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

Key Points

• Prospect Capital shares hit a new 52-week low, trading as low as $2.11 and closing near $2.1250, below both its 50-day and 200-day moving averages.
• Analyst sentiment remains negative: Weiss Ratings downgraded the stock to “sell,” Wall Street Zen moved it to “hold,” and the consensus rating is “Sell” with a $2.00 price target.
• The company reported quarterly EPS and revenue above estimates and declared a monthly dividend of $0.035 per share, implying a roughly 19.8% annualized yield; however, its payout ratio is an exceptionally high 840%.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report) reached a new 52-week low during trading on Monday. The company traded as low as $2.11 and last traded at $2.1250, with a volume of 1584450 shares traded. The stock had previously closed at $2.19.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on PSEC shares. Weiss Ratings downgraded shares of Prospect Capital from a "sell (d+)" rating to a "sell (d)" rating in a research note on Wednesday, August 26th. Wall Street Zen lowered Prospect Capital from a "buy" rating to a "hold" rating in a research note on Saturday, August 22nd. Two equities research analysts have rated the stock with a Sell rating, According to MarketBeat.com, the stock has a consensus rating of "Sell" and a consensus target price of $2.00.

Prospect Capital Stock Performance

The company has a debt-to-equity ratio of 0.64, a quick ratio of 0.87 and a current ratio of 0.87. The firm's 50 day moving average is $2.23 and its 200 day moving average is $2.37. The stock has a market cap of $1.13 billion, a P/E ratio of 42.50 and a beta of 0.80.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last announced its quarterly earnings results on Thursday, August 20th. The financial services provider reported $0.15 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.11 by $0.04. The business had revenue of $155.76 million during the quarter, compared to the consensus estimate of $149.80 million. Prospect Capital had a net margin of 19.33% and a return on equity of 12.15%.

Prospect Capital Announces Dividend

The business also recently announced a monthly dividend, which will be paid on Wednesday, November 18th. Stockholders of record on Wednesday, October 28th will be given a dividend of $0.0350 per share. The ex-dividend date of this dividend is Wednesday, October 28th. This represents a $0.42 dividend on an annualized basis and a dividend yield of 19.8%. Prospect Capital's payout ratio is 840.00%.

Insider Activity at Prospect Capital

In other news, CEO John Barry. III purchased 1,217,105 shares of the stock in a transaction that occurred on Friday, September 4th. The shares were purchased at an average cost of $2.24 per share, for a total transaction of $2,726,315.20. Following the completion of the purchase, the chief executive officer directly owned 90,479,988 shares of the company's stock, valued at approximately $202,675,173.12. The trade was a 1.36% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Corporate insiders own 25.94% of the company's stock.

Institutional Trading of Prospect Capital

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

About Prospect Capital

Prospect Capital Corporation NASDAQ: PSEC is a business development company that provides financing to middle-market businesses. The company primarily invests in privately held companies through first-lien and second-lien secured loans, unsecured debt, mezzanine financing and equity investments.

Prospect Capital generally works with companies across a range of industries and seeks to provide customized capital solutions for acquisitions, recapitalizations, refinancings, growth initiatives and other corporate purposes.

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