In a recent transaction, M. Grier Eliasek, the Chief Operating Officer of Prospect Capital Corp (NASDAQ:PSEC), purchased 5,000 shares of the company's common stock. The shares were acquired on November 25 at an average price of $4.829 per share, amounting to a total investment of $24,145.
Following this transaction, Eliasek now directly owns approximately 1,706,130 shares of Prospect Capital. This purchase reflects Eliasek's continued investment in the company, where he holds dual roles as both a director and an officer. Prospect Capital, headquartered in New York, operates as a business development company focusing on middle-market companies.
In other recent news, Prospect Capital Corporation has increased its preferred stock offering to $2.25 billion due to strong market demand, reclassifying 20 million shares from common to preferred stock. Preferred Capital Securities, the dealer manager for the offering, has successfully raised $5.0 billion of capital since its inception in 2011. The offering is available through a prospectus supplement and accompanying prospectus.
The company has also reported robust earnings for the fourth quarter of fiscal year 2024, with a net investment income of $102.9 million and a net asset value of $3.71 billion. Prospect Capital emphasized its strong balance sheet, diversified funding sources, and significant liquidity, along with a strategic shift towards first lien debt.
However, Wells Fargo (NYSE:WFC) has revised its expectations for Prospect Capital, downgrading its price target from $5.00 to $4.50 due to a lower Secured Overnight Financing Rate curve and an anticipated increase in shares following the conversion of preferred stocks. Wells Fargo has also adjusted its net operating income forecasts for the company for fiscal years 2025 and 2026.
Despite these adjustments, Prospect Capital continues to make strategic decisions to maintain shareholder distributions and strengthen its investment portfolio. The company's ability to tap into the unsecured term debt market to extend liability duration and reduce counterparty risk has been noted by analysts. These recent developments indicate that Prospect Capital is actively managing its financial health.
InvestingPro Insights
The recent insider purchase by M. Grier Eliasek aligns with Prospect Capital Corp's (NASDAQ:PSEC) reputation for shareholder returns. According to InvestingPro data, PSEC boasts a significant dividend yield of 11.39%, which is notably high in the current market environment. This attractive yield is supported by the company's impressive track record of maintaining dividend payments for 21 consecutive years, as highlighted by one of the InvestingPro Tips.
However, investors should consider the broader financial picture. PSEC's revenue for the last twelve months as of Q1 2025 stood at $821.73 million, with a concerning year-over-year decline of 7.23%. This revenue contraction is further emphasized by the quarterly revenue growth of -16.9% in Q1 2025, suggesting some headwinds in the company's core business.
Despite these challenges, PSEC maintains a substantial market capitalization of $2.07 billion, indicating its significant presence in the business development company sector. The company's ability to sustain its dividend policy in the face of revenue pressures may be of particular interest to income-focused investors.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights with over 10 more tips available for PSEC, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.