National Securities cut shares of Fifth Street Finance (NASDAQ:OCSL) from a buy rating to a neutral rating in a report published on Friday. National Securities currently has $5.00 price target on the credit services provider’s stock, down from their previous price target of $7.00.
“• Oaktree posted NII/share of $0.08 for fiscal 4Q17, short of our $0.13/share estimate and the $0.125/share dividend. Notably, interest income was down substantially Q/Q to $31.4 million from $38.8 million and we expect the increase in non-accruals at cost drove the majority of the decline although the portfolio at cost decreased by $132.2 million.
• Non-accruals at amortized cost (which includes PIK non-accruals) jumped to $255.2 million from $190.5 million linked Q/Q or to 14.5% of the portfolio at amortized cost from 10.1%. Two new portfolio companies were added to non-accrual status during the quarter: Ameritox and Advanced Pain Management while previous non-accrual ERS Acquisition Corp. was restructured mostly in-line with the 6/30/17 mark at a realized loss of around $34.0 million.
• Although the same dividend was declared for the 12/31/17 quarter, management gave some rather opaque guidance on the dividend going forward. We assume that the part 1 incentive fee is not earned until fiscal 4Q18 but nonetheless think the run rate of NII/share will be $0.10 and force a dividend reduction to $0.09/share beginning in the quarter ending 3/31/18.
• We are revising our fiscal 2018 NII/share estimate to $0.41 from $0.56 and are rolling out our fiscal 2019 NII/share estimate of $0.40. ,” the firm’s analyst commented.
Several other equities research analysts have also recently issued reports on the stock. Zacks Investment Research upgraded shares of Fifth Street Finance from a hold rating to a buy rating and set a $6.50 target price on the stock in a report on Tuesday, November 7th. J P Morgan Chase & Co raised their target price on shares of Fifth Street Finance from $5.50 to $6.00 and gave the stock a neutral rating in a report on Wednesday, November 1st. Keefe, Bruyette & Woods restated a hold rating and issued a $6.00 target price on shares of Fifth Street Finance in a report on Monday, October 16th. BMO Capital Markets restated a hold rating and issued a $4.00 target price on shares of Fifth Street Finance in a report on Friday, October 6th. Finally, BidaskClub upgraded shares of Fifth Street Finance from a hold rating to a buy rating in a report on Wednesday, October 4th. One analyst has rated the stock with a sell rating, seven have given a hold rating and four have issued a buy rating to the company. Fifth Street Finance has an average rating of Hold and a consensus price target of $5.63.
Fifth Street Finance (NASDAQ:OCSL) last announced its quarterly earnings results on Wednesday, November 29th. The credit services provider reported $0.08 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.13 by ($0.05). The firm had revenue of $35.73 million for the quarter. Fifth Street Finance had a negative net margin of 110.68% and a positive return on equity of 7.40%. research analysts forecast that Fifth Street Finance will post 0.42 EPS for the current fiscal year.
In other news, major shareholder Leonard M. Tannenbaum sold 1,409,606 shares of Fifth Street Finance stock in a transaction on Thursday, October 19th. The shares were sold at an average price of $5.56, for a total transaction of $7,837,409.36. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Bernard D. Berman sold 20,000 shares of Fifth Street Finance stock in a transaction on Friday, September 29th. The stock was sold at an average price of $5.43, for a total transaction of $108,600.00. Following the transaction, the chief executive officer now owns 35,968 shares in the company, valued at approximately $195,306.24. The disclosure for this sale can be found here. Company insiders own 0.14% of the company’s stock.
An institutional investor recently bought a new position in Fifth Street Finance stock. Hillsdale Investment Management Inc. purchased a new position in shares of Fifth Street Finance Corp. (NASDAQ:OCSL) during the 3rd quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm purchased 23,600 shares of the credit services provider’s stock, valued at approximately $129,000. Hedge funds and other institutional investors own 35.12% of the company’s stock.
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Fifth Street Finance Company Profile
Oaktree Specialty Lending Corporation, formerly Fifth Street Finance Corp., is a specialty finance company. The Company is a closed-end, non-diversified management investment company. The Company acts as a business development company (BDC). The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments, and capital appreciation from its equity investments.
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