Prospect Capital (NASDAQ:PSEC) Hits New 52-Week 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)'s share price reached a new 52-week low during mid-day trading on Wednesday . The stock traded as low as $2.80 and last traded at $2.90, with a volume of 8385178 shares. The stock had previously closed at $2.91.

Analyst Ratings Changes

Several brokerages have weighed in 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 upgraded shares of Prospect Capital from a "sell" rating to a "hold" rating in a research report on Saturday, April 12th.

Prospect Capital Stock Up 1.4%

The firm has a market capitalization of $1.25 billion, a PE ratio of -3.26 and a beta of 0.85. 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 company has a 50-day moving average price of $3.23 and a 200 day moving average price of $3.71.

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

Prospect Capital Announces Dividend

The business also recently announced a dividend, which will be paid on Wednesday, August 20th. Investors of record on Wednesday, July 30th will be paid 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 purchased 319,000 shares of the firm's stock in a transaction on Monday, June 23rd. The shares were acquired at an average price of $3.16 per share, for a total transaction of $1,008,040.00. Following the purchase, the chief executive officer directly owned 83,585,026 shares in the company, valued at $264,128,682.16. This trade represents a 0.38% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Corporate insiders own 28.25% of the company's stock.

Institutional Investors Weigh In On Prospect Capital

A number of hedge funds have recently made changes to their positions in the company. Cetera Investment Advisers grew its stake in shares of Prospect Capital by 1.9% in the 2nd quarter. Cetera Investment Advisers now owns 262,719 shares of the financial services provider's stock worth $835,000 after buying an additional 4,978 shares in the last quarter. Creative Planning lifted its holdings in shares of Prospect Capital by 15.0% in the 2nd quarter. Creative Planning now owns 188,464 shares of the financial services provider's stock valued at $599,000 after acquiring an additional 24,539 shares during the last quarter. Foundations Investment Advisors LLC bought a new position in shares of Prospect Capital in the 2nd quarter valued at about $38,000. Allworth Financial LP grew its position in Prospect Capital by 1,485.5% in the second quarter. Allworth Financial LP now owns 28,348 shares of the financial services provider's stock worth $90,000 after acquiring an additional 26,560 shares in the last quarter. Finally, Kovack Advisors Inc. increased its stake in Prospect Capital by 146.5% during the second quarter. Kovack Advisors Inc. now owns 345,080 shares of the financial services provider's stock worth $1,097,000 after acquiring an additional 205,108 shares during the last quarter. 9.06% of the stock is currently owned by hedge funds and other institutional investors.

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.