Prospect Capital (NASDAQ:PSEC) Reaches New 52-Week Low – Should You Sell?

Prospect Capital Corporation (NASDAQ:PSEC)’s stock price reached a new 52-week low on Wednesday. The company traded as low as $1.41 and last traded at $1.4150, with a volume of 12,736,528 shares changing hands. The stock had previously closed at $1.55.

Trending Headlines about Prospect Capital

Here are the key news stories impacting Prospect Capital this week:

• Positive Sentiment: Prospect authorized up to $200 million in share repurchases, which could support per-share value if the company buys back stock. Management also cited strong credit metrics. Earnings call highlights
• Positive Sentiment: Quarterly earnings were $0.15 per share, topping the $0.10 consensus estimate. The company also maintained its monthly dividend at $0.035 per share. Quarterly results and repurchase announcement
• Neutral Sentiment: The dividend equates to $0.42 annually and a reported yield of about 30%. That high yield may appeal to income investors, but it also warrants attention to the company’s ability to sustain distributions.
• Negative Sentiment: Wells Fargo cut its price target from $2.00 to $1.50 and assigned an Underweight rating, signaling a bearish view despite the target remaining slightly above the cited share price. Wells Fargo rating information
• Negative Sentiment: Revenue of $151.74 million fell short of the $163.14 million consensus. Net investment income also declined year over year, to $76.4 million from $79.4 million, and per-share NII slipped to $0.15 from $0.17—potential concerns for earnings momentum and dividend coverage.

Wall Street Analyst Weigh In

A number of research firms have recently weighed in on PSEC. Weiss Ratings lowered shares of Prospect Capital from a “sell (d+)” rating to a “sell (d)” rating in a research note on Wednesday, August 26th. Wells Fargo & Company cut their target price on shares of Prospect Capital from $2.00 to $1.50 and set an “underweight” rating for the company in a report on Friday. Zacks Research upgraded Prospect Capital to a “hold” rating in a research report on Monday, October 5th. Finally, Wall Street Zen cut Prospect Capital from a “buy” rating to a “hold” rating in a report on Saturday, August 22nd. One research analyst has rated the stock with a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of “Sell” and an average target price of $1.50.

Prospect Capital Stock Performance

The stock has a 50-day simple moving average of $1.91 and a 200 day simple moving average of $2.34. The company has a debt-to-equity ratio of 0.64, a current ratio of 0.87 and a quick ratio of 0.87. The company has a market capitalization of $752.69 million, a PE ratio of -9.40 and a beta of 0.84.

Prospect Capital (NASDAQ:PSEC) last posted its quarterly earnings results on Wednesday, November 4th. The financial services provider reported $0.15 EPS for the quarter, topping the consensus estimate of $0.10 by $0.05. Prospect Capital had a net margin of 3.80% and a return on equity of 13.19%. The company had revenue of $151.74 million for the quarter, compared to the consensus estimate of $163.14 million. Equities analysts anticipate that Prospect Capital Corporation will post 0.38 EPS for the current fiscal year.

Prospect Capital Dividend Announcement

The firm also recently declared a monthly dividend, which will be paid on Wednesday, February 17th. Investors of record on Wednesday, January 27th will be issued a $0.0350 dividend. The ex-dividend date of this dividend is Wednesday, January 27th. This represents a $0.42 dividend on an annualized basis and a yield of 29.8%. Prospect Capital’s dividend payout ratio is presently -280.00%.

Insider Transactions at Prospect Capital

In other Prospect Capital news, CEO John Barry. III bought 1,217,105 shares of the company’s stock in a transaction dated Friday, September 4th. The stock was acquired at an average price of $2.24 per share, with a total value of $2,726,315.20. Following the completion of the acquisition, the chief executive officer directly owned 90,479,988 shares of the company’s stock, valued at $202,675,173.12. This represents a 1.36% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Insiders own 25.94% of the company’s stock.

Hedge Funds Weigh In On Prospect Capital

Several hedge funds and other institutional investors have recently made changes to their positions in PSEC. Lido Advisors LLC raised its holdings in Prospect Capital by 46.0% during the third quarter. Lido Advisors LLC now owns 130,083 shares of the financial services provider’s stock worth $271,000 after purchasing an additional 41,006 shares in the last quarter. Csenge Advisory Group increased its holdings in Prospect Capital by 131.7% in the 3rd quarter. Csenge Advisory Group now owns 98,395 shares of the financial services provider’s stock valued at $205,000 after purchasing an additional 55,935 shares in the last quarter. Private Management Group Inc. boosted its stake in shares of Prospect Capital by 6.4% during the 3rd quarter. Private Management Group Inc. now owns 21,857,191 shares of the financial services provider’s stock valued at $45,463,000 after buying an additional 1,322,387 shares during the last quarter. 180 Wealth Advisors LLC boosted its holdings in Prospect Capital by 18.9% in the third quarter. 180 Wealth Advisors LLC now owns 690,788 shares of the financial services provider’s stock worth $1,437,000 after purchasing an additional 109,802 shares during the period. Finally, Asset Dedication LLC acquired a new stake in Prospect Capital in the third quarter worth about $39,000. Hedge funds and other institutional investors own 9.06% of the company’s stock.

Prospect Capital Company Profile

Prospect Capital Corporation (NASDAQ:PSEC) is a business development company that provides financing and investment capital to middle-market companies. The company primarily invests in privately held businesses through first-lien and second-lien loans, mezzanine debt, and other debt securities, while also making equity and equity-related investments in selected companies.

Prospect Capital invests across a range of industries and has additional exposure to areas such as real estate, structured credit, and financial services.