Bull’s Eye Report: Prospect Capital (PSEC)

Buy this stock at current levels or on a pullback to $11.15

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Prospect Capital Corp PSEC Asset Management & Custody Banks 9.3 +3.18% $11.08

Why We Like The Stock:

Prospect Capital Corp. (NASDAQ:PSEC) is our most compelling buy today due to the fact that it is a top rated stock in the Financials sector, which has been a strong performer in 2013 thus far. Since its November lows, PSEC has been trending steadily upward from ~$9.90 up to its current price at $11.30, making higher highs and higher lows during the uptrend. The stock is also in the process of filling its early November gap down, which gives it a short-term upside to the $11.50 range. In addition to the positive technical set-up, PSEC has also had some decent insider buying momentum the past few weeks, which is usually a good underpin for a rallying stock. We like PSEC at its current price and would hold until the gap is filled, which gives the stock a quick 2% upside.

We Would Be Buyers:

At the current price (~$11.30), or on a pullback to $11.15.

Company Profile:

Prospect Capital Corporation is a financial services company, which lends to and invests in middle market privately-held companies. The Company is a closed-end investment company. It invests in senior and subordinated debt and equity of companies in need of capital for acquisitions, divestitures, growth, development and recapitalization. We work with the management teams or financial sponsors to seek investments with historical cash flows, asset collateral or contracted pro-forma cash flows. Its investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Stock Rating:

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Prospect Capital Corp.: Last Three Months

psec 11 300x168 Bulls Eye Report: Prospect Capital (PSEC)
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Prospect Capital Corp.: Last 12 Months

psec 2 300x168 Bulls Eye Report: Prospect Capital (PSEC)
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Prospect Capital Corp.: Last Five Years

psec 3 300x168 Bulls Eye Report: Prospect Capital (PSEC)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.

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