Apollo Investment Corporation

Of the five analysts covering Prospect Capital stock, one has recommended a “strong sell,” one has recommended a “sell,” and three have rated it a “hold.”

The PE ratio for Prospect Capital (PSEC) is 8.97x on an NTM (next-12-month) basis, which implies its discounted valuation.

Prospect Capital Corporation (PSEC) released its earnings report for fiscal 3Q18 on May 9. The results were for the quarter that ended on March 31.

No changes have been seen in analysts’ ratings on Prospect Capital (PSEC) for the past few months.

In fiscal 2Q18, Prospect Capital’s (PSEC) total investment income was $162.4 million compared to $183.4 million a year earlier.

Prospect Capital (PSEC) incurred total operating expenses of $89.2 million in fiscal 2Q18 compared to $99 million in fiscal 2Q17.

Prospect Capital’s (PSEC) management has indicated a positive view on the company’s future.

Prospect Capital (PSEC) has made first lien, senior, and secured debt a priority in terms of originations because this will help it to hedge downside risk.

Prospect Capital has a PE (price-to-earnings ratio) of 8.61x on a next-12-month basis compared to its peer average of 8.41x, implying Prospect’s higher valuation.

Prospect Capital (PSEC) generated NII (net investment income) per share of $0.20 in its fiscal 2Q18, which ended on December 31, 2017.

Prospect Capital (PSEC) stock has fallen 14.5% over the past six months and 16.9% over the past year.

Prospect Capital (PSEC) is registered as a business development company (or BDC), which means that if it pays 90% of its profits in dividends, it won’t have to pay any taxes.

Prospect Capital (PSEC) has seen a decline in yields in recent quarters to 9.9% compared to a high of 13% in 2016.

Prospect Capital’s (PSEC) exits and repayments have largely been in debt-related investments.

Prospect Capital (PSEC) has experienced yield compression in recent quarters, largely due to its efforts to reduce risk and focus on quality credit.

Prospect Capital (PSEC) is analyzed by five Wall Street analysts in November 2017. Of these analysts, one has rated the stock a “sell” and another one has given a “strong sell” rating.

As of September 30, Prospect Capital (PSEC) reported total investments amounting to $5.6 billion (fair value), a marginal fall from its total investments balance as of June 30.

Prospect Capital Corporation (PSEC) released its earnings report for fiscal 1Q18 on November 8. The company failed to meet the projections Wall Street analysts had set for earnings per share or EPS and revenues.

Prospect Capital has a market capitalization of $2.2 billion.

Prospect Capital has generated a return of 4.1% on its assets on a last-12-month (or LTM) basis.

Analysts have given a one-year price target of $6.88 per share on Prospect Capital stock, which reflects a marginal rise of 0.29% from its current price.

Prospect Capital (PSEC) declared total dividends of $1.00 per share in fiscal 2017, which is the same as it declared in fiscal 2016.

Prospect Capital (PSEC) witnessed a substantial fall in its originations in fiscal 4Q17, compared with fiscal 3Q17.

Prospect Capital’s (PSEC) total investments at fair value in fiscal 4Q17 stood at $5.8 billion, reflecting a marginal fall from $6.0 billion in fiscal 3Q17.

Of the 14 analysts currently covering Ares Capital Corporation (ARCC), four analysts rated the stock as a “buy,” six analysts gave “strong buy” ratings, and the remaining four analysts gave “hold” ratings.

Ares Capital Corporation (ARCC) currently has a price-to-sales ratio of ~4.6x.

Ares Capital Corporation (ARCC) is expected to declare a dividend of $1.52 per share in 2017.

In 2Q17, Ares Capital made exits valued at $1.8 billion.

Within one year, Ares Capital Corporation (ARCC) stock is expected to reach $18.21, reflecting a rise of ~11.0% from its current price.

Analysts have given PSEC a one-year price target of $8.50 from the current price level, reflecting 0.7% growth.

