Left Brain Wealth Management LLC Makes New Investment in Ares Capital Corporation $ARCC

Left Brain Wealth Management LLC acquired a new position in shares of Ares Capital Corporation (NASDAQ:ARCC) in the 3rd quarter, according to its most recent Form 13F filing with the SEC. The firm acquired 107,326 shares of the investment management company’s stock, valued at approximately $2,050,000.

Other hedge funds and other institutional investors also recently modified their holdings of the company. Fortitude Family Office LLC raised its stake in shares of Ares Capital by 145.2% in the 3rd quarter. Fortitude Family Office LLC now owns 1,297 shares of the investment management company’s stock valued at $25,000 after purchasing an additional 768 shares in the last quarter. Orion Capital Management LLC bought a new position in shares of Ares Capital during the second quarter worth about $25,000. Continuum Advisory LLC acquired a new position in Ares Capital in the second quarter worth about $30,000. TOP Private Wealth LLC. acquired a new position in Ares Capital in the second quarter worth about $31,000. Finally, MADDEN SECURITIES Corp acquired a new position in Ares Capital in the third quarter worth about $46,000. Institutional investors own 27.38% of the company’s stock.

Key Stories Impacting Ares Capital

Here are the key news stories impacting Ares Capital this week:

• Positive Sentiment: UBS upgraded ARCC to “Buy” and set a $21 price target, implying roughly 10% upside from the referenced share price. The upgrade supports the bullish case that ARCC’s valuation and income profile remain attractive. UBS upgrade coverage
• Positive Sentiment: B. Riley Securities reiterated its Buy rating, indicating continued confidence in ARCC’s ability to generate shareholder returns despite recent earnings softness. B. Riley Buy rating
• Positive Sentiment: ARCC’s planned acquisition of MidCap Financial Investment Corporation (NASDAQ: MFIC) could expand its investment platform and portfolio scale. MFIC canceled its upcoming earnings call because of the pending transaction, confirming the deal is progressing. MidCap acquisition announcement
• Neutral Sentiment: Articles discussing the tax treatment of high-yield BDC dividends may increase investor awareness of ARCC’s ordinary-income taxation, but they do not represent a change in the company’s fundamentals or dividend policy. Dividend tax article
• Negative Sentiment: Third-quarter core EPS and net investment income declined to $0.46, below the $0.48 quarterly dividend and analysts’ $0.48 earnings estimate. Revenue also fell year over year, raising concerns about sustainable dividend coverage. Ares Capital third-quarter results
• Negative Sentiment: Analysts also pointed to a fourth consecutive quarterly decline in NAV and increased non-accrual investments. These credit-quality trends, combined with the earnings shortfall, led to a more cautious “Hold” view from some coverage despite ARCC trading below book value. Ares Capital Hold analysis

Analysts Set New Price Targets

Several analysts recently weighed in on ARCC shares. UBS Group raised Ares Capital from a “neutral” rating to a “buy” rating and set a $21.00 price objective for the company in a report on Thursday. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Ares Capital in a report on Friday, September 4th. Wall Street Zen lowered Ares Capital from a “hold” rating to a “sell” rating in a research report on Saturday. Truist Financial decreased their target price on Ares Capital from $22.00 to $21.00 and set a “buy” rating for the company in a research report on Thursday, July 30th. Finally, Citigroup reissued a “market outperform” rating on shares of Ares Capital in a research report on Wednesday. Nine analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, Ares Capital has a consensus rating of “Moderate Buy” and a consensus price target of $20.39.

Ares Capital Price Performance

NASDAQ ARCC opened at $19.11 on Friday. The company has a 50-day moving average price of $19.22 and a two-hundred day moving average price of $19.03. Ares Capital Corporation has a 52 week low of $17.40 and a 52 week high of $21.14. The stock has a market cap of $13.80 billion, a price-to-earnings ratio of 15.66 and a beta of 0.61. The company has a current ratio of 1.00, a quick ratio of 1.28 and a debt-to-equity ratio of 1.08.

Ares Capital (NASDAQ:ARCC) last announced its quarterly earnings results on Tuesday, October 27th. The investment management company reported $0.46 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.48 by ($0.02). The business had revenue of $763.00 million for the quarter, compared to analyst estimates of $776.34 million. Ares Capital had a return on equity of 9.72% and a net margin of 28.34%. The company’s revenue was down 2.4% compared to the same quarter last year. During the same quarter last year, the firm posted $0.50 EPS. Analysts forecast that Ares Capital Corporation will post 1.88 EPS for the current year.

Ares Capital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 29th. Stockholders of record on Tuesday, December 15th will be paid a $0.48 dividend. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.0%. The ex-dividend date of this dividend is Tuesday, December 15th. Ares Capital’s payout ratio is currently 157.38%.

About Ares Capital

Ares Capital Corporation (NASDAQ: ARCC) is a business development company that provides financing to middle-market companies. The company primarily invests in first-lien senior secured loans, second-lien loans, subordinated debt, and, to a lesser extent, equity securities. Its investments are generally designed to support acquisitions, recapitalizations, refinancings, growth initiatives, and other corporate activities.

Founded in 2004, Ares Capital is externally managed by Ares Capital Management LLC, an affiliate of Ares Management Corporation.