Stellus Capital Investment (NYSE:SCM) Cut to “Strong Sell” at Zacks Research

Zacks Research cut shares of Stellus Capital Investment (NYSE:SCM) from a hold rating to a strong sell rating in a research report released on Thursday,Zacks.com reports.

Several other brokerages have also issued reports on SCM. Keefe, Bruyette & Woods dropped their price target on Stellus Capital Investment from $13.00 to $9.00 and set a “market perform” rating for the company in a research note on Monday, March 16th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Stellus Capital Investment in a research note on Monday, December 29th. Two investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of “Reduce” and a consensus price target of $9.00.

Stellus Capital Investment Price Performance

NYSE:SCM opened at $10.04 on Thursday. The firm has a market capitalization of $290.51 million, a price-to-earnings ratio of 10.68 and a beta of 0.67. Stellus Capital Investment has a 52-week low of $8.43 and a 52-week high of $15.39. The stock has a fifty day moving average of $9.89 and a 200 day moving average of $11.55. The company has a debt-to-equity ratio of 1.13, a quick ratio of 0.14 and a current ratio of 0.14.

Stellus Capital Investment (NYSE:SCM) last posted its quarterly earnings data on Wednesday, March 11th. The investment management company reported $0.29 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.31 by ($0.02). Stellus Capital Investment had a net margin of 26.48% and a return on equity of 10.28%. The business had revenue of $23.98 million for the quarter, compared to the consensus estimate of $26.33 million. On average, research analysts expect that Stellus Capital Investment will post 1.74 EPS for the current fiscal year.

Stellus Capital Investment Announces Dividend

The company also recently declared a monthly dividend, which will be paid on Wednesday, July 15th. Shareholders of record on Tuesday, June 30th will be paid a dividend of $0.1133 per share. The ex-dividend date of this dividend is Tuesday, June 30th. This represents a c) annualized dividend and a yield of 13.5%. Stellus Capital Investment’s payout ratio is 144.68%.

Insiders Place Their Bets

In other news, CFO W. Todd Huskinson purchased 5,700 shares of the company’s stock in a transaction on Friday, March 13th. The stock was purchased at an average price of $8.79 per share, with a total value of $50,103.00. Following the completion of the purchase, the chief financial officer directly owned 54,297 shares in the company, valued at approximately $477,270.63. This trade represents a 11.73% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, Director Bruce R. Bilger bought 45,490 shares of the stock in a transaction dated Friday, March 13th. The stock was bought at an average cost of $8.74 per share, with a total value of $397,582.60. Following the purchase, the director owned 228,055 shares in the company, valued at $1,993,200.70. The trade was a 24.92% increase in their position. The SEC filing for this purchase provides additional information. Insiders bought a total of 87,890 shares of company stock valued at $766,551 over the last 90 days. Insiders own 3.99% of the company’s stock.

Institutional Investors Weigh In On Stellus Capital Investment

A number of hedge funds and other institutional investors have recently modified their holdings of SCM. Geneos Wealth Management Inc. bought a new stake in shares of Stellus Capital Investment in the 2nd quarter valued at about $25,000. Laurel Wealth Advisors LLC bought a new stake in shares of Stellus Capital Investment in the 4th quarter valued at about $26,000. JPMorgan Chase & Co. bought a new stake in shares of Stellus Capital Investment in the 3rd quarter valued at about $28,000. BNP Paribas Financial Markets bought a new stake in shares of Stellus Capital Investment in the 2nd quarter valued at about $60,000. Finally, Kestra Advisory Services LLC bought a new stake in shares of Stellus Capital Investment in the 4th quarter valued at about $62,000. Institutional investors own 13.22% of the company’s stock.

About Stellus Capital Investment

Stellus Capital Investment Corporation (NYSE: SCM) is a closed-end, externally managed business development company that provides debt and equity financing to middle market companies in the United States. As an investment vehicle specializing in private credit, Stellus focuses on originating and structuring senior secured loans, unitranche facilities, mezzanine debt, and equity co-investments tailored to the unique needs of growing businesses. Its flexible capital solutions are designed to support acquisitions, recapitalizations, growth initiatives, and balance sheet refinancings.

Operating under an evergreen structure, Stellus Capital Investment partners with a diverse group of portfolio companies across industries such as manufacturing, healthcare, business services, and specialty finance.