Stellus Capital Investment Corporation (NYSE:SCM) Sees Large Increase in Short Interest

Key Points

• Stellus Capital Investment Corporation's short interest jumped by 34.8% in August, with a total of 730,600 shares shorted as of August 15th.
• Wall Street analysts upgraded Stellus Capital from a "sell" to a "hold" rating, maintaining a consensus target price of $13.00.
• The company declared a monthly dividend of $0.1333 per share, resulting in an annualized dividend yield of 10.6%.

Stellus Capital Investment Corporation (NYSE:SCM - Get Free Report) saw a significant increase in short interest during the month of August. As of August 15th, there was short interest totaling 730,600 shares, an increase of 34.8% from the July 31st total of 542,000 shares. Based on an average trading volume of 143,400 shares, the days-to-cover ratio is presently 5.1 days. Based on an average trading volume of 143,400 shares, the days-to-cover ratio is presently 5.1 days.

Wall Street Analyst Weigh In

Separately, Wall Street Zen raised Stellus Capital Investment from a "sell" rating to a "hold" rating in a report on Saturday, August 9th. One investment analyst has rated the stock with a Hold rating, According to MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $13.00.

Stellus Capital Investment Trading Down 0.4%

SCM stock traded down $0.06 during trading on Friday, reaching $14.15. 200,132 shares of the stock traded hands, compared to its average volume of 148,998. The business's 50 day moving average price is $14.60 and its 200-day moving average price is $13.89. Stellus Capital Investment has a 52-week low of $11.19 and a 52-week high of $15.56. The company has a debt-to-equity ratio of 1.27, a current ratio of 0.28 and a quick ratio of 0.28. The firm has a market capitalization of $402.09 million, a PE ratio of 9.76 and a beta of 0.87.

Stellus Capital Investment (NYSE:SCM - Get Free Report) last posted its quarterly earnings results on Wednesday, August 6th. The investment management company reported $0.35 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.35. Stellus Capital Investment had a return on equity of 11.06% and a net margin of 38.24%.The firm had revenue of $25.70 million during the quarter, compared to the consensus estimate of $26.15 million. As a group, sell-side analysts forecast that Stellus Capital Investment will post 1.74 earnings per share for the current year.

Stellus Capital Investment Announces Dividend

The company also recently declared a monthly dividend, which will be paid on Monday, September 15th. Shareholders of record on Friday, August 29th will be given a dividend of $0.1333 per share. This represents a c) dividend on an annualized basis and a yield of 11.3%. The ex-dividend date of this dividend is Friday, August 29th. Stellus Capital Investment's payout ratio is 110.34%.

Institutional Investors Weigh In On Stellus Capital Investment

Institutional investors and hedge funds have recently modified their holdings of the stock. Geneos Wealth Management Inc. purchased a new stake in shares of Stellus Capital Investment in the second quarter worth about $25,000. Ameritas Advisory Services LLC purchased a new stake in shares of Stellus Capital Investment in the second quarter worth about $34,000. BNP Paribas Financial Markets purchased a new stake in shares of Stellus Capital Investment in the second quarter worth about $60,000. Chilton Capital Management LLC boosted its position in shares of Stellus Capital Investment by 10.6% in the first quarter. Chilton Capital Management LLC now owns 8,409 shares of the investment management company's stock worth $118,000 after buying an additional 809 shares during the period. Finally, XTX Topco Ltd purchased a new stake in shares of Stellus Capital Investment in the first quarter worth about $150,000. Hedge funds and other institutional investors own 13.22% of the company's stock.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada.