Prospect Capital (NASDAQ:PSEC) Hits New 1-Year Low - Time to Sell?

Key Points

• Prospect Capital's share price recently plummeted to a new 1-year low, trading as low as $2.80 during mid-day trading on Wednesday, and closing at $2.90.
• Wall Street analysts have shown mixed sentiments, with Wells Fargo downgrading its price target from $3.50 to $3.00, while Wall Street Zen upgraded it from a "sell" rating to a "hold."
• The company announced a dividend yield of 1,588.0%, set to be paid on August 20th, despite having a negative payout ratio of -62.79%.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report) reached a new 52-week low during trading on Wednesday . The stock traded as low as $2.80 and last traded at $2.90, with a volume of 8385178 shares trading hands. The stock had previously closed at $2.91.

Analyst Upgrades and Downgrades

Several research firms have recently commented on PSEC. Wells Fargo & Company lowered their price objective on shares of Prospect Capital from $3.50 to $3.00 and set an "underweight" rating for the company in a research note on Monday, May 12th. Wall Street Zen raised shares of Prospect Capital from a "sell" rating to a "hold" rating in a research note on Saturday, April 12th.

Prospect Capital Trading Up 1.4%

The company's 50 day moving average price is $3.23 and its 200 day moving average price is $3.70. 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 cap of $1.25 billion, a PE ratio of -3.26 and a beta of 0.85.

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

Prospect Capital Dividend Announcement

The company also recently declared a dividend, which will be paid on Wednesday, August 20th. Investors of record on Wednesday, July 30th will be paid a $0.045 dividend. The ex-dividend date is Tuesday, July 29th. This represents a yield of 1,588.0%. Prospect Capital's payout ratio is currently -62.79%.

Insider Transactions at Prospect Capital

In other news, CEO John F. Barry purchased 623,300 shares of the firm's stock in a transaction that occurred on Friday, June 20th. The stock was bought at an average price of $3.19 per share, for a total transaction of $1,988,327.00. Following the completion of the purchase, the chief executive officer directly owned 83,266,026 shares of the company's stock, valued at $265,618,622.94. The trade was a 0.75% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. 28.25% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in PSEC. Kingstone Capital Partners Texas LLC purchased a new stake in shares of Prospect Capital during the 2nd quarter worth approximately $75,680,000. Balyasny Asset Management L.P. lifted its position in shares of Prospect Capital by 6,177.6% during the 4th quarter. Balyasny Asset Management L.P. now owns 2,478,914 shares of the financial services provider's stock worth $10,684,000 after buying an additional 2,439,426 shares during the last quarter. Thomas J. Herzfeld Advisors Inc. lifted its position in shares of Prospect Capital by 26.6% during the 1st quarter. Thomas J. Herzfeld Advisors Inc. now owns 2,315,582 shares of the financial services provider's stock worth $9,494,000 after buying an additional 487,171 shares during the last quarter. Envestnet Asset Management Inc. lifted its position in shares of Prospect Capital by 24.8% during the 1st quarter. Envestnet Asset Management Inc. now owns 1,181,787 shares of the financial services provider's stock worth $4,845,000 after buying an additional 235,139 shares during the last quarter. Finally, Trexquant Investment LP lifted its position in shares of Prospect Capital by 176.1% during the 1st quarter. Trexquant Investment LP now owns 915,452 shares of the financial services provider's stock worth $3,753,000 after buying an additional 583,844 shares during the last quarter. Hedge funds and other institutional investors own 9.06% of the company's stock.

About Prospect Capital

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.