Although Prospect Capital (PSEC) has been delivering decent returns to investors, there has not been much change in the analysts’ ratings.

About 70% of Prospect Capital’s portfolio is composed of first and second lien secured loans

In fiscal 3Q17, Prospect Capital’s total value of investments stood at $6.0 billion in 125 companies, compared to $5.9 billion in fiscal 2Q17 in 123 companies.

Prospect Capital’s (PSEC) originations decreased in fiscal 3Q17 to $449.6 million compared to $469.5 million in fiscal 2Q17.

In February 2017, 12 of the 17 analysts covering Ares Capital, or ~71%, have rated it as a “buy” or a “strong buy.”

Analysts’ ratings for Ares Capital Ares Capital’s (ARCC) analyst ratings have improved over the past few months due to rising earnings and originations. So far in February 2017, twelve of the 17 analysts covering the company have rated it as a “buy” or a “strong buy.” Five analysts rated it as a “hold.” Since January 2017, Ares […]

Analysts’ ratings for Prospect Of the eight analysts covering Prospect Capital (PSEC), two rated it a “buy” or “strong buy” in January 2017. Three analysts, or ~37.5%, rated it a “hold.” One analyst rated Prospect an “underperform” and two analysts rated the company a “sell.” Prospect’s mean target price is $8.05 per share, implying a fall of 7.9% […]

Fiscal 2Q17 net exits Prospect Capital (PSEC) stock has risen 16% over the past three months and 16% over the past year. The company is currently trading near its 52-week high. The company saw net exits of $175.5 million in fiscal 2Q17, with higher exits from first-lien holdings. It saw lower leverage mainly due to higher exits, […]

Prospect Capital (PSEC) reported fiscal 2Q17 earnings per share of $0.24 on February 8, 2017—higher than the analyst estimate of $0.22.

In fiscal 3Q17, Apollo Investment (AINV) repurchased 2.3 million shares at a weighted average price per share of $5.90 for a total cost of $13.6 million.

In fiscal 3Q17, Apollo Investments (AINV) sold $17.1 million in investments and repaid $178.2 million.

Four of the 15 analysts covering Apollo Investment (AINV) rated it a “buy” or “strong buy” in January 2017.

Apollo Investment’s (AINV) yields have declined and stabilized at ~10.9%, on par with average returns garnered by other closed-end funds.

On February 6, 2017, Apollo Investment (AINV) posted earnings per share of $0.17 in fiscal 3Q17, beating analyst estimates of $0.16.

Prospect Capital (PSEC) stock rose 3.0% over the past three months and 20.0% over the past year. The company is currently trading 5.0% below its 52-week high.

In this series, we’ll look at Prospect Capital’s expected performance, deployments, portfolio strategy, yields, balance sheet strength, dividends, and valuations.

At the end of fiscal 2Q17, Apollo Investment’s (AINV) oil and gas investments represented 9.7% of its total portfolio, or $246 million.

Apollo Investment’s (AINV) realized and unrealized gains stood at $1.6 million in fiscal 2Q17 compared to realized losses of $42.6 million in fiscal 1Q16.

Apollo Investment’s (AINV) total portfolio stood at ~$2.6 billion in fiscal 2Q17 compared to ~$3.2 billion in fiscal 2Q16.

Currently, Apollo Investment (AINV) is trading at 8.5x on a one-year forward earnings basis. Its peers are trading at 8.8x.

Apollo Investment (AINV) posted earnings per share of $0.18 in fiscal 2Q17, compared to analyst estimates of $0.17. In this series, we’ll study AINV’s performance, yields, capital deployment, portfolio, dividends, and valuations.

BlackRock Capital Investment (BKCC) is expected to report EPS (earnings per share) of $0.23 in 4Q16, compared to earlier estimates of $0.25.

Closed-end funds raise funds via either leverage or stock offerings. Companies tend to keep their leverages in check in the wake of expected rate hikes.

Closed-end companies (PEX) tend to pay higher dividends, with dividend payout ratios in the range of 70%–100%.

Closed-end funds have been deploying leverage in bids to take advantage of near-zero interest rates following the 2007 financial crisis.

Over the past few years, closed-end funds (PSP) have deployed funds in middle market companies with better credit ratings.

The availability of credit has led to higher competition among investors and closed-end funds (PEX) seeking better investment options.

Closed-end funds (PEX) have been targeting higher yields by investing in second lien—or marginally risky—offerings or companies.

Closed-end managers deploy money in middle market companies engaged in businesses across sectors by raising capital through share issuances.

Prospect Capital’s (PSEC) stock fell ~7% in fiscal 1Q17 (September quarter) but has risen ~6% in the past 12 months.

Prospect Capital (PSEC) reported fiscal 1Q17 EPS of $0.22—lower than the analyst estimates of $0.24. PSEC saw lower earnings on lower investment income.

Prospect Capital’s (PSEC) stock has fallen ~3% in the past quarter, and it has risen ~11% in the past year. The company is currently trading 7% lower than its 52-week high.

Prospect Capital (PSEC) is expected to post earnings per share (or EPS) of $0.24 in fiscal 1Q17, a fall of $0.01 compared to estimates.

Prospect Capital (PSEC) is strengthening its capital position in order to take advantage of mispricing during volatile times.

Ares Capital’s (ARCC) net DE (debt-to-equity) ratio decreased to 0.73x on June 30, 2016. Management had targeted a DE ratio of 0.65x–0.75x.

Ares Capital (ARCC) has consistently increased its exposure to second lien senior secured debt. However, in the June quarter, second lien debt comprised only 24% of its new commitments.

Prospect Capital (PSEC) made portfolio investments of $294 million in the June quarter, a substantial rise from its investment of $23 million in the March quarter.

Closed-end funds (PEX) have been boosting their yields by deploying capital in marginally risky asset classes or companies.

Closed-end asset managers (PSP) are expected to see higher interest costs on their leverage positions if there is a substantial hike by the Federal Reserve by the end of 2016. Portfolio yields are expected to remain stable, as the demand for quality borrowers is high among lenders.

Apollo Investments (AINV) sold $146 million in investments and repaid a total of $193 million in fiscal 1Q17.

The valuation gap has narrowed on Prospect’s relatively strong performance, backed by its originations in structured credit.

Closed-end funds deploy leverage in order to generate returns for shareholders. The method works in tandem with interest rates when they’re low.

Closed-end funds tend to pay higher dividends, with dividend payout ratios in the range of 70%–90%.

Prospect’s valuation gap has declined over the past one month due to a sharp pullback in stock followed by a strong performance during the December quarter.

Closed-ended funds deploy leverage in order to generate returns for shareholders. The method works in tandem with interest rates when they’re low.

As the interest rate is expected to rise, companies with highly leveraged portfolio investments will see lower returns due to higher interest costs.

Prospect Capital generated distributable income of $94.0 million or $0.26 per weighted average share, exceeding $0.25 per share of dividends.

Prospect Capital’s (PSEC) stock has declined by ~13% over the past six months and ~27% over the past 12 months.

As of June 2015, Ares Capital’s (ARCC) stock declined by ~5% over the past 12 months. The company paid a dividend of $0.38 per share—at par with the year before.

Ares Capital (ARCC) has consistently increased its exposure in second lien senior secured debt. It formed 26% of its total portfolio in 1Q15.

Prospect Capital’s ~13% dividend yield is the highest of its investment management peers. Its recent stock troubles are due to declining yields.

Prospect Capital has managed to generate above-market yields through disciplined credit selection and a diverse origination approach.

Prospect Capital (PSEC) announced on May 6 that it has completed one new investment and several follow-on investments totaling $219 million in 3Q15, which ended on March 31, 2015.