Oaktree Specialty Lending (NASDAQ:OCSL) Posts Quarterly Earnings Results, Beats Expectations By $0.02 EPS

Oaktree Specialty Lending (NASDAQ:OCSL) announced its earnings results on Tuesday. The credit services provider reported $0.38 EPS for the quarter, beating the consensus estimate of $0.36 by $0.02, FiscalAI reports. The company had revenue of $69.74 million for the quarter, compared to analyst estimates of $74.35 million. Oaktree Specialty Lending had a return on equity of 9.75% and a net margin of 10.58%.During the same quarter in the prior year, the company earned $0.45 EPS.

Here are the key takeaways from Oaktree Specialty Lending’s conference call:

• Non-accruals declined to 2.6% of the debt portfolio (from 3.1% last quarter and 4.6% a year ago); post-quarter sales of legacy non-accruals (Dominion Diagnostics, All Web Leads) generated cash and the firm expects further reductions and redeployments into performing assets.
• Net asset value fell to $15.69 per share (from $16.30) driven mainly by ~310 bps markdowns in software loans and spread widening, which management attributes to market repricing rather than fundamental deterioration.
• liquidity was increased to $671 million (including a $620 million undrawn facility) and net leverage was reduced to 1.04x after selling some liquid positions at cost, positioning OCSL to deploy into new loans that are pricing wider (roughly SOFR+500–550) with a weighted average new-deal yield of ~9.2%.
• The board adjusted the dividend policy by setting a new conservative base dividend of $0.30 per share (supplemental dividend remains 50% of excess ANII), although the quarter’s total cash dividend declared was $0.34.

Oaktree Specialty Lending Stock Down 5.7%

Oaktree Specialty Lending stock traded down $0.74 during midday trading on Tuesday, reaching $12.17. The stock had a trading volume of 995,386 shares, compared to its average volume of 907,841. Oaktree Specialty Lending has a 12 month low of $10.63 and a 12 month high of $14.77. The company has a market capitalization of $1.07 billion, a P/E ratio of 33.79 and a beta of 0.52. The company has a fifty day moving average price of $11.73 and a two-hundred day moving average price of $12.61. The company has a current ratio of 0.16, a quick ratio of 0.16 and a debt-to-equity ratio of 0.66.

Oaktree Specialty Lending Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Monday, March 16th were given a $0.40 dividend. This represents a $1.60 dividend on an annualized basis and a yield of 13.2%. The ex-dividend date of this dividend was Monday, March 16th. Oaktree Specialty Lending’s payout ratio is presently 444.44%.

Insider Buying and Selling

In other news, Director Phyllis R. Caldwell bought 2,500 shares of the firm’s stock in a transaction that occurred on Monday, March 16th. The stock was acquired at an average cost of $10.77 per share, with a total value of $26,925.00. Following the transaction, the director directly owned 23,500 shares of the company’s stock, valued at approximately $253,095. This represents a 11.90% increase in their position. The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 0.29% of the stock is owned by insiders.

Institutional Trading of Oaktree Specialty Lending

Several institutional investors and hedge funds have recently modified their holdings of the stock. Running Point Capital Advisors LLC lifted its holdings in shares of Oaktree Specialty Lending by 3.1% in the fourth quarter. Running Point Capital Advisors LLC now owns 28,789 shares of the credit services provider’s stock valued at $367,000 after purchasing an additional 877 shares in the last quarter. NewEdge Advisors LLC raised its position in Oaktree Specialty Lending by 14.0% in the 3rd quarter. NewEdge Advisors LLC now owns 14,787 shares of the credit services provider’s stock valued at $193,000 after buying an additional 1,815 shares during the last quarter. Guggenheim Capital LLC raised its position in Oaktree Specialty Lending by 9.1% in the 4th quarter. Guggenheim Capital LLC now owns 39,499 shares of the credit services provider’s stock valued at $503,000 after buying an additional 3,309 shares during the last quarter. Northwestern Mutual Wealth Management Co. bought a new position in Oaktree Specialty Lending during the 4th quarter valued at $42,000. Finally, Tower Research Capital LLC TRC boosted its holdings in Oaktree Specialty Lending by 1,025.1% during the 2nd quarter. Tower Research Capital LLC TRC now owns 4,163 shares of the credit services provider’s stock worth $57,000 after acquiring an additional 3,793 shares during the last quarter. 36.79% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on OCSL shares. Wall Street Zen upgraded shares of Oaktree Specialty Lending from a “sell” rating to a “hold” rating in a research report on Saturday, April 11th. Zacks Research raised shares of Oaktree Specialty Lending from a “strong sell” rating to a “hold” rating in a research note on Monday, April 6th. JPMorgan Chase & Co. dropped their price objective on shares of Oaktree Specialty Lending from $13.50 to $10.50 and set a “neutral” rating on the stock in a report on Friday, March 13th. Wells Fargo & Company dropped their price objective on shares of Oaktree Specialty Lending from $13.00 to $12.00 and set an “equal weight” rating on the stock in a report on Thursday, February 5th. Finally, Weiss Ratings raised Oaktree Specialty Lending from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Wednesday, April 15th. Six equities research analysts have rated the stock with a Hold rating, According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus price target of $12.17.

Oaktree Specialty Lending Company Profile

Oaktree Specialty Lending Corporation (NASDAQ: OCSL) is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.