Ares Capital Corporation (ARCC) Ready To Kick Into High Gear

Analysts at Citigroup, assumed coverage of Ares Capital Corporation (NASDAQ:ARCC) with Buy recommendation, according to their opinion released on August 23.

The number of Ares Capital Corporation (NASDAQ:ARCC) shares shorted has fallen by 595,434 shares. When looking at a stock for a potential investment, you want to know what percentage of Wall Street is betting against you. That’s what short interest tells you. The most recent short interest data has been released for the November 15th settlement date, which shows a decrease in total short interest for ARCC, to 5,691,238, a retreat of 9.47% since October 31st. Average daily volume for Ares Capital Corporation at the November 15th settlement jumped to 2,228,861, as compared to 1,845,673 at the October 31st report. That brought days to cover to 2.553429, a 25.04% decrease from the 3.406168 days to cover recorded at the prior short interest data release. Looking at the experts’ opinion for the ARCC stock we see that the average analyst recommendations at 1.8 suggests selling these shares.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Ares Capital Corporation (NASDAQ:ARCC)’s prospects. The earliest insider trade took place on 11/20/2018. Roll Penelope F parted with a total of 6 thousand shares of company at average share price of $16.76. The total for the sales was set at $100.56 thousand. After this transaction, the CFO account balance stood at 67.45 thousand shares. The stock grew 0.95 percent since that insider sale. On 11/20/2018, Bartlett Steve, Director, purchased 0.2 thousand shares at a price per share of $17.08. This added 3.42 thousand shares to the insider’s fortune and the stock saw a -0.94 percent retreat in value since the news became public. This transaction left 10.6 thousand shares in the Director account. On 10/22/2018, Director Bartlett Steve performed a purchase transaction worth $3.26 thousand. This purchase at $16.3 each has added 0.2 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 3.8 percent increase since the transaction was reported. The insider now is left with 10.4 thousand shares remaining in the account. Bartlett Steve, who performs the Director job, bought 0.2 thousand shares for $3.44 thousand. The acquisition occurred on 09/20/2018 was priced at $17.18 per share. The share price plunged -1.51 percent since the reporting date. Bartlett Steve now left with a stake of 10.2 thousand ARCC stock worth $170.44 thousand after the insider buying.

Ares Capital Corporation (ARCC) is expected to jump by 10.89 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 19.69 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 10.71 percent when compared to the closing price of the stock of $16.71 on Thursday, December 06. The lowest price target for the stock is $17 — slightly more than 1.74 percent from ARCC’s current share price.

The shares are currently floating around the first support level of $16.37. Below this, the next support is placed in the zone of $16.02. Till the time, the ARCC stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 42.81 on daily chart, which may remain a cause for concern. If the price breaks below $16.02 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $16.99 mark may result into a pull-back move towards $17.26 level.

ARCC shares dropped -0.21 points or -1.24 percent on Thursday to $16.71 with a heavy trade volume of 4.766 million shares. After opening the session at $16.91, the shares went as high as $16.92 and as low as $16.3, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $7.12 billion and now has 426.3 million shares outstanding. Ares Capital Corporation (ARCC) stock has lost -3.52 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 6.3 percent year to date (YTD) against a rise of 3.79 percent in 12 month’s time. The company’s shares still trade -5.22 percent away from its 1-year high of $17.63 and 11.18 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.

Shares of Ares Capital Corporation (ARCC) are trading at a P/E ratio of 12.81 times earnings reported for the past 12 months. The industry ARCC operates in has an average P/E of 10.57. Its P/E ratio went as low as 7.93X and as high as 11.83 over the 5-year span. Further, it is sporting a 5.69 on the Price-to-Sales ratio. Compare this with the industry average P/S of 11.6. 0 percent is the gross profit margin for Ares Capital Corporation and operating margin sits at 0 percent. Along with this, the net profit margin is 0 percent.

ARCC will be showing off its Q4 earnings on February 27. Analysts are forecasting revenue to climb 6 percent to $325M in the next fiscal quarter, while earnings are seen soaring by nearly 7.89 percent to $0.41 per share. 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. In last reported earnings results, 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 18 percent this year, 3.7 percent next year and continue to increase by 3 percent annually for the next 5 years.