Ares Capital Corp
Why Closed-End Funds Are Not That Enthusiastic about Rate Changes
Prospect Capital (PSEC) is strengthening its capital position in order to take advantage of mispricing during volatile times.
Prospect Capital Plans to Raise Capital through Spin-Offs
Prospect Capital (PSEC) is targeting spin-offs in order to raise capital to be redeployed in asset classes yielding higher returns.
Prospect’s Valuation Discount Consistent on Lower Originations
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’s Valuations: Fair amid Originations, Leverage
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.
Prospect Valuations Fair amid Rising Originations, Strong Yields
Prospect Capital’s (PSEC) stock fell ~7% in fiscal 1Q17 (September quarter) but has risen ~6% in the past 12 months.
A Look at Prospect Capital’s Discounted Valuations
The PE ratio for Prospect Capital (PSEC) is 8.97x on an NTM (next-12-month) basis, which implies its discounted valuation.
Prospect’s Fiscal 3Q18 Results Beat Estimates
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.
Prospect Capital’s Valuation: Fair or Discounted in Long Term?
Prospect Capital (PSEC) stock has fallen 14.5% over the past six months and 16.9% over the past year.
What to Expect for Prospect Capital’s Yield Expansion in 2018
Prospect Capital (PSEC) has seen a decline in yields in recent quarters to 9.9% compared to a high of 13% in 2016.
Assessing Prospect Capital’s Discounted Valuations
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.
Understanding Prospect Capital’s Decline in Originations
Prospect Capital (PSEC) witnessed a substantial fall in its originations in fiscal 4Q17, compared with fiscal 3Q17.
Ares Capital’s Purchase of Loans from SSLP
Within one year, Ares Capital Corporation (ARCC) stock is expected to reach $18.21, reflecting a rise of ~11.0% from its current price.
Prospect Capital’s Ratings: What Wall Street Analysts Have to Say
Although Prospect Capital (PSEC) has been delivering decent returns to investors, there has not been much change in the analysts’ ratings.
Prospect Capital’s Increasing Valuations in 2017
Analysts have given PSEC a one-year price target of $8.50 from the current price level, reflecting 0.7% growth.
Prospect Capital’s Total Investments Increase in 2017
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 Prioritizes Secured Lending
About 70% of Prospect Capital’s portfolio is composed of first and second lien secured loans
Prospect Capital’s Disappointing Performance in Fiscal 3Q17
Prospect Capital (PSEC) reported a decline in its net investment income in its fiscal 3Q17 earnings. Analysts expect PSEC’s fiscal 4Q17 EPS to reach $0.20, representing no change from fiscal 3Q17.
Ares Capital’s Analyst Ratings Suggest Stable Earnings in 2017
In February 2017, 12 of the 17 analysts covering Ares Capital, or ~71%, have rated it as a “buy” or a “strong buy.”
Ares Capital Valuations at a Premium on Relative Outperformance
Ares Capital stock has risen ~11.7% over the past six months. The company saw a strong performance in 4Q16 on higher deployment, stable yields, and expense management.
Ares Capital’s Preference for Second Lien Continued in 4Q16
Ares Capital has consistently enhanced its exposure to second lien debt in a bid to generate higher yields. In 4Q16, its second lien debt made up 33% of its new commitments.
Ares Capital’s Credit Statistics Deteriorated Marginally in 4Q16
Ares Capital’s (ARCC) portfolio totaled $8.8 billion at fair value on December 31, 2016. Its total assets stood at $9.2 billion.
Ares Capital Beat Estimates for Deployments, Yields in 4Q16
Ares Capital (ARCC) posted EPS (earnings per share) of $0.42, beating Wall Street analysts’ consensus estimate of $0.39 in 4Q16.
ARCC’s Net Investments Rose on Senior Secured Loans in 4Q16
By the end of December 2016, Ares Capital (ARCC) had a diversified portfolio of 218 companies totaling $8.8 billion at fair value.
What Analyst Ratings Say about Ares Capital’s Performance
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 […]
What Boosted Ares Capital’s Valuation?
Stock performance Ares Capital (ARCC) stock has risen ~14% over the past six months and 37% over the past year due to improved operating performance. In 3Q16, the company saw higher deployments and yields, and lower expenses. The company declared a dividend of $0.38 per share in 3Q16, in line with that of 3Q15. With a dividend […]
Could Ares Capital’s Second-Lien Preference Continue in 4Q?
