Prospect Capital (NASDAQ:PSEC) Reaches New 12-Month Low - Time to Sell?

Key Points

• Prospect Capital's share price hit a new 52-week low of $3.04 during trading, finishing the session at $3.06.
• Wells Fargo downgraded Prospect Capital's price target from $3.50 to $3.00 and assigned an "underweight" rating, while Wall Street Zen upgraded it from "sell" to "hold."
• The company reported quarterly earnings of $0.19 EPS, surpassing expectations, but its revenue of $170.72 million fell short of the anticipated $174.29 million.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report) hit a new 52-week low during mid-day trading on Thursday . The company traded as low as $3.04 and last traded at $3.06, with a volume of 3583307 shares. The stock had previously closed at $3.19.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on PSEC. Wells Fargo & Company lowered their price target on shares of Prospect Capital from $3.50 to $3.00 and set an "underweight" rating on the stock in a report on Monday, May 12th. Wall Street Zen raised shares of Prospect Capital from a "sell" rating to a "hold" rating in a report on Saturday, April 12th.

Prospect Capital Trading Down 1.2%

The company has a debt-to-equity ratio of 0.62, a current ratio of 0.83 and a quick ratio of 0.83. The firm has a market capitalization of $1.31 billion, a PE ratio of -3.40 and a beta of 0.85. The company's fifty day simple moving average is $3.28 and its 200-day simple moving average is $3.75.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last posted its quarterly earnings data on Thursday, May 8th. The financial services provider reported $0.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.14 by $0.05. The business had revenue of $170.72 million for the quarter, compared to the consensus estimate of $174.29 million. Prospect Capital had a negative net margin of 36.07% and a positive return on equity of 12.43%.

Prospect Capital Dividend Announcement

The business also recently disclosed a dividend, which will be paid on Wednesday, August 20th. Shareholders of record on Wednesday, July 30th will be issued a dividend of $0.045 per share. This represents a yield of 1,588.0%. The ex-dividend date of this dividend is Tuesday, July 29th. Prospect Capital's dividend payout ratio (DPR) is presently -62.79%.

Insider Transactions at Prospect Capital

In related news, CEO John F. Barry acquired 623,300 shares of the firm's stock in a transaction on Friday, June 20th. The shares were acquired at an average cost of $3.19 per share, with a total value of $1,988,327.00. Following the completion of the acquisition, the chief executive officer directly owned 83,266,026 shares in the company, valued at approximately $265,618,622.94. This trade represents a 0.75% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 28.25% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Prospect Capital

A number of hedge funds have recently modified their holdings of PSEC. Trexquant Investment LP acquired a new stake in shares of Prospect Capital in the fourth quarter valued at about $1,429,000. ExodusPoint Capital Management LP acquired a new stake in shares of Prospect Capital in the fourth quarter valued at about $792,000. Envestnet Asset Management Inc. raised its position in shares of Prospect Capital by 4,160.3% in the fourth quarter. Envestnet Asset Management Inc. now owns 946,648 shares of the financial services provider's stock valued at $4,080,000 after buying an additional 924,428 shares during the last quarter. Cerity Partners LLC acquired a new stake in Prospect Capital during the fourth quarter worth about $304,000. Finally, CenterBook Partners LP acquired a new stake in Prospect Capital during the fourth quarter worth about $442,000. 9.06% of the stock is currently owned by institutional investors and hedge funds.

Prospect Capital Company Profile

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions.