Short Interest in Oaktree Specialty Lending Corp. (NASDAQ:OCSL) Declines By 16.0%

Key Points

• Short interest fell by 16.0% in March to 2,885,480 shares, equal to 3.3% of the stock and a days-to-cover ratio of 3.5.
• The firm paid a $0.40 quarterly dividend (annualized $1.60), implying a 12.2% yield but with a very high dividend payout ratio of 444.44%.
• Analyst sentiment is largely neutral — six analysts rate OCSL as Hold with a consensus target of $12.17 — while the stock traded up to $13.12 (+3.2%) after reporting Q4 EPS of $0.41 (beat).

Oaktree Specialty Lending Corp. (NASDAQ:OCSL - Get Free Report) saw a large drop in short interest in the month of March. As of March 31st, there was short interest totaling 2,885,480 shares, a drop of 16.0% from the March 15th total of 3,436,257 shares. Based on an average daily volume of 823,003 shares, the days-to-cover ratio is currently 3.5 days. Currently, 3.3% of the shares of the stock are sold short.

Wall Street Analyst Weigh In

Several equities analysts have recently issued reports on the company. Zacks Research upgraded Oaktree Specialty Lending from a "strong sell" rating to a "hold" rating in a research report on Monday, April 6th. JPMorgan Chase & Co. decreased their target price on Oaktree Specialty Lending from $13.50 to $10.50 and set a "neutral" rating on the stock in a report on Friday, March 13th. Weiss Ratings upgraded Oaktree Specialty Lending from a "sell (d+)" rating to a "hold (c-)" rating in a report on Wednesday. Wells Fargo & Company decreased their target price on Oaktree Specialty Lending from $13.00 to $12.00 and set an "equal weight" rating on the stock in a report on Thursday, February 5th. Finally, Wall Street Zen upgraded Oaktree Specialty Lending from a "sell" rating to a "hold" rating in a report on Saturday, April 11th. Six equities research analysts have rated the stock with a Hold rating, According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and a consensus target price of $12.17.

Oaktree Specialty Lending Stock Up 3.2%

Shares of Oaktree Specialty Lending stock traded up $0.41 during midday trading on Friday, hitting $13.12. The company's stock had a trading volume of 2,976,778 shares, compared to its average volume of 1,012,647. The firm has a market capitalization of $1.16 billion, a P/E ratio of 36.45 and a beta of 0.49. The stock has a 50-day simple moving average of $11.65 and a 200-day simple moving average of $12.63. The company has a quick ratio of 0.16, a current ratio of 0.16 and a debt-to-equity ratio of 0.66. Oaktree Specialty Lending has a 1-year low of $10.63 and a 1-year high of $14.90.

Oaktree Specialty Lending (NASDAQ:OCSL - Get Free Report) last issued its earnings results on Tuesday, February 3rd. The credit services provider reported $0.41 EPS for the quarter, topping the consensus estimate of $0.38 by $0.03. The business had revenue of $74.48 million during the quarter, compared to analysts' expectations of $75.72 million. Oaktree Specialty Lending had a return on equity of 9.75% and a net margin of 10.58%.During the same quarter last year, the firm posted $0.54 earnings per share. As a group, sell-side analysts expect that Oaktree Specialty Lending will post 2.06 earnings per share for the current year.

Oaktree Specialty Lending Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Monday, March 16th were given a $0.40 dividend. This represents a $1.60 annualized dividend and a dividend yield of 12.2%. The ex-dividend date of this dividend was Monday, March 16th. Oaktree Specialty Lending's dividend payout ratio (DPR) is 444.44%.

Insider Activity

In other news, Director Phyllis R. Caldwell purchased 2,500 shares of the stock in a transaction dated Monday, March 16th. The shares were bought at an average cost of $10.77 per share, for a total transaction of $26,925.00. Following the transaction, the director owned 23,500 shares in the company, valued at $253,095. This trade represents a 11.90% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Company insiders own 0.29% of the company's stock.

Institutional Trading of Oaktree Specialty Lending

A number of institutional investors have recently bought and sold shares of the company. NewEdge Advisors LLC boosted its position in Oaktree Specialty Lending by 87.7% during the fourth quarter. NewEdge Advisors LLC now owns 27,748 shares of the credit services provider's stock valued at $354,000 after purchasing an additional 12,961 shares during the last quarter. XTX Topco Ltd raised its holdings in Oaktree Specialty Lending by 1,061.2% during the fourth quarter. XTX Topco Ltd now owns 135,868 shares of the credit services provider's stock valued at $1,731,000 after buying an additional 124,167 shares in the last quarter. VARCOV Co. bought a new position in Oaktree Specialty Lending during the fourth quarter valued at about $1,020,000. Toronto Dominion Bank bought a new position in Oaktree Specialty Lending during the fourth quarter valued at about $2,637,000. Finally, Summit Securities Group LLC bought a new position in Oaktree Specialty Lending during the fourth quarter valued at about $4,841,000. Institutional investors and hedge funds own 36.79% of the company's stock.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation NASDAQ: OCSL is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.

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