Second-lien preference Ares Capital (ARCC) has consistently increased its exposure to investments in second-lien debt to garner higher yields. In 3Q16, second-lien debt made up 23% of its new commitments and exits made up 18%. Second-lien loans formed 32% of the company’s total portfolio, and first-lien senior secured loans fell to 25% from 29% in […]
Ares Capital’s Credit Statistics Expected to Improve in 4Q16
Broad markets driving statistics Ares Capital’s (ARCC) portfolio valuation and total assets stood at $8.8 billion and $9.1 billion, respectively, on September 30, 2016. The company’s corporate borrowers posted last-12-month EBITDA (earnings before interest, tax, depreciation, and amortization) growth of ~7% due to adequate growth and repayment capability. In 3Q16, Ares Capital’s credit statistics fell, with non-accrual […]
How Ares Capital’s Net Investments Could Rise in 4Q16
Net investments to rise Ares Capital (ARCC) has seen subdued deployment over the past few quarters. The company’s investments have fallen since 1Q16, mainly due to higher exits. In 4Q16, Ares might see marginally higher net investments due to new programs and first- and second-lien lending. As of September 30, 2016, Ares Capital had a diversified […]
What Analyst Ratings Suggest about Prospect’s Performance
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% […]
Ares Capital’s 4Q16 Quarterly Earnings: What to Expect
Ares Capital (ARCC) is expected to post EPS (earnings per share) of $0.39 in 4Q16, compared with $0.40 in 4Q15 and $0.43 in the previous quarter.
With Net Exits and Improved Yields, Prospect’s Valuation Is Fair
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, […]
How Prospect Generated Strong Yields
Generating strong yields Prospect Capital’s (PSEC) valuation gap has narrowed more than its industry peers’ and the broader market’s (SPX) (SPY), reflecting improved performance over the past few quarters. The company didn’t provide any further guidelines on possible spin-offs of profitable divisions in a bid to raise capital. If the stock rises, at least above the […]
A Look at Prospect’s Net Exits and Focus on Retail Lending
Exits higher than origination In fiscal 2Q17, Prospect Capital (PSEC) made portfolio investments of $470 million, which is a substantial rise over the $347 million invested in fiscal 1Q17. These funds were deployed in new and multiple follow-on investments. The company saw higher net exits than it did in the previous quarter, in line with […]
Prospect Capital Beats Estimates with Investments, Lower Expenses
Prospect Capital (PSEC) reported fiscal 2Q17 earnings per share of $0.24 on February 8, 2017—higher than the analyst estimate of $0.22.
Apollo Investment Sees Net Investments Turn Positive in Fiscal 3Q17
In fiscal 3Q17, Apollo Investments (AINV) sold $17.1 million in investments and repaid $178.2 million.
Apollo Investment Valuations Fair amid Marginal Improvements
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.
How Analysts View Apollo Investment in 2017
Four of the 15 analysts covering Apollo Investment (AINV) rated it a “buy” or “strong buy” in January 2017.
Apollo Investment Earnings Show Signs of Stabilization in Fiscal 4Q17
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’s Performance to Rise Marginally in 2017
In this series, we’ll look at Prospect Capital’s expected performance, deployments, portfolio strategy, yields, balance sheet strength, dividends, and valuations.
Apollo Investments Sees Gains and Reversal on Portfolio
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 Yields Stabilize, Reduced Exposure in Energy
At the end of fiscal 2Q17, Apollo Investment’s (AINV) oil and gas investments represented 9.7% of its total portfolio, or $246 million.
AINV’s Valuation Fair, Stock Can Rise on Earnings Surprise
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’s Net Exits Trend Expected to Reverse in 2017
Apollo Investment’s (AINV) total portfolio stood at ~$2.6 billion in fiscal 2Q17 compared to ~$3.2 billion in fiscal 2Q16.
Apollo Investment Improved Bottom Line on Select Investments
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.
Originations, Retail Lending Are Key Drivers for Closed-End Funds
Closed-end funds have seen subdued originations over the past few quarters. Quality originations commanding higher yields continue to drive closed-end funds’ stock performances.
What to Expect from Prospect’s, Ares’s, BlackRock’s 4Q16 Earnings
BlackRock Capital Investment (BKCC) is expected to report EPS (earnings per share) of $0.23 in 4Q16, compared to earlier estimates of $0.25.
Why Closed-End Funds Are Deploying Higher Leverages
Closed-end funds have been deploying leverage in bids to take advantage of near-zero interest rates following the 2007 financial crisis.
Prospect’s, Ares’s Originations Rise, BlackRock’s, Apollo’s Fall
The availability of credit has led to higher competition among investors and closed-end funds (PEX) seeking better investment options.
