Stellus Capital (SCM) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Stellus Capital (SCM) closed at $13.64, marking a -1.3% move from the previous day. This move lagged the S&P 500's daily gain of 0.1%. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, lost 2.19%.

Heading into today, shares of the investment company had lost 0.72% over the past month, outpacing the Finance sector's loss of 4.8% and lagging the S&P 500's gain of 3.13% in that time.

Investors will be hoping for strength from Stellus Capital as it approaches its next earnings release. The company is expected to report EPS of $0.45, up 55.17% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $23.57 million, up 52.18% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.78 per share and revenue of $96.37 million. These totals would mark changes of +28.99% and +28.31%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Stellus Capital. 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. Stellus Capital is currently a Zacks Rank #2 (Buy).

Investors should also note Stellus Capital's current valuation metrics, including its Forward P/E ratio of 7.75. For comparison, its industry has an average Forward P/E of 6.95, which means Stellus Capital is trading at a premium to the group.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 13, which puts it in the top 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow SCM in the coming trading sessions, be sure to utilize Zacks.com.

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