8% during the 3rd quarter. Two Sigma Investments LP now owns 120,908 shares of the investment management company's stock valued at $930,000 after purchasing an additional 6,636 shares during the last quarter. Jane Street Group LLC purchased a new stake in OFS Capital in the 4th quarter worth approximately $66,000. Finally, Virtus Investment Advisers LLC increased its stake in shares of OFS Capital by 24.0% during the fourth quarter. Virtus Investment Advisers LLC now owns 82,221 shares of the investment management company's stock valued at $391,000 after buying an additional 15,935 shares during the period. Hedge funds and other institutional investors own 10.81% of the company's stock.

About OFS Capital

OFS Capital Corporation NASDAQ: OFS is a business development company (BDC) that provides customized debt and equity financing solutions to U.S. middle-market companies. As an externally managed BDC, OFS Capital focuses on sponsoring capital structures that support growth initiatives, recapitalizations, acquisitions and other strategic transactions. The firm targets companies that demonstrate strong cash flow potential and scalable business models across a range of industries.

The company's investment portfolio typically includes senior secured loans, unitranche facilities, mezzanine debt and equity co-investments.

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