Prospect Capital (NASDAQ:PSEC) Hits New 1-Year Low - Here's Why

Key Points

• Prospect Capital (PSEC) hit a new 52-week low Monday, trading as low as $2.45 and last at $2.5050, with a consensus target of $2.50 and an average analyst rating of Sell.
• The company declared a monthly dividend of $0.045 (ex-dividend Jan. 28), implying a very high yield of 21.7%, though the reported payout ratio is -62.79%.
• Recent results were mixed: quarterly EPS beat estimates ($0.17 vs. $0.11) but revenue missed significantly ($119.4M vs. $169.5M), and the company shows a negative net margin (-42.5%) and a negative P/E (-2.89).

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report)'s stock price hit a new 52-week low during mid-day trading on Monday . The stock traded as low as $2.45 and last traded at $2.5050, with a volume of 1378388 shares changing hands. The stock had previously closed at $2.51.

Wall Street Analyst Weigh In

Several analysts have issued reports on the company. Wall Street Zen upgraded Prospect Capital from a "hold" rating to a "buy" rating in a research note on Saturday, December 6th. Weiss Ratings reissued a "sell (d)" rating on shares of Prospect Capital in a report on Wednesday, October 8th. Two analysts have rated the stock with a Sell rating, According to MarketBeat.com, the company has an average rating of "Sell" and a consensus target price of $2.50.

Prospect Capital Stock Performance

The company has a debt-to-equity ratio of 0.64, a current ratio of 1.22 and a quick ratio of 1.22. The stock's 50-day moving average price is $2.65 and its 200-day moving average price is $2.87. The company has a market cap of $1.17 billion, a P/E ratio of -2.89 and a beta of 0.85.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last issued its quarterly earnings data on Thursday, November 6th. The financial services provider reported $0.17 earnings per share for the quarter, topping the consensus estimate of $0.11 by $0.06. Prospect Capital had a negative net margin of 42.50% and a positive return on equity of 12.29%. The business had revenue of $119.44 million during the quarter, compared to analysts' expectations of $169.53 million.

Prospect Capital Dividend Announcement

The business also recently announced a monthly dividend, which will be paid on Wednesday, February 18th. Stockholders of record on Wednesday, January 28th will be given a dividend of $0.045 per share. This represents a c) dividend on an annualized basis and a dividend yield of 21.7%. The ex-dividend date is Wednesday, January 28th. Prospect Capital's dividend payout ratio is presently -62.79%.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of the stock. Navalign LLC bought a new stake in Prospect Capital during the third quarter worth about $28,000. American National Bank & Trust bought a new stake in shares of Prospect Capital during the 2nd quarter worth approximately $32,000. A4 Wealth Advisors LLC acquired a new stake in shares of Prospect Capital during the 3rd quarter worth approximately $34,000. Significant Wealth Partners LLC bought a new position in Prospect Capital in the second quarter valued at approximately $36,000. Finally, Private Trust Co. NA increased its stake in Prospect Capital by 38.5% in the second quarter. Private Trust Co. NA now owns 11,639 shares of the financial services provider's stock valued at $37,000 after acquiring an additional 3,238 shares during the last quarter. Institutional investors own 9.06% of the company's stock.

About Prospect Capital

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.

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