Here’s how investors should make decisions about buying, holding or selling Ares Capital Corporation (NASDAQ:ARCC) stock. On Wednesday, shares of Ares Capital Corporation (NASDAQ:ARCC) closed higher after an active session. The shares accumulated 0.07 points or 0.4 percent at $17.5 with a heavy trade volume of 2.724 million shares. After opening the session at $17.47, the shares went as high as $17.55 and as low as $17.43, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $7.46 billion and now has 426.3 million shares outstanding. Ares Capital Corporation (ARCC) stock has gained 3.98 percent of market value in 21 trading days.
ARCC stock has a trailing 3-year beta of 0, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.86 a share in the trailing twelve months. The stock’s value has surged 11.32 percent year to date (YTD) against a rise of 8.09 percent in 12 month’s time. The company’s shares still trade -0.48 percent away from its 1-year high of $17.58 and 16.43 percent up from 52-week low of $15.03. The average consensus rating on the company is 1.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.
Ares Capital Corporation (ARCC) will probably climb 5.54 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $20-month high price target. This represents a whopping 14.29 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $18.5, which represents a return potential of 5.71 percent when compared to the closing price of the stock of $17.5 on Wednesday, November 07. The lowest price target for the stock is $17 — slightly more than -2.86 percent from ARCC’s current share price.
History has shown that shares in Ares Capital Corporation have gone up on 20 different earnings reaction days and are predicted to add 0.01 percent when the company reports upcoming earnings. Investors will get their next glimpse of ARCC’s Q4 earnings on February 27. Analysts are forecasting revenue to climb 6.2 percent to $326M in the fiscal fourth quarter, while earnings are seen soaring by nearly 7.89 percent to $0.41 per share. It earned $0.45 per share, better than the $0.4, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $342M, better than the $319M analysts expected. Earnings are estimated to increase by 17.3 percent this year, 4.9 percent next year and continue to increase by 3 percent annually for the next 5 years.
Let’s take a look at some insider activity at Ares Capital Corporation (NASDAQ:ARCC) and see the pattern. The earliest insider trade took place on 10/22/2018. Bartlett Steve gathered a total of 0.2 thousand shares of company at average share price of $16.3. The total for the purchase was set at $3.26 thousand. After this transaction, the Director account balance stood at 10.4 thousand shares. The stock grew 6.93 percent since that insider purchase. On 09/20/2018, Bartlett Steve, Director, purchased 0.2 thousand shares at a price per share of $17.18. This added 3.44 thousand shares to the insider’s fortune and the stock saw a 1.46 percent rally in value since the news became public. This transaction left 10.2 thousand shares in the Director account.
On 09/12/2018, Director Siegel Eric B performed a purchase transaction worth $120.93 thousand. This purchase at $17.3 each has added 6.99 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 0.75 percent increase since the transaction was reported. The insider now is left with 46.87 thousand shares remaining in the account. Torre Bates Ann, who performs the Director job, bought 9 thousand shares for $156.96 thousand. The acquisition occurred on 08/29/2018 was priced at $17.44 per share. The share price plunged -0.06 percent since the reporting date. Torre Bates Ann now left with a stake of 22.28 thousand ARCC stock worth $389.81 thousand after the insider buying.
The stock is currently hovering around the first support level of $17.44. Below this, the next support is placed in the zone of $17.37. Till the time, the ARCC stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 69.44 on daily chart, which may remain a cause for concern. If the price breaks below $17.37 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $17.56 mark may result into a pull-back move towards $17.61 level.
Shares of Ares Capital Corporation (ARCC) are trading at a P/E ratio of 7.92 times earnings reported for the past 12 months. The industry ARCC operates in has an average P/E of 10.29. Its P/E ratio went as low as 8.06X and as high as 11.83 over the 5-year span.Further, it is sporting a 5.96 on the Price-to-Sales ratio. Compare this with the industry average P/S of 25.97.