Apollo, BlackRock Target Less Risk, Unlike Ares, Prospect
Over the past few years, closed-end funds (PSP) have deployed funds in middle market companies with better credit ratings.
Prospect’s and Ares’s Yields Fell, BlackRock’s Rose in 3Q16
Closed-end funds (PEX) have been targeting higher yields by investing in second lien—or marginally risky—offerings or companies.
Closed-End Funds Are Affected by Originations, Rates
Closed-end managers deploy money in middle market companies engaged in businesses across sectors by raising capital through share issuances.
Ares Capital Stock and Valuations Rise on Strong Performance
Ares Capital (ARCC) stock has risen ~1.6% over the past six months. The company saw a strong performance in 3Q16 on higher deployment, yields, and lower expenses.
Ares Capital Second Lien Preference Evident in Portfolio Changes
Ares Capital (ARCC) has consistently enhanced its exposure to second lien debt in a bid to generate higher yields.
Ares Capital’s Yields and Credit Statistics Fell in 3Q16
Ares Capital’s (ARCC) portfolio totaled $8.8 billion at fair value as of September 30, 2016.
Ares Capital Enhances Originations in 3Q16
By the end of September 2016, Ares Capital (ARCC) had a diversified portfolio of 215 companies totaling $8.8 billion at fair value.
Ares Capital’s Performance Improves amid ACAS Acquisition News
Ares Capital (ARCC) posted EPS (earnings per share) of $0.43, beating Wall Street analysts’ estimate of $0.39 in 3Q16.
Prospect Could See Higher Originations in Fiscal 1Q17
In fiscal 4Q16, Prospect Capital (PSEC) made $294 million in investments, a substantial rise compared to its investments of $23 million in fiscal 3Q16.
What to Expect of Prospect Capital’s Earnings in Fiscal 1Q17
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.
Closed-End Funds Face Leverage Issues as Rate Hike Looms
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.
How Declining Yields Are Prompting Changes at Closed-End Funds
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.
Volatility Continues to Cause Net Exits for Closed-End Funds
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.
Prospect, BlackRock Lead in Yields among Closed-End Funds
Closed-end funds (PEX) have been boosting their yields by deploying capital in marginally risky asset classes or companies.
How an Interest Rate Hike Could Impact Closed-End Funds
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.
What to Expect of Prospect Capital’s Fiscal 4Q16 Earnings
Prospect Capital (PSEC) stock has risen 14% over the past three months on its stable operating performance. It’s expected to post $1.03 in EPS for fiscal 2016.
What to Expect from Closed-End Fund Earnings and Consolidation in 2016
Closed-end funds will be tested on a quality of their portfolios. Companies with higher leverage and lower grade investments will see discounted valuations.
Will Subdued Interest Rates in 2016 Benefit Levered Closed-End Funds?
Closed-end funds deploy leverage in order to generate returns for shareholders. The method works in tandem with interest rates when they’re low.
Where Do Closed-End Funds Stand on Dividends in 2016?
Closed-end funds tend to pay higher dividends, with dividend payout ratios in the range of 70%–90%.
Ares Capital’s Yields Are above 9% on Senior Secured Loan Program
Ares Capital’s (ARCC) yields fell mainly due to the decline in the yield on subordinated certificates in the SSLP (senior secured loan program) and lower transaction flow in high yield markets.
Prospect Capital’s Big Plans for Its Portfolio and Structured Lending
Prospect Capital (PSEC) made portfolio investments of $692 million in fiscal 2Q16 (which ended December 31, 2015), up from $438 million in fiscal 1Q16.
How Subdued Interest Rates Could Continue to Benefit Levered Closed-Ended Funds
Closed-ended funds deploy leverage in order to generate returns for shareholders. The method works in tandem with interest rates when they’re low.
Prospect Capital Yielded 14%, Maintained Good Growth in 1Q16
Prospect Capital reported that its September quarter earnings beat Wall Street analysts’ net income estimates of $0.25 with a posted net income of $0.26.
Why Ares Capital Is Focusing on Second Lien Investing in 3Q15
Over the past few quarters, Ares Capital (ARCC) has consistently increased its exposure to second lien senior secured debt. Second lien debt made up 21% of its new commitments in 3Q15.
Ares Capital’s 3Q15 Investment Performance, Senior Secured Loans
Ares Capital’s (ARCC) portfolio totaled $8.7 billion at fair value as of September 30, 2015. Its total assets stood at $9.2 billion.
Why Ares Capital Is Increasing Its Focus on Second Lien Investing
Ares Capital is targeting a minimum yield that’s 400 basis points higher on its second lien debt offerings than what it generates on first lien senior loans.