Stellus Capital Investment (NYSE:SCM) Downgraded to Strong Sell Rating by Zacks Research

Key Points

• Zacks Research downgraded Stellus Capital Investment (NYSE:SCM) from a "hold" to a "strong sell," while MarketBeat shows a consensus rating of "Reduce" and a consensus target price of $9.00.
• Stellus missed quarterly estimates with $0.29 EPS vs. $0.31 expected and $23.98M in revenue vs. $26.33M expected; the stock opened at $10.04, has a market cap of ~$290.5M and a P/E of 10.68.
• Insiders are buying: CEO Robert T. Ladd purchased 35,000 shares at $8.70 and the CFO bought 5,700 at $8.79, contributing to 87,890 insider-acquired shares over 90 days and insiders owning 3.99% of the stock.

Stellus Capital Investment (NYSE:SCM - Get Free Report) was downgraded by equities researchers at Zacks Research from a "hold" rating to a "strong sell" rating in a research report issued to clients and investors on Thursday,Zacks.com reports.

A number of other equities analysts also recently issued reports on SCM. Weiss Ratings reiterated a "hold (c)" rating on shares of Stellus Capital Investment in a research report on Monday, December 29th. Keefe, Bruyette & Woods lowered their price target on Stellus Capital Investment from $13.00 to $9.00 and set a "market perform" rating on the stock in a research report on Monday, March 16th. Two equities research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Reduce" and a consensus target price of $9.00.

Stellus Capital Investment Stock Up 2.2%

Stellus Capital Investment stock opened at $10.04 on Thursday. The firm has a market cap of $290.51 million, a price-to-earnings ratio of 10.68 and a beta of 0.67. Stellus Capital Investment has a 52 week low of $8.43 and a 52 week high of $15.39. The business's 50-day moving average price is $9.89 and its 200 day moving average price is $11.56. The company has a quick ratio of 0.14, a current ratio of 0.14 and a debt-to-equity ratio of 1.13.

Stellus Capital Investment (NYSE:SCM - Get Free Report) last posted its earnings results on Wednesday, March 11th. The investment management company reported $0.29 EPS for the quarter, missing the consensus estimate of $0.31 by ($0.02). The company had revenue of $23.98 million for the quarter, compared to analyst estimates of $26.33 million. Stellus Capital Investment had a return on equity of 10.28% and a net margin of 26.48%. As a group, sell-side analysts anticipate that Stellus Capital Investment will post 1.74 earnings per share for the current year.

Insiders Place Their Bets

In other Stellus Capital Investment news, CEO Robert T. Ladd purchased 35,000 shares of the stock in a transaction on Friday, March 13th. The shares were bought at an average price of $8.70 per share, for a total transaction of $304,500.00. Following the completion of the transaction, the chief executive officer owned 667,935 shares of the company's stock, valued at $5,811,034.50. This trade represents a 5.53% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through this link. Also, CFO W. Todd Huskinson purchased 5,700 shares of the stock in a transaction on Friday, March 13th. The shares were acquired at an average price of $8.79 per share, for a total transaction of $50,103.00. Following the transaction, the chief financial officer directly owned 54,297 shares of the company's stock, valued at $477,270.63. This represents a 11.73% increase in their position. The SEC filing for this purchase provides additional information. Over the last 90 days, insiders have acquired 87,890 shares of company stock worth $766,551. 3.99% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Stellus Capital Investment

Several hedge funds and other institutional investors have recently made changes to their positions in SCM. Royal Bank of Canada lifted its position in shares of Stellus Capital Investment by 15.8% in the first quarter. Royal Bank of Canada now owns 27,882 shares of the investment management company's stock valued at $390,000 after acquiring an additional 3,808 shares in the last quarter. Jane Street Group LLC purchased a new position in shares of Stellus Capital Investment in the first quarter valued at approximately $157,000. Brevan Howard Capital Management LP purchased a new position in shares of Stellus Capital Investment in the second quarter valued at approximately $154,000. BNP Paribas Financial Markets purchased a new position in shares of Stellus Capital Investment in the second quarter valued at approximately $60,000. Finally, Group One Trading LLC lifted its position in shares of Stellus Capital Investment by 112.3% in the second quarter. Group One Trading LLC now owns 11,401 shares of the investment management company's stock valued at $159,000 after acquiring an additional 6,030 shares in the last quarter. Hedge funds and other institutional investors own 13.22% of the company's stock.

Stellus Capital Investment Company Profile

Stellus Capital Investment Corporation NYSE: SCM is a closed-end, externally managed business development company that provides debt and equity financing to middle market companies in the United States. As an investment vehicle specializing in private credit, Stellus focuses on originating and structuring senior secured loans, unitranche facilities, mezzanine debt, and equity co-investments tailored to the unique needs of growing businesses. Its flexible capital solutions are designed to support acquisitions, recapitalizations, growth initiatives, and balance sheet refinancings.

Operating under an evergreen structure, Stellus Capital Investment partners with a diverse group of portfolio companies across industries such as manufacturing, healthcare, business services, and specialty finance.

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