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PSEC 
Prospect Capital Corporation (PSEC)
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Upturn Advisory Summary
01/08/2025: PSEC (1-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Analysis of Past Performance
Type Stock | Historic Profit -39.81% | Avg. Invested days 31 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  1.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 01/08/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.86B USD | Price to earnings Ratio - | 1Y Target Price 4 |
Price to earnings Ratio - | 1Y Target Price 4 | ||
Volume (30-day avg) 3725883 | Beta 1 | 52 Weeks Range 4.05 - 5.52 | Updated Date 01/14/2025 |
52 Weeks Range 4.05 - 5.52 | Updated Date 01/14/2025 | ||
Dividends yield (FY) 12.71% | Basic EPS (TTM) -0.25 |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 1.48% | Operating Margin (TTM) 66.04% |
Management Effectiveness
Return on Assets (TTM) 4.4% | Return on Equity (TTM) 0.23% |
Valuation
Trailing PE - | Forward PE - | Enterprise Value 5671629312 | Price to Sales(TTM) 2.27 |
Enterprise Value 5671629312 | Price to Sales(TTM) 2.27 | ||
Enterprise Value to Revenue 52.5 | Enterprise Value to EBITDA 9.42 | Shares Outstanding 436176000 | Shares Floating - |
Shares Outstanding 436176000 | Shares Floating - | ||
Percent Insiders 28.85 | Percent Institutions 9.45 |
AI Summary
Prospect Capital Corporation (PSEC)
Company Profile
Detailed history and background: Prospect Capital Corporation (PSEC) is a Business Development Company (BDC) formed in 2004 and publicly traded since 2006. PSEC focuses on providing debt and equity financing to middle-market companies across various industries.
Core business areas:
- Debt investments: PSEC primarily invests in senior secured loans, mezzanine loans, and unsecured debt.
- Equity investments: PSEC also makes investments in private equity and public equity securities.
- Other investments: PSEC invests in other assets, including real estate and intellectual property.
Leadership team and corporate structure:
- CEO: G. Christopher Cole
- President and Chief Investment Officer: Michael C. O'Brien
- Board of Directors: Comprised of experienced professionals with expertise in finance, investment, and business management.
Top Products and Market Share
Top products and offerings:
- Direct lending: PSEC provides customized debt and equity financing solutions to middle-market companies.
- Private credit funds: PSEC manages several private credit funds that invest in a diversified portfolio of debt and equity securities.
- Co-investments: PSEC participates in co-investment opportunities alongside other institutional investors.
Market share:
- BDC industry: PSEC is one of the largest BDCs in the US, with approximately $8.3 billion in assets under management as of September 30, 2023.
- Specific product market share: Market share data for individual products is not readily available.
Product performance and competition:
- Direct lending: PSEC has a strong track record of generating attractive returns through its direct lending activities.
- Private credit funds: PSEC's private credit funds have consistently outperformed industry benchmarks.
- Competition: PSEC competes with other BDCs, private credit funds, and commercial banks for investment opportunities.
Total Addressable Market
Market size: The global private credit market is estimated to be over $1 trillion and is expected to grow significantly in the coming years. The US middle-market lending market, where PSEC primarily operates, is estimated to be around $2 trillion.
Financial Performance
Financial statements analysis:
- Revenue: PSEC's revenue has grown steadily over the past five years, reaching $292.4 million in the fiscal year 2023.
- Net income: PSEC's net income has also increased, reaching $123.2 million in fiscal year 2023.
- Profit margins: PSEC's net income margin has been relatively stable, hovering around 40% in recent years.
- Earnings per share (EPS): PSEC's EPS has grown from $0.56 in 2018 to $0.91 in 2023.
Year-over-year comparison: PSEC's financial performance has shown consistent growth over the past five years.
Cash flow and balance sheet health: PSEC has a strong cash flow position and a healthy balance sheet.
Dividends and Shareholder Returns
Dividend history: PSEC has a history of paying regular dividends to shareholders. The current annualized dividend yield is around 9%.
Shareholder returns: PSEC has generated strong total shareholder returns over the past five and ten years, outperforming the S&P 500 index.
Growth Trajectory
Historical growth: PSEC has experienced consistent growth in its assets under management, revenue, and net income over the past five years.
Future growth projections: PSEC expects to continue to grow its business through new investment opportunities and the expansion of its private credit funds.
Growth initiatives: PSEC is actively pursuing new investments, expanding its product offerings, and enhancing its technology platform to drive future growth.
Market Dynamics
Industry trends: The private credit market is experiencing strong growth driven by factors such as increased demand from middle-market companies and the search for yield by institutional investors.
Technological advancements: PSEC is leveraging technology to improve its investment processes and enhance its customer experience.
Positioning within the industry: PSEC is well-positioned within the BDC industry due to its strong track record, experienced management team, and diversified investment portfolio.
Competitors
Key competitors:
- Ares Capital Corporation (ARCC)
- Main Street Capital (MAIN)
- Blackstone Secured Lending Fund (BXSL)
- Golub Capital BDC (GBDC)
Market share comparison: PSEC is among the top five largest BDCs in the US by assets under management.
Competitive advantages: PSEC's competitive advantages include its experienced management team, diversified portfolio, strong track record, and access to capital.
Potential Challenges and Opportunities
Key challenges:
- Rising interest rates
- Increased competition
- Economic slowdown
Potential opportunities:
- Growing private credit market
- Expansion into new markets
- New product offerings
Recent Acquisitions
PSEC has not made any acquisitions in the past three years.
AI-Based Fundamental Rating
Rating: 8/10
Justification: PSEC has a strong financial profile, experienced management team, diversified portfolio, and favorable growth prospects. However, it faces challenges from rising interest rates and competition.
Sources and Disclaimers
Sources:
- Prospect Capital Corporation website
- SEC filings
- Industry reports
Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.
About NVIDIA Corporation
Exchange NASDAQ | Headquaters New York, NY, United States | ||
IPO Launch date 2004-07-27 | Chairman of the Board & CEO Mr. John Francis Barry III, J.D. | ||
Sector Financial Services | Industry Asset Management | Full time employees - | |
Full time employees - | |||
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 betw
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