Left Brain Wealth Management LLC Makes New $2.05 Million Investment in Ares Capital Corporation $ARCC

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

Other large investors have also recently added to or reduced their stakes in the company. Van ECK Associates Corp lifted its stake in shares of Ares Capital by 22.2% during the second quarter. Van ECK Associates Corp now owns 13,306,095 shares of the investment management company’s stock worth $246,562,000 after purchasing an additional 2,418,984 shares in the last quarter. Strs Ohio purchased a new stake in shares of Ares Capital in the first quarter worth about $189,210,000. Bank of America Corp DE purchased a new stake in shares of Ares Capital in the second quarter worth about $165,569,000. Generali Asset Management SPA SGR grew its stake in shares of Ares Capital by 5.3% in the third quarter. Generali Asset Management SPA SGR now owns 7,950,908 shares of the investment management company’s stock valued at $151,862,000 after buying an additional 402,913 shares in the last quarter. Finally, Legal & General Group Plc acquired a new stake in shares of Ares Capital in the second quarter valued at about $120,538,000. 27.38% of the stock is currently owned by institutional investors and hedge funds.

Ares Capital News Roundup

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

Analyst Upgrades and Downgrades

Several brokerages recently commented on ARCC. Citigroup reiterated a “market outperform” rating on shares of Ares Capital in a report on Wednesday. Weiss Ratings restated a “hold (c)” rating on shares of Ares Capital in a report on Friday, September 4th. Wall Street Zen downgraded shares of Ares Capital from a “hold” rating to a “sell” rating in a research report on Saturday. Truist Financial lowered their price objective on shares of 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, Keefe, Bruyette & Woods dropped their price objective on shares of Ares Capital from $21.00 to $20.00 and set an “outperform” rating on the stock in a research note on Thursday, July 30th. Nine investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. According to MarketBeat, Ares Capital presently has a consensus rating of “Moderate Buy” and an average target price of $20.39.

Ares Capital Stock Down 0.1%

Shares of Ares Capital stock opened at $19.11 on Friday. The business has a 50-day moving average of $19.22 and a 200-day moving average of $19.03. The company has a debt-to-equity ratio of 1.08, a current ratio of 1.00 and a quick ratio of 1.28. The company has a market capitalization of $13.80 billion, a PE ratio of 15.66 and a beta of 0.61. Ares Capital Corporation has a 1-year low of $17.40 and a 1-year high of $21.14.

Ares Capital (NASDAQ:ARCC) last announced its 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). Ares Capital had a return on equity of 9.72% and a net margin of 28.34%. The business had revenue of $763.00 million for the quarter, compared to analysts’ expectations of $776.34 million. During the same period in the previous year, the firm posted $0.50 earnings per share. The firm’s revenue was down 2.4% compared to the same quarter last year. As a group, equities analysts forecast that Ares Capital Corporation will post 1.88 EPS for the current fiscal year.

Ares Capital Announces Dividend

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

Ares Capital Profile

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.