NEW YORK—Kristin Lea Van Dask, the Chief Financial Officer, Treasurer, Secretary, and Chief Compliance Officer of Prospect Capital Corp (NASDAQ:), recently acquired a total of 15,200 shares of the company’s common stock. The transactions, which took place on November 12, 2024, were executed at a price of $4.29 per share, amounting to a total value of $65,208.
The acquisition was divided into two separate transactions. The first involved the purchase of 9,400 shares, with ownership noted as indirect, held by Van Dask’s spouse. The second transaction saw the acquisition of 5,800 shares, which are held directly and jointly with Van Dask’s spouse, as indicated in the filing footnotes.
Following these transactions, Van Dask’s total direct and indirect shareholding in Prospect Capital Corp increased, reflecting her continued investment in the company.
In other recent news, Prospect Capital Corporation has increased its preferred stock offering from $2 billion to $2.25 billion, indicating strong market demand. This move has involved reclassifying 20 million shares from common to preferred stock. Concurrently, Wells Fargo (NYSE:) has revised its price target for Prospect Capital, downgrading it from $5.00 to $4.50. This adjustment is due to a lower Secured Overnight Financing Rate (SOFR) curve and an expected increase in shares due to the conversion of preferred stocks.
Despite these adjustments, Prospect Capital reported strong earnings for the fourth quarter of the fiscal year 2024, with a net investment income of $102.9 million and a net asset value of $3.71 billion. The company has emphasized its strong balance sheet, diversified funding sources, and significant liquidity, along with a strategic shift towards first lien debt. In addition, Prospect Capital clarified that there are no ongoing discussions about forced conversions of preferred stock by the company’s board.
These recent developments suggest that Prospect Capital is making strategic decisions to maintain shareholder distributions and strengthen its investment portfolio. The company’s ability to tap into the unsecured term debt market to extend liability duration and reduce counterparty risk has been noted by analysts, further highlighting its strategic approach to managing its financial health.
InvestingPro Insights
The recent insider buying by Kristin Lea Van Dask comes at a time when Prospect Capital Corp (NASDAQ:PSEC) is facing some challenges. According to InvestingPro data, the company’s stock has taken a significant hit, with a 1-week price total return of -18.16% and a 1-month return of -15.29%. This downturn aligns with an InvestingPro Tip indicating that the stock has fared poorly over the last month.
Despite these short-term setbacks, PSEC maintains a substantial dividend yield of 12.62%, which is consistent with another InvestingPro Tip highlighting that the company pays a significant dividend to shareholders. This high yield may be particularly attractive to income-focused investors, especially considering that PSEC has maintained dividend payments for 21 consecutive years.
However, investors should note that the company’s financial health presents a mixed picture. The negative P/E ratio of -17.7 and the InvestingPro Tip stating that PSEC is not profitable over the last twelve months suggest ongoing profitability challenges. This context makes Van Dask’s insider buying particularly interesting, as it may signal confidence in the company’s future prospects despite current headwinds.
For a more comprehensive analysis, InvestingPro offers 8 additional tips for PSEC, which could provide valuable insights for investors considering the stock in light of recent insider activity and market performance.
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