Prospect Capital (NASDAQ:PSEC) Hits New 52-Week Low - Here's Why

Key Points

• Prospect Capital fell to a new 52-week low of $1.41, down from its previous close of $1.55.
• Analyst sentiment is mostly negative: MarketBeat reports a consensus Sell rating from one Hold and two Sell ratings, with an average price target of $2.00.
• The company beat quarterly earnings and revenue estimates, and announced a monthly dividend with a stated 29.2% yield; its payout ratio is 840%.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report)'s stock price reached a new 52-week low during mid-day trading on Wednesday. The stock traded as low as $1.41 and last traded at $1.4150, with a volume of 12,736,528 shares traded. The stock had previously closed at $1.55.

Analysts Set New Price Targets

Several equities analysts have commented on PSEC shares. Weiss Ratings cut Prospect Capital from a "sell (d+)" rating to a "sell (d)" rating in a report on Wednesday, August 26th. Zacks Research upgraded Prospect Capital to a "hold" rating in a research report on Monday, October 5th. Finally, Wall Street Zen lowered Prospect Capital from a "buy" rating to a "hold" rating in a research note on Saturday, August 22nd. One investment analyst has rated the stock with a Hold rating and two have assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company currently has a consensus rating of "Sell" and an average target price of $2.00.

Prospect Capital Price Performance

The company has a debt-to-equity ratio of 0.64, a current ratio of 0.87 and a quick ratio of 0.87. The firm has a market capitalization of $768.70 million, a P/E ratio of 28.80 and a beta of 0.84. The company's 50 day moving average price is $1.94 and its 200 day moving average price is $2.36.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last posted its quarterly earnings data on Thursday, August 20th. The financial services provider reported $0.15 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.11 by $0.04. The firm had revenue of $155.76 million for the quarter, compared to the consensus estimate of $149.80 million. Prospect Capital had a return on equity of 12.15% and a net margin of 19.33%. As a group, sell-side analysts anticipate that Prospect Capital Corporation will post 0.38 EPS for the current fiscal year.

Prospect Capital Dividend Announcement

The company also recently disclosed a monthly dividend, which will be paid on Wednesday, November 18th. Shareholders of record on Wednesday, October 28th will be issued a dividend of $0.0350 per share. This represents a $0.42 annualized dividend and a yield of 29.2%. The ex-dividend date of this dividend is Wednesday, October 28th. Prospect Capital's payout ratio is currently 840.00%.

Insider Transactions at Prospect Capital

In other Prospect Capital news, CEO John Barry. III purchased 1,217,105 shares of the company's stock in a transaction that occurred on Friday, September 4th. The stock was acquired at an average cost of $2.24 per share, with a total value of $2,726,315.20. Following the completion of the purchase, the chief executive officer directly owned 90,479,988 shares in the company, valued at approximately $202,675,173.12. This represents a 1.36% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Insiders own 25.94% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in PSEC. Independent Financial Group LLC acquired a new stake in Prospect Capital during the 1st quarter valued at approximately $8,644,000. Legal & General Group Plc acquired a new stake in Prospect Capital in the 2nd quarter valued at $9,336,000. Private Management Group Inc. increased its stake in Prospect Capital by 51.7% during the 2nd quarter. Private Management Group Inc. now owns 20,534,804 shares of the financial services provider's stock valued at $47,435,000 after purchasing an additional 6,999,513 shares in the last quarter. Van ECK Associates Corp raised its holdings in Prospect Capital by 32.7% during the second quarter. Van ECK Associates Corp now owns 9,685,724 shares of the financial services provider's stock worth $22,374,000 after buying an additional 2,388,990 shares during the last quarter. Finally, Concorde Asset Management LLC acquired a new position in shares of Prospect Capital during the second quarter valued at about $838,000. Institutional investors and hedge funds own 9.06% of the company's stock.

Prospect Capital Company Profile

Prospect Capital Corporation NASDAQ: PSEC is a business development company that provides financing and investment capital to middle-market companies. The company primarily invests in privately held businesses through first-lien and second-lien loans, mezzanine debt, and other debt securities, while also making equity and equity-related investments in selected companies.

Prospect Capital invests across a range of industries and has additional exposure to areas such as real estate, structured credit, and financial services.

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