PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) Sees Significant Decline in Short Interest

Key Points

• Short interest in PennantPark Floating Rate Capital fell sharply by 18.5% to 2,866,711 shares as of March 31, representing about 2.9% of the stock and a days-to-cover of 2.8.
• Company insiders increased their stakes, with Director Jose A. Briones buying 5,895 shares and CFO Richard T. Allorto, Jr. buying 15,000 shares, indicating notable insider buying.
• PFLT pays a monthly dividend of $0.1025 (annualized yield ~14.2%), but the payout ratio is extremely high at 361.76% and recent EPS of $0.27 missed estimates, raising concerns about dividend sustainability.

PennantPark Floating Rate Capital Ltd. (NYSE:PFLT - Get Free Report) was the recipient of a large drop in short interest in March. As of March 31st, there was short interest totaling 2,866,711 shares, a drop of 18.5% from the March 15th total of 3,516,343 shares. Based on an average daily trading volume, of 1,034,626 shares, the days-to-cover ratio is presently 2.8 days. Currently, 2.9% of the shares of the company are short sold.

Analysts Set New Price Targets

Several research firms have commented on PFLT. Maxim Group set a $10.50 target price on shares of PennantPark Floating Rate Capital in a research report on Wednesday, February 11th. Keefe, Bruyette & Woods dropped their target price on shares of PennantPark Floating Rate Capital from $10.50 to $10.00 and set an "outperform" rating on the stock in a research report on Thursday, February 12th. Wall Street Zen raised shares of PennantPark Floating Rate Capital from a "sell" rating to a "hold" rating in a research report on Saturday, March 28th. Finally, Weiss Ratings reissued a "hold (c-)" rating on shares of PennantPark Floating Rate Capital in a research report on Monday, December 29th. One investment analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $10.42.

Insider Activity at PennantPark Floating Rate Capital

In other news, Director Jose A. Briones bought 5,895 shares of the company's stock in a transaction on Thursday, February 19th. The shares were purchased at an average price of $8.48 per share, with a total value of $49,989.60. Following the transaction, the director directly owned 342,313 shares in the company, valued at $2,902,814.24. This represents a 1.75% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CFO Richard T. Allorto, Jr. bought 15,000 shares of the company's stock in a transaction on Wednesday, March 11th. The shares were purchased at an average cost of $8.15 per share, for a total transaction of $122,250.00. Following the transaction, the chief financial officer owned 25,000 shares in the company, valued at approximately $203,750. This represents a 150.00% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. 1.00% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of the business. EP Wealth Advisors LLC purchased a new position in PennantPark Floating Rate Capital in the 4th quarter valued at approximately $134,000. XTX Topco Ltd purchased a new position in PennantPark Floating Rate Capital in the 4th quarter valued at approximately $1,675,000. VARCOV Co. purchased a new position in PennantPark Floating Rate Capital in the 4th quarter valued at approximately $928,000. Millennium Management LLC grew its stake in PennantPark Floating Rate Capital by 1.4% in the 4th quarter. Millennium Management LLC now owns 690,051 shares of the company's stock valued at $6,397,000 after buying an additional 9,351 shares in the last quarter. Finally, CastleKnight Management LP purchased a new position in PennantPark Floating Rate Capital in the 4th quarter valued at approximately $733,000. 19.77% of the stock is currently owned by hedge funds and other institutional investors.

PennantPark Floating Rate Capital Stock Performance

Shares of PFLT stock traded down $0.06 during trading hours on Thursday, hitting $8.65. 943,629 shares of the company were exchanged, compared to its average volume of 1,038,621. The firm has a fifty day simple moving average of $8.37 and a 200 day simple moving average of $8.90. The company has a current ratio of 0.15, a quick ratio of 0.15 and a debt-to-equity ratio of 0.92. PennantPark Floating Rate Capital has a 52-week low of $7.68 and a 52-week high of $10.88. The stock has a market capitalization of $857.96 million, a price-to-earnings ratio of 25.43 and a beta of 0.75.

PennantPark Floating Rate Capital (NYSE:PFLT - Get Free Report) last issued its quarterly earnings results on Monday, February 9th. The company reported $0.27 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.30 by ($0.03). PennantPark Floating Rate Capital had a return on equity of 9.72% and a net margin of 13.03%.The company had revenue of $12.72 million for the quarter.

PennantPark Floating Rate Capital Dividend Announcement

The firm also recently disclosed a monthly dividend, which will be paid on Friday, May 1st. Investors of record on Wednesday, April 15th will be paid a $0.1025 dividend. This represents a c) dividend on an annualized basis and a yield of 14.2%. The ex-dividend date is Wednesday, April 15th. PennantPark Floating Rate Capital's payout ratio is currently 361.76%.

About PennantPark Floating Rate Capital

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments.

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