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Prospect Capital (PSEC) Gains As Market Dips: What You Should Know

Zacks Equity Research

Prospect Capital (PSEC) closed at $5.81 in the latest trading session, marking a +0.69% move from the prior day. This change outpaced the S&P 500's 2.06% loss on the day. Meanwhile, the Dow lost 1.81%, and the Nasdaq, a tech-heavy index, lost 2.99%.

Heading into today, shares of the business development company had lost 15.4% over the past month, lagging the Finance sector's loss of 7.42% and the S&P 500's loss of 6.47% in that time.

Investors will be hoping for strength from PSEC as it approaches its next earnings release, which is expected to be February 6, 2019. On that day, PSEC is projected to report earnings of $0.22 per share, which would represent year-over-year growth of 10%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $183.72 million, up 13.13% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.95 per share and revenue of $755.51 million. These totals would mark changes of +20.25% and +14.85%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for PSEC. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PSEC currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, PSEC currently has a Forward P/E ratio of 6.07. Its industry sports an average Forward P/E of 9.43, so we one might conclude that PSEC is trading at a discount comparatively.

The Financial - Investment Management industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research