Prospect Capital Co. (PSEC) PT Lowered to $4.00
Prospect Capital Co. (NASDAQ:PSEC) had its price target dropped by equities research analysts at National Securities from $5.00 to $4.00 in a research report issued on Tuesday. The brokerage currently has a “sell” rating on the financial services provider’s stock. National Securities’ price objective indicates a potential downside of 37.30% from the stock’s previous close.
The analysts wrote, “• PSEC posted NII/share of $0.18/share, matching the newly reduced quarterly dividend and exceeding our estimate of $0.17. Other income was up 97% linked Q/Q and was the primary reason for the company exceeding our estimate.
• We continue to think that accounting is aggressive at Prospect on a number of different issues, including CLO Equity, First Tower, Interdent, and Atlantis for a myriad of reasons. The company appears to be marking CLO equity based upon intrinsic value instead of where it can be sold at, in our opinion. First Tower, which had faced serious issues by the Missouri State Department of Insurance, Financial Institutions, and Professional Registrations, is marked as having an unrealized gain. Interdent was supposed to be maturing August of 2017 but instead had its maturity pushed back to December, and we would not be surprised to see this company be placed on non-accrual status. Atlantis Healthcare Group operates dialysis services throughout Puerto Rico and despite the massive blackouts and shortages of medical care across the island, the position continues to be carried at cost.
• With such a challenging loan market and the company stating on the call that they could reduce leverage if needed by withholding originations, we are puzzled as to why the company was not massively repurchasing shares and withholding originations to keep balance sheet leverage in check. We think this communicates to the market that Prospect doesn’t care about shareholders or doesn’t understand basic capital management, neither of which would shock us.
• We are revising our fiscal 2018 NII/share estimate to $0.71 from $0.72 and are our fiscal 2019 NII/share estimate to $0.66 from $0.73. “
Other equities research analysts have also recently issued reports about the company. TheStreet cut Prospect Capital from a “b-” rating to a “c+” rating in a research note on Wednesday, September 27th. Zacks Investment Research upgraded Prospect Capital from a “strong sell” rating to a “hold” rating in a research note on Wednesday, November 1st. BidaskClub cut Prospect Capital from a “buy” rating to a “hold” rating in a research note on Monday, July 17th. Raymond James Financial, Inc. upgraded Prospect Capital from an “underperform” rating to a “market perform” rating in a research note on Wednesday, August 30th. Finally, UBS AG upgraded Prospect Capital from an “underperform” rating to a “market perform” rating in a research note on Wednesday, August 30th. Three research analysts have rated the stock with a sell rating and four have assigned a hold rating to the company’s stock. The company currently has a consensus rating of “Hold” and a consensus price target of $6.17.
Shares of Prospect Capital (NASDAQ PSEC) opened at $6.38 on Tuesday. The company has a debt-to-equity ratio of 0.78, a quick ratio of 2.63 and a current ratio of 2.63. Prospect Capital has a 12 month low of $5.51 and a 12 month high of $9.58. The firm has a market capitalization of $2,350.00, a price-to-earnings ratio of 7.43 and a beta of 0.51.
Prospect Capital (NASDAQ:PSEC) last released its earnings results on Wednesday, November 8th. The financial services provider reported $0.18 earnings per share for the quarter, missing the consensus estimate of $0.19 by ($0.01). Prospect Capital had a return on equity of 1.45% and a net margin of 7.55%. The business had revenue of $158.58 million for the quarter, compared to the consensus estimate of $161.00 million. During the same quarter in the previous year, the company earned $0.22 earnings per share. The firm’s revenue for the quarter was down 11.8% on a year-over-year basis. equities analysts anticipate that Prospect Capital will post 0.72 EPS for the current fiscal year.
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In other news, CFO Brian H. Oswald purchased 50,000 shares of the company’s stock in a transaction dated Friday, September 1st. The stock was bought at an average cost of $6.73 per share, for a total transaction of $336,500.00. Following the purchase, the chief financial officer now owns 493,373 shares of the company’s stock, valued at $3,320,400.29. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, insider M Grier Eliasek purchased 65,000 shares of the company’s stock in a transaction dated Monday, November 13th. The stock was purchased at an average price of $5.96 per share, with a total value of $387,400.00. The disclosure for this purchase can be found here. Insiders bought a total of 216,000 shares of company stock valued at $1,299,150 over the last quarter. 7.10% of the stock is owned by corporate insiders.
Several institutional investors and hedge funds have recently made changes to their positions in the company. California Public Employees Retirement System lifted its stake in shares of Prospect Capital by 5.4% in the 3rd quarter. California Public Employees Retirement System now owns 808,100 shares of the financial services provider’s stock valued at $5,430,000 after acquiring an additional 41,100 shares during the last quarter. Janney Montgomery Scott LLC lifted its stake in shares of Prospect Capital by 86.9% in the 3rd quarter. Janney Montgomery Scott LLC now owns 87,689 shares of the financial services provider’s stock valued at $589,000 after acquiring an additional 40,765 shares during the last quarter. Jane Street Group LLC bought a new position in shares of Prospect Capital in the 3rd quarter valued at $127,000. Penn Mutual Life Insurance Co acquired a new stake in Prospect Capital in the third quarter valued at $3,992,000. Finally, Cowen Inc. increased its holdings in Prospect Capital by 200.0% in the third quarter. Cowen Inc. now owns 248,000 shares of the financial services provider’s stock valued at $1,667,000 after purchasing an additional 496,000 shares during the period. Institutional investors own 15.07% of the company’s stock.
Prospect Capital Company Profile
Prospect Capital Corporation is a financial services company. The Company primarily lends to and invests in middle market privately held companies. The Company is a closed-end investment company. Its investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
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