Prospect Capital (NASDAQ:PSEC) Reaches New 12-Month Low – Should You Sell?

Prospect Capital Corporation (NASDAQ:PSEC) reached a new 52-week low during mid-day trading on Monday . The company traded as low as $2.46 and last traded at $2.4870, with a volume of 653160 shares changing hands. The stock had previously closed at $2.46.

Analyst Ratings Changes

A number of equities analysts have commented on PSEC shares. Wells Fargo & Company lowered their price objective on Prospect Capital from $3.00 to $2.50 and set an “underweight” rating on the stock in a research note on Thursday, August 28th. Wall Street Zen upgraded Prospect Capital from a “hold” rating to a “buy” rating in a research report on Saturday, December 6th. Finally, Weiss Ratings reaffirmed a “sell (d)” rating on shares of Prospect Capital in a research report on Wednesday, October 8th. Two investment analysts have rated the stock with a Sell rating, According to MarketBeat.com, Prospect Capital has an average rating of “Sell” and a consensus price target of $2.50.

Prospect Capital Stock Up 2.0%

The company has a current ratio of 1.22, a quick ratio of 1.22 and a debt-to-equity ratio of 0.64. The company has a market capitalization of $1.18 billion, a P/E ratio of -2.91 and a beta of 0.85. The stock has a 50 day moving average price of $2.67 and a 200 day moving average price of $2.89.

Prospect Capital (NASDAQ:PSEC) last released its quarterly earnings results on Thursday, November 6th. The financial services provider reported $0.17 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.11 by $0.06. The firm had revenue of $119.44 million during the quarter, compared to the consensus estimate of $169.53 million. Prospect Capital had a negative net margin of 42.50% and a positive return on equity of 12.29%.

Prospect Capital Dividend Announcement

The firm also recently announced a monthly dividend, which will be paid on Wednesday, February 18th. Investors of record on Wednesday, January 28th will be given a dividend of $0.045 per share. The ex-dividend date is Wednesday, January 28th. This represents a c) annualized dividend and a dividend yield of 21.6%. Prospect Capital’s dividend payout ratio is presently -62.79%.

Insider Activity at Prospect Capital

In related news, CEO John F. Barry bought 925,000 shares of the company’s stock in a transaction that occurred on Thursday, September 25th. The shares were bought at an average price of $2.72 per share, for a total transaction of $2,516,000.00. Following the transaction, the chief executive officer directly owned 86,067,158 shares of the company’s stock, valued at approximately $234,102,669.76. The trade was a 1.09% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, COO M Grier Eliasek acquired 370,000 shares of the company’s stock in a transaction dated Thursday, September 25th. The shares were bought at an average price of $2.71 per share, for a total transaction of $1,002,700.00. Following the acquisition, the chief operating officer directly owned 2,501,130 shares of the company’s stock, valued at approximately $6,778,062.30. This trade represents a 17.36% increase in their position. The SEC filing for this purchase provides additional information. Company insiders own 27.98% of the company’s stock.

Institutional Trading of Prospect Capital

Institutional investors and hedge funds have recently modified their holdings of the stock. Private Trust Co. NA grew its stake in shares of Prospect Capital by 38.5% in the 2nd quarter. Private Trust Co. NA now owns 11,639 shares of the financial services provider’s stock worth $37,000 after acquiring an additional 3,238 shares in the last quarter. Raymond James Financial Inc. lifted its position in shares of Prospect Capital by 0.5% during the 2nd quarter. Raymond James Financial Inc. now owns 844,465 shares of the financial services provider’s stock worth $2,685,000 after buying an additional 3,880 shares in the last quarter. Inspire Advisors LLC boosted its stake in shares of Prospect Capital by 17.1% in the 2nd quarter. Inspire Advisors LLC now owns 27,432 shares of the financial services provider’s stock worth $87,000 after buying an additional 4,015 shares during the last quarter. D.A. Davidson & CO. increased its position in shares of Prospect Capital by 1.3% during the second quarter. D.A. Davidson & CO. now owns 351,494 shares of the financial services provider’s stock valued at $1,118,000 after acquiring an additional 4,613 shares during the last quarter. Finally, Cetera Investment Advisers boosted its holdings in shares of Prospect Capital by 1.9% in the 2nd quarter. Cetera Investment Advisers now owns 262,719 shares of the financial services provider’s stock worth $835,000 after buying an additional 4,978 shares during the last quarter. 9.06% of the stock is owned by hedge funds and other institutional investors.

About Prospect Capital

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.