Stellus Capital Investment (SCM) Cut to “Hold” at Zacks Investment Research

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Zacks Investment Research downgraded shares of Stellus Capital Investment (NYSE:SCM) from a buy rating to a hold rating in a research note issued to investors on Wednesday.

According to Zacks, “Stellus Capital Investment Corporation is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private middle-market companies. “

A number of other equities research analysts also recently issued reports on the stock. ValuEngine raised shares of Stellus Capital Investment from a sell rating to a hold rating in a research report on Tuesday, September 4th. Keefe, Bruyette & Woods reaffirmed a hold rating and issued a $14.00 price objective on shares of Stellus Capital Investment in a research report on Thursday, August 9th. Finally, TheStreet downgraded shares of Stellus Capital Investment from a b rating to a c+ rating in a research report on Wednesday, July 11th.

SCM opened at $12.91 on Wednesday. Stellus Capital Investment has a fifty-two week low of $11.07 and a fifty-two week high of $14.29. The company has a current ratio of 0.21, a quick ratio of 0.21 and a debt-to-equity ratio of 0.78. The stock has a market capitalization of $217.61 million, a P/E ratio of 10.67 and a beta of 0.56.

Stellus Capital Investment (NYSE:SCM) last issued its quarterly earnings data on Wednesday, August 8th. The investment management company reported $0.30 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.31 by ($0.01). Stellus Capital Investment had a return on equity of 8.16% and a net margin of 59.39%. The firm had revenue of $12.62 million during the quarter, compared to the consensus estimate of $12.21 million. Equities analysts forecast that Stellus Capital Investment will post 1.27 EPS for the current fiscal year.

The company also recently disclosed a monthly dividend, which was paid on Friday, September 14th. Shareholders of record on Friday, August 31st were given a $0.1133 dividend. This represents a $1.36 dividend on an annualized basis and a yield of 10.53%. The ex-dividend date was Thursday, August 30th. Stellus Capital Investment’s payout ratio is 112.40%.

A number of hedge funds have recently modified their holdings of SCM. LPL Financial LLC bought a new stake in Stellus Capital Investment in the 1st quarter worth about $138,000. Stephens Inc. AR bought a new position in shares of Stellus Capital Investment during the 2nd quarter valued at approximately $257,000. Gables Capital Management Inc. bought a new position in shares of Stellus Capital Investment during the 1st quarter valued at approximately $1,532,000. Finally, Freestone Capital Holdings LLC grew its position in shares of Stellus Capital Investment by 37.2% during the 1st quarter. Freestone Capital Holdings LLC now owns 318,254 shares of the investment management company’s stock valued at $3,663,000 after acquiring an additional 86,252 shares during the period. 21.45% of the stock is owned by institutional investors and hedge funds.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.

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