Oaktree Specialty Lending (OCSL) Shares Gap Down After Earnings Miss

Oaktree Specialty Lending Corp (NASDAQ:OCSL) gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $4.22, but opened at $4.36. Oaktree Specialty Lending shares last traded at $4.38, with a volume of 655501 shares traded.

The credit services provider reported $0.09 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.10 by ($0.01). Oaktree Specialty Lending had a positive return on equity of 6.49% and a negative net margin of 95.68%. The business had revenue of $33.88 million for the quarter, compared to the consensus estimate of $35.00 million.

The firm also recently declared a quarterly dividend, which will be paid on Friday, March 30th. Investors of record on Thursday, March 15th will be paid a dividend of $0.085 per share. This represents a $0.34 dividend on an annualized basis and a dividend yield of 7.69%. The ex-dividend date of this dividend is Wednesday, March 14th. Oaktree Specialty Lending’s dividend payout ratio is currently -45.87%.

A number of brokerages recently issued reports on OCSL. National Securities lowered Oaktree Specialty Lending from a “buy” rating to a “neutral” rating and decreased their price target for the stock from $7.00 to $5.00 in a research note on Friday, December 1st. JPMorgan Chase & Co. raised Oaktree Specialty Lending from a “neutral” rating to an “overweight” rating and set a $6.00 price target for the company in a research note on Tuesday, February 6th. Keefe, Bruyette & Woods set a $6.00 price target on Oaktree Specialty Lending and gave the stock a “hold” rating in a research note on Thursday, November 30th. Zacks Investment Research raised Oaktree Specialty Lending from a “hold” rating to a “buy” rating and set a $6.50 price target for the company in a research note on Tuesday, November 7th. Finally, BMO Capital Markets reissued a “hold” rating and set a $5.00 price target on shares of Oaktree Specialty Lending in a research note on Monday, January 8th. One equities research analyst has rated the stock with a sell rating, six have issued a hold rating and five have given a buy rating to the company’s stock. The stock presently has an average rating of “Hold” and a consensus target price of $5.63.

In other news, major shareholder Oaktree Capital Management Lp bought 276,000 shares of the firm’s stock in a transaction on Thursday, December 14th. The stock was acquired at an average cost of $4.79 per share, with a total value of $1,322,040.00. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Richard Ruben bought 14,550 shares of the firm’s stock in a transaction on Wednesday, December 6th. The shares were purchased at an average cost of $4.82 per share, with a total value of $70,131.00. The disclosure for this purchase can be found here. Over the last ninety days, insiders have acquired 362,534 shares of company stock valued at $1,734,287. 0.10% of the stock is currently owned by corporate insiders.

A number of hedge funds and other institutional investors have recently modified their holdings of OCSL. River Road Asset Management LLC bought a new stake in Oaktree Specialty Lending during the 4th quarter valued at $31,142,000. Bank of Montreal Can bought a new stake in Oaktree Specialty Lending during the 4th quarter valued at $9,281,000. LSV Asset Management bought a new stake in Oaktree Specialty Lending during the 4th quarter valued at $8,436,000. Clear Harbor Asset Management LLC bought a new stake in Oaktree Specialty Lending during the 4th quarter valued