A number of research firms have changed their ratings and price targets for FS Investment Corporation (NYSE: FSIC):

  • 8/14/2017 – FS Investment Corporation had its “neutral” rating reaffirmed by analysts at National Securities. They now have a $10.00 price target on the stock. They wrote, “• For 2Q17, FSIC had adjusted NII/share of $0.19 versus our estimate of $0.20 with the quarterly dividend at a rate of $0.22275/share currently. The dividend was reduced to $0.19/share for 4Q17. We had previously modeled a cut to $0.19/share in 2Q18. Beginning in 4Q17 and lasting four quarters, FSIC’s external manager will waive 25 bps of the base fee.

    • While the fee waiver is good and we are happy to see the company come to terms with reality and cut the dividend, there are a few things that disappoint us with FSIC. The dividend should have been cut a while back, given the company’s increased first lien focus, general spread compression, and the fact that the dividend was only being earned with outsized prepayment fee income. The dividend should be set at a level where it can be earned with minimal to no nonrecurring fee income. With over $16 billion in AUM across the platform, we are baffled as to why FSIC won’t just follow the rest of the industry and cut the base fee to 150 bps of gross assets permanently. The company could easily cut the base fee to even 125 bps permanently and not at all impair the platform’s ability to operate as it currently does while boosting the earnings power of FSIC significantly. Lastly, with FSIC already operates in the upper middle market (UMM) can easily establish a JV to use increased leverage on lower yielding assets in the JV structure, boosting earnings significantly.

    • We are revising our 2017 adjusted NII/share estimate to $0.82 from $0.84 and our 2018 NII/share estimate to $0.85 from $0.86.”
  • 8/8/2017 – FS Investment Corporation was downgraded by analysts at BidaskClub from a “sell” rating to a “strong sell” rating.
  • 8/3/2017 – FS Investment Corporation was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “FS Investment Corporation is a business development company. It primarily originates and invests in senior secured loans and other securities of private U.S. companies, with the investment objective of generating current income and, to a lesser extent, long-term capital appreciation. FS Investment Corporation is based in United States. “
  • 8/2/2017 – FS Investment Corporation was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $10.00 price target on the stock. According to Zacks, “FS Investment Corporation is a business development company. It primarily originates and invests in senior secured loans and other securities of private U.S. companies, with the investment objective of generating current income and, to a lesser extent, long-term capital appreciation. FS Investment Corporation is based in United States. “
  • 7/25/2017 – FS Investment Corporation had its “hold” rating reaffirmed by analysts at Keefe, Bruyette & Woods. They now have a $10.00 price target on the stock.
  • 7/18/2017 – FS Investment Corporation was upgraded by analysts at Zacks Investment Research from a “sell” rating to a “hold” rating. According to Zacks, “FS Investment Corporation is a business development company. It primarily originates and invests in senior secured loans and other securities of private U.S. companies, with the investment objective of generating current income and, to a lesser extent, long-term capital appreciation. FS Investment Corporation is based in United States. “
  • 7/17/2017 – FS Investment Corporation was downgraded by analysts at BidaskClub from a “hold” rating to a “sell” rating.
  • 7/12/2017 – FS Investment Corporation was downgraded by analysts at Zacks Investment Research from a “hold” rating to a “sell” rating. According to Zacks, “FS Investment Corporation is a business development company. It primarily originates and invests in senior secured loans and other securities of private U.S. companies, with the investment objective of generating current income and, to a lesser extent, long-term capital appreciation. FS Investment Corporation is based in United States. “
  • 6/28/2017 – FS Investment Corporation was upgraded by analysts at BidaskClub from a “sell” rating to a “hold” rating.

Shares of FS Investment Corporation (FSIC) traded up 0.301% during mid-day trading on Tuesday, hitting $8.325. The stock had a trading volume of 210,138 shares. FS Investment Corporation has a one year low of $8.20 and a one year high of $10.80. The firm has a 50 day moving average of $8.91 and a 200-day moving average of $9.50.

FS Investment Corporation (NYSE:FSIC) last issued its quarterly earnings results on Wednesday, August 9th. The financial services provider reported $0.19 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.20 by $0.01. FS Investment Corporation had a return on equity of 8.92% and a net margin of 59.88%. The firm had revenue of $98.70 million during the quarter, compared to analyst estimates of $103.14 million. Equities analysts predict that FS Investment Corporation will post $0.74 earnings per share for the current year.

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, October 3rd. Investors of record on Wednesday, September 20th will be given a dividend of $0.2228 per share. The ex-dividend date of this dividend is Tuesday, September 19th. This represents a $0.89 dividend on an annualized basis and a yield of 10.73%. FS Investment Corporation’s payout ratio is 87.26%.

In related news, Director David J. Adelman acquired 11,160 shares of FS Investment Corporation stock in a transaction that occurred on Thursday, June 22nd. The shares were purchased at an average price of $8.88 per share, for a total transaction of $99,100.80. Following the completion of the transaction, the director now owns 34,063 shares in the company, valued at approximately $302,479.44. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CEO Michael C. Forman acquired 22,320 shares of FS Investment Corporation stock in a transaction that occurred on Thursday, June 22nd. The shares were bought at an average price of $8.88 per share, for a total transaction of $198,201.60. The disclosure for this purchase can be found here. In the last quarter, insiders have purchased 56,855 shares of company stock worth $494,554. 1.00% of the stock is currently owned by company insiders.

FS Investment Corporation is an externally managed, non-diversified, closed-end management investment company. The Company’s investment objectives are to generate current income and long-term capital appreciation. Its portfolio consists primarily of investments in senior secured loans and second lien secured loans of the private United States middle market companies and subordinated loans of the private United States companies.

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