In a report released today, Chris Kotowski from Oppenheimer maintained a Buy rating on Stellus Capital (NYSE: SCM), with a price target of $15. The company’s shares opened today at $13.35.
Kotowski observed:
“The most encouraging sign this quarter was the continuation of substantial asset growth. Coming off last April’s 2.75M share offering, Stellus responded with $59.5M Q/Q portfolio growth in 1Q18, and $68.4M in 2Q18. Due to the share hurdle, we had expected dividend coverage would be tight this quarter. SCM reported NII was $0.30, and core net interest income of $0.33 (excluding $0.02 incentive fee on unrealized capital gains), while slightly short of its dividend of $0.34, was better than our $0.31 estimate. It is likely that dividend coverage out of net investment income (NII) will be tight over the next quarter or two, but it would be much more comfortable in 2019.”
According to TipRanks.com, Kotowski is a 5-star analyst with an average return of 11.7% and a 69.8% success rate. Kotowski covers the Financial sector, focusing on stocks such as Eagle Point Credit Company Inc, Great Elm Capital Corporation, and Fidus Investment Corporation.
Stellus Capital has an analyst consensus of Moderate Buy, with a price target consensus of $15.
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The company has a one-year high of $14.29 and a one-year low of $11.07. Currently, Stellus Capital has an average volume of 95.99K.
Based on the recent corporate insider activity of 21 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SCM in relation to earlier this year.
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Stellus Capital Investment Corp. is an an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company. It develops company which seeks investment opportunities in middle market companies located in The US and Canada.
