Prospect Capital (NASDAQ:PSEC) Stock Passes Above 200-Day Moving Average - Should You Sell?

Key Points

• Stock technical: Prospect Capital's shares crossed above their 200-day moving average (~$2.70), trading around $2.73–$2.74 on Tuesday with about 5.55 million shares changing hands.
• Analyst view: The consensus rating is "Sell" with an average target of $2.50 after recent downgrades (Wall Street Zen cut to Hold; Weiss reiterated Sell).
• Dividend and insider activity: The company declared a monthly dividend of $0.045 per share (≈19.8% yield, ex-dividend Apr 28), and COO M. Grier Eliasek purchased 942,800 shares in February.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report)'s stock price crossed above its two hundred day moving average during trading on Tuesday . The stock has a two hundred day moving average of $2.70 and traded as high as $2.74. Prospect Capital shares last traded at $2.73, with a volume of 5,545,605 shares trading hands.

Analyst Ratings Changes

Several research analysts have issued reports on the company. Wall Street Zen lowered Prospect Capital from a "buy" rating to a "hold" rating in a research report on Saturday, February 14th. Weiss Ratings restated a "sell (d)" rating on shares of Prospect Capital in a research report on Tuesday, April 21st. Two research analysts have rated the stock with a Sell rating, According to data from MarketBeat.com, the company presently has a consensus rating of "Sell" and an average target price of $2.50.

Prospect Capital Stock Down 0.7%

The company's 50 day moving average price is $2.68 and its two-hundred day moving average price is $2.70. The company has a quick ratio of 0.74, a current ratio of 0.74 and a debt-to-equity ratio of 0.62. The stock has a market cap of $1.33 billion, a P/E ratio of -3.37 and a beta of 0.84.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last posted its quarterly earnings results on Monday, February 9th. The financial services provider reported $0.19 earnings per share for the quarter, beating the consensus estimate of $0.10 by $0.09. Prospect Capital had a negative net margin of 39.56% and a positive return on equity of 11.91%. The firm had revenue of $176.00 million during the quarter, compared to the consensus estimate of $156.34 million.

Prospect Capital Dividend Announcement

The business also recently declared a monthly dividend, which will be paid on Tuesday, May 19th. Stockholders of record on Tuesday, April 28th will be paid a dividend of $0.045 per share. This represents a c) annualized dividend and a dividend yield of 19.8%. The ex-dividend date of this dividend is Tuesday, April 28th. Prospect Capital's payout ratio is currently -66.67%.

Insider Buying and Selling at Prospect Capital

In related news, COO M Grier Eliasek purchased 942,800 shares of the firm's stock in a transaction dated Wednesday, February 11th. The stock was purchased at an average price of $2.92 per share, with a total value of $2,752,976.00. Following the completion of the purchase, the chief operating officer owned 3,443,930 shares of the company's stock, valued at approximately $10,056,275.60. The trade was a 37.69% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available at the SEC website. Corporate insiders own 0.03% of the company's stock.

Institutional Trading of Prospect Capital

Several institutional investors and hedge funds have recently modified their holdings of the stock. Van ECK Associates Corp raised its stake in Prospect Capital by 9.2% in the third quarter. Van ECK Associates Corp now owns 10,255,640 shares of the financial services provider's stock worth $28,203,000 after buying an additional 866,860 shares in the last quarter. GraniteShares Advisors LLC bought a new position in Prospect Capital in the fourth quarter worth approximately $2,745,000. GatePass Capital LLC bought a new position in Prospect Capital in the third quarter worth approximately $563,000. Tudor Investment Corp ET AL raised its stake in Prospect Capital by 12.1% in the third quarter. Tudor Investment Corp ET AL now owns 2,604,286 shares of the financial services provider's stock worth $7,162,000 after buying an additional 282,119 shares in the last quarter. Finally, SMH Capital Advisors Inc. raised its stake in Prospect Capital by 201.5% in the third quarter. SMH Capital Advisors Inc. now owns 438,847 shares of the financial services provider's stock worth $1,167,000 after buying an additional 293,311 shares in the last quarter. Institutional investors own 9.06% of the company's stock.

Prospect Capital Company Profile

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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