(PSEC) Prospect Capital - Ratings and Ratios

Prospect Capital Corporation (NASDAQ:PSEC) is a business development company specializing in a wide range of investment strategies, including middle market, mezzanine finance, later-stage investments, and leveraged buyouts. The firm focuses on secured debt, senior debt, unitranche debt, first-lien and second-lien loans, private debt, and equity investments in private and microcap public businesses. It prioritizes primary origination and secondary loans/portfolios, targeting debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, and bridge loans. The company also invests in real estate, particularly in multi-family residential assets, and engages in capital expenditures for collateralized loan obligations.

The fund primarily invests in small to medium-sized private companies across various industry sectors, with a strong emphasis on energy and industrials. Its sector expertise spans aerospace, defense, chemicals, consumer services, ecological industries, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles, and transportation. Additionally, it focuses on oil and gas production, coal production, materials, consumer discretionary, information technology, utilities, renewable energy, and oilfield services. The company prefers investments in the United States and Canada, targeting transactions between $10 million and $500 million in companies with EBITDA ranging from $5 million to $150 million.

The stock (NASDAQ:PSEC) exhibits a bearish trend, with its price of $3.57 sitting below its 20-day SMA of $3.60, 50-day SMA of $3.95, and 200-day SMA of $4.39. The Average True Range (ATR) of 0.12 indicates moderate volatility. Over the next three months, expect continued weakness as the stock struggles to reclaim its short-term moving averages. The low ATR suggests narrow trading ranges, with potential resistance at $3.95 and support at $3.30. Fundamental analysis highlights a price-to-book ratio of 0.48, signaling undervaluation, but the return on equity of 0.79% reflects subdued profitability. The forward P/E remains undefined, adding uncertainty to the valuation narrative.