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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Prospect Capital Corporation (XNAS:PSEC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PSEC
Name:
PROSPECT CAPITAL CORPORATION (XNAS:PSEC)
Sector:
- 10115.00K
Industry:
Asset Management
CEO:
Mr. John Barry
Total Employees:
-
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PROSPECT CAPITAL CORPORATION(PSEC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ASSET MANAGEMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
7.37
One Month Price Target:
$7.41
Six Month Price Target :
$7.58
Likely Price in One Year's Time:
Ticker:
$7.79
Likely Trading Range Today Under (Normal Volatility)
$7.35
Price Upper limit ($) :
$7.4
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$7.05
This week:
$6.66
This month :
$5.94
Other Primary facts
Market Cap:
2.89B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
393.16M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.17%
-15.83%
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:
$8.85
$8.17
$5.89
$6.57
Medium risk (<10%) entry points
Buy Call
Sell Call
$7.95
Buy Put:
Sell Put:
$7.80
$6.79
$6.94
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PSEC
Sharpe Ratio:
1.46%
Comparison:
PSEC, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 82.09% higher than the industry
& is -35.76% lower than the market/S&P 500 average
Average Returns/Yield of
PSEC
Daily returns:
0.04%
Weekly returns:
0.20%
Monthly returns:
0.80%
Yearly returns:
9.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is 4.50% above industry average
Classification:
PSEC, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.8
Statistical test of Returns:
PSEC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.13%
Weekly Volatility:
4.76%
Monthly Volatility:
9.51%
Yearly Volatility:
32.95%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.03%
Volatility in last five trading days has been 89.34% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.33%
Weekly VaR:
-9.68%
Monthly VaR:
-19.35%
How Much Can the price of
PSEC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-67.04%
This translates to price declining to:
$6.14
This translates to price declining to:
$2.43
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PSEC is a 36.60% riskier investment compared to the market/S&P 500 & is 17.02% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -18.16% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PSEC
Beta in relation to market/S&P 500--0.86
Expected beta in 1 year's time:
0.757
Expected beta in 3 year's time:
1.071
Unlevered (debt free) Beta:
-
Beta in relation to Nasdaq (XNAS):
0.545
Beta in relation to all global stocks::
0.509
Beta Comparison & Analysis
Beta of competitors/peers::
1.278
Beta is -32.90% lower than peers
Average Industry Beta:
1.694
Beta is -49.37% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
16.30%
Sustainable growth rate is -42.17% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.006
Alpha is -110.24% below industry average alpha yield
Alpha is 36% compared to market & is healthy
Analysis of Cost of Capital of
PSEC
Equity cost of capital:
0.090
Equity cost of capital is -38.83% below industry mean WACC
Unlevered (without debt) cost of capital:
-
Before-tax cost of debt:
5.43%
After-tax cost of debt:
4.29%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.29%
WACC is 1.93% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.27
Revenue growth rate per share of (3Y):
0.67
Annual revenue growth rate is 72.69% above the industry average
EPS:
$2.08
Expected Annual growth rate of EPS (3Y):
81.71%
Expected future EPS growth rate is 194.21% higher than the Asset Management industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -27.68%
Equity growth rate per share is -230.99% lower than the industry
Debt per share
$5.29
EBITDA per share
$2.49
Valuation Analysis Today of
PSEC
P/E Ratio:
5.45
P/E Ratio of Competitors/Peers:
19.79
P/E ratio is -72.46% lower than main peers & is -66.26% lower than the industry
Stock price/value with industry average P/E ratio: $33.59
PSEC is -78.06% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $45.82
Present value of the expected future dividends only: $2.66
P/S (Price to Sales ratio):
3.25
Price to sales ratio is -52.51% below the industry mean
P/B (Price to book value ratio):
0.67
-
-
Net income growth rate (3Y):
204.15%
Net income growth rate is 40.43% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 8.04%
Dividend yeild: 3.26%
Previous Dividend: $0.06
Previous adjusted dividend: $0.06
Previous Dividend: $0.24
-
-
Average dividend payment (long-term): $0.06
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 18/10/2022
Expected next dividend record date: 26/09/2022
-
Previous dividend payment date: 20/07/2022
Previous dividend record date: 28/06/2022
-
Dividend History:
2022-06-27--$0.06
2022-04-26--$0.06
2022-02-23--$0.06
2022-05-26--$0.06
2022-03-28--$0.06
2022-01-26--$0.06
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
48.25%
Net debt to equity ratio:
47.27%
Debt to assets ratio:
31.99%
Net debt to assets ratio:
31.34%
Debt-to-asset ratio is -38.80% below industry average
Ability to repay debt:
Interest coverage ratio:
8.66
Interest coverage ratio is -85.43% less than industry average
Looking forward:
Debt growth rate:
4.46%
Annual debt growth is -164% lower than industry average debt growth rate
Debt repayment rate in last quarter: 31.51%
Analysis of Key Statistics
Correlation of price movement with the market:
0.549
Statistical significance of correlation:
PSEC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.576
Stock price is -4.65% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.576
Correlation of price movement with Nasdaq (^IXIC):
0.05
Covariance of price movement with the market:
0.062
Kurtosis
8.287
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.583
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
PSEC
Gross Profit Margin Ratio:
200%
Operating Profit Margin Ratio:
43.43%
Operating profit margin is -7.66% lower than the industry
Net Profit Margin Ratio:
200%
Effective Tax Rate:
-
-
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.49%
Return on equity (ROE) is -26.87% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.26%
Return on assets (ROA) is 110.05% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
14.53
Current ratio is 278.75% above industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 22.1 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
PSEC
CORVEL CORPORATION (XNAS:CRVL)
VALLEY NATIONAL BANCORP (XNAS:VLYPO)
FIRST CITIZENS BANCSHARES, INC. (XNAS:FCNCP)
TEXAS CAPITAL BANCSHARES, INC. (XNAS:TCBI)
THE BEAUTY HEALTH COMPANY (XNAS:SKIN)
AGCUU
INDEPENDENT BANK GROUP, INC. (XNAS:IBTX)
OLD NATIONAL BANCORP (XNAS:ONB)
CATHAY GENERAL BANCORP (XNAS:CATY)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�13%
Sell�0%
Strong sell�8%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
890.58M
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:
-
408.11M
-
23.79M
23.79M
-
109.30M
133.09M
568.59M
112.91M
68.68M
978.02M
386.82M
796.44M
796.44M
-
796.44M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 1162.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 221084.00K
Net Cash Provided by Operating Activities:
- 10115.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
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):
9/30/21
2022
Q1
42.16M
-
42.16M
13.30M
-
-
-
-
-
-
6.43B
-
-
-
6.50B
6.50B
38.47M
-
-
-
-
-
2.08B
-
2.08B
4.27B
2.19B
390.00K
- 92978.00K
-
4.04B
September 30, 2021 at 6:00:00 AM
-
4.31B
6.50B
-
2.08B
2.0B
-
-
-
- 956094.00K
-
-
- 64034.00K
1.01B
- 11339.00K
-
- 21454.00K
42.16M
63.61M
- 10115.00K
-
- 10115.00K
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
PSEC
2023
2024
2025
2026
2027
$7.83
$30.37
$32.12
$33.97
$35.93