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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Oaktree Specialty Lending Corporation (XNAS:OCSL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
OCSL
Name:
OAKTREE SPECIALTY LENDING CORPORATION (XNAS:OCSL)
Sector:
23.19M
Industry:
Credit Services
CEO:
Mr. Armen Panossian
Total Employees:
0
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF OAKTREE SPECIALTY LENDING CORPORATION(OCSL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
6.82
One Month Price Target:
$6.87
Six Month Price Target :
$7.11
Likely Price in One Year's Time:
Ticker:
$7.4
Likely Trading Range Today Under (Normal Volatility)
$6.8
Price Upper limit ($) :
$6.85
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$6.52
This week:
$6.14
This month :
$5.46
Other Primary facts
Market Cap:
1.25B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
183.37M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.4%
-25.97%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$8.23
$7.58
$5.41
$6.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$7.37
Buy Put:
Sell Put:
$7.23
$6.27
$6.41
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
OCSL
Sharpe Ratio:
2.46%
Comparison:
OCSL, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 32.22% higher than the industry
& ratio is 7.84% higher than the market/S&P 500 average
Average Returns/Yield of
OCSL
Daily returns:
0.06%
Weekly returns:
0.31%
Monthly returns:
1.26%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -20.97% below industry average
Classification:
OCSL, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.35
Statistical test of Returns:
OCSL has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.19%
Weekly Volatility:
4.91%
Monthly Volatility:
9.81%
Yearly Volatility:
33.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.10%
Volatility in last five trading days has been -50.04% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.44%
Weekly VaR:
-9.93%
Monthly VaR:
-19.87%
How Much Can the price of
OCSL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-68.83%
This translates to price declining to:
$5.67
This translates to price declining to:
$2.13
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
OCSL is a 40.23% riskier investment compared to the market/S&P 500 & is 20.14% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -33.52% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
OCSL
Beta in relation to market/S&P 500--1.27
Expected beta in 1 year's time:
0.84
Expected beta in 3 year's time:
1.188
Unlevered (debt free) Beta:
0.662
Beta in relation to Nasdaq (XNAS):
0.445
Beta in relation to all global stocks::
0.647
Beta Comparison & Analysis
Beta of competitors/peers::
1.013
Beta is 25.52% higher than peers
Average Industry Beta:
1.332
Beta is -4.57% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.58%
Sustainable growth rate is -74.58% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.032
Alpha is -52.76% below industry average alpha yield
Alpha is 204% higher than market/& is unsustainably high
Analysis of Cost of Capital of
OCSL
Equity cost of capital:
0.119
Equity cost of capital is -3.40% below industry mean WACC
Unlevered (without debt) cost of capital:
6.18%
Before-tax cost of debt:
1.93%
After-tax cost of debt:
1.53%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.53%
WACC is -44.50% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$0.83
Revenue growth rate per share of (3Y):
0.94
Annual revenue growth rate is 68.36% above the industry average
EPS:
$0.76
Expected Annual growth rate of EPS (3Y):
12.88%
Expected future EPS growth rate is -48.61% lower than the Credit Services industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 26.30%
Equity growth rate per share is 10.46% higher than the industry
Debt per share
$7.01
EBITDA per share
$1.02
Valuation Analysis Today of
OCSL
P/E Ratio:
23.19
P/E Ratio of Competitors/Peers:
11.84
P/E ratio is 95.82% higher than main peers & is 91.03% higher than the industry
Stock price/value with industry average P/E ratio: $9.22
OCSL is -26.07% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $39.37
Present value of the expected future dividends only: $10.82
P/S (Price to Sales ratio):
8.26
Price to sales ratio is 58.84% above the industry mean
P/B (Price to book value ratio):
0.94
-
-
Net income growth rate (3Y):
341.16%
Net income growth rate is 2012.23% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 19.77%
Dividend yeild: 9.16%
Previous Dividend: $0.17
Previous adjusted dividend: $0.17
Previous Dividend: $0.63
Expected next dividend best case: $0.19
Expected next dividend worst case: $0.14
Average dividend payment (long-term): $0.13
Average dividend increase/decrease (growth rate) % per period: 5.75%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.17
2021-12-14--$0.16
2021-06-14--$0.13
2022-03-14--$0.16
2021-09-14--$0.15
2021-03-12--$0.12
Dividend growth rate is -160.10% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
97.01%
Net debt to equity ratio:
141.67%
Debt to assets ratio:
47.61%
Net debt to assets ratio:
69.53%
Debt-to-asset ratio is -38.93% below industry average
Ability to repay debt:
Interest coverage ratio:
5.02
Interest coverage ratio is -48.85% less than industry average
Looking forward:
Debt growth rate:
78.87%
Annual debt growth is 60% higher than industry average debt growth rate
Debt repayment rate in last quarter: 3.74%
Analysis of Key Statistics
Correlation of price movement with the market:
0.466
Statistical significance of correlation:
OCSL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is -16.97% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.02
Covariance of price movement with the market:
0.026
Kurtosis
52.645
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.763
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
OCSL
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
5.19%
Effective tax rate is -76.03% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.37%
Return on equity (ROE) is -75.53% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.09%
Return on assets (ROA) is -15.99% lower than the industry
Financial Leverage:
1.9x
Current Ratio:
0.55
Current ratio is -90.53% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 3.0 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
-
-
EBITDA generated per employee:
-
-
Profit generated per employee:
-
-
Free cash flow (FCF) generated per employee:
-
-
Assets/Capital per employee
-
-
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
OCSL
BROOKLINE BANCORP, INC. (XNAS:BRKL)
FRONTIER ACQUISITION UNT (XNAS:FRONU)
TRICO BANCSHARES (XNAS:TCBK)
NORTHERN TRUST CORPORATION (XNAS:NTRSO)
CONNECTONE BANCORP, INC. (XNAS:CNOB)
OCEANFIRST FINANCIAL CORP. (XNAS:OCFC)
NEW MOUNTAIN FINANCE CORPORATION (XNAS:NMFC)
WORLD ACCEPTANCE CORPORATION (XNAS:WRLD)
MERCHANTS BANCORP (XNAS:MBIN)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
151.47M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
44.49M
-
9.50M
9.50M
-
- 3000.00K
6.50M
238.46M
37.16M
4.59M
186.72M
-
137.45M
144.97M
7.52M
137.45M
Statement of Cash Flow
Date:
Period:
4.59M
Differed Income Tax :
- 959.00K
Stock Based Compensation :
-
Change in Working Capital :
11.72M
Accounts Receivables:
-
Other Working Capital:
- 287896.00K
Other Non-Cash Items:
- 31569.00K
Net Cash Provided by Operating Activities:
23.19M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 246623.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
43.77M
259.47M
303.23M
50.57M
-
- 6243.00K
347.57M
-
-
-
2.59B
1.67M
- 2589698.00K
1.67M
2.35B
2.70B
12.87M
635.46M
-
-
- 12867.00K
635.46M
1.29B
-
1.29B
2.66B
1.37B
1.81M
- 481883.00K
-
424.95M
December 31, 2021 at 12:00:00 AM
30.09M
1.33B
2.70B
2.85B
1.92B
1.9B
235.02M
-
- 11603.00K
- 50000.00K
-
-
- 27170.00K
69.67M
- 7504.00K
- 1259.00K
14.42M
46.06M
31.64M
23.19M
-
23.19M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
OCSL
2023
2024
2025
2026
2027
$7.44
$13.17
$14.30
$15.52
$16.85