Is Prospect Capital Corporation [PSEC] a good investment? Don’t be fooled by its recent momentum

In yesterday’s Wall Street session, Prospect Capital Corporation (NASDAQ:PSEC) shares traded at $6.29, up 0.16% from the previous session.

2 analysts cover Prospect Capital Corporation (NASDAQ:PSEC), according to research data. The consensus rating among analysts is ‘Underweight’. As we calculate the median target price by taking the range between a high of $5.75 and a low of $5.75, we find $5.75. Given the previous closing price of $6.28, this indicates a potential downside of -8.44 percent. PSEC stock price is now -4.14% away from the 50-day moving average and -11.25% away from the 200-day moving average. The market capitalization of the company currently stands at $2.53B.

The stock has received a hold rating from 1 analysts and a buy rating from 0. Brokers who have rated the stock have averaged $5.75 as their price target over the next twelve months.

In other news, Barry John F, CHIEF EXECUTIVE OFFICER bought 100,000 shares of the company’s stock on May 12. The stock was bought for $609,000 at an average price of $6.09. Upon completion of the transaction, the CHIEF EXECUTIVE OFFICER now directly owns 72,699,542 shares in the company, valued at $457.28 million. An SEC document containing details of the transaction can be found on the SEC’s website. On May 11, CHIEF EXECUTIVE OFFICER Barry John F bought 100,000 shares of the business’s stock. A total of $628,000 was incurred on buying the stock at an average price of $6.28. This leaves the insider owning 72,599,542 shares of the company worth $456.65 million. A total of 27.53% of the company’s stock is owned by insiders.

There have been several recent changes in the stakes of large investors in PSEC stock. A new stake in Prospect Capital Corporation shares was purchased by MILLENNIUM MANAGEMENT LLC during the first quarter worth $504,000. MIDWESTONE FINANCIAL GROUP, INC. invested $346,000 in shares of PSEC during the first quarter. In the first quarter, PROSTATIS GROUP LLC acquired a new stake in Prospect Capital Corporation valued at approximately $325,000. PROSHARE ADVISORS LLC acquired a new stake in PSEC for approximately $309,000. BESSEMER GROUP INC purchased a new stake in PSEC valued at around $252,000 in the second quarter. In total, there are 264 active investors with 8.42% ownership of the company’s stock.

On Tuesday morning Prospect Capital Corporation (NASDAQ: PSEC) stock kicked off with the opening price of $6.27. During the past 12 months, Prospect Capital Corporation has had a low of $5.92 and a high of $8.19. The fifty day moving average price for PSEC is $6.55 and a two-hundred day moving average price translates $7.08 for the stock.

The latest earnings results from Prospect Capital Corporation (NASDAQ: PSEC) was released for Mar, 2023. According to the Asset Management Company, earnings per share came in at $0.26, beating analysts’ expectations of $0.23 by 0.03. This compares to $0.38 EPS in the same period last year. The company reported revenue of $215.12 million for the quarter, compared to $181.43 million a year earlier. Comparatively to last year’s same quarter, the company’s quarterly revenue rose 18.57 percent. For the current quarter, analysts expect PSEC to generate $216.46M in revenue.

Moreover, the firm recently paid out its quarterly dividend on 09/20/2023. Investors who held shares on 08/29/2023 were paid a $0.06 dividend. On an annualized basis, this represents a $0.72 dividend and a 11.45% percent yield. There was an ex-dividend date of 08/28/2023 for this dividend. In terms of dividend payout ratio, PSEC is presently at 50.55%.

Prospect Capital Corporation(PSEC) Company Profile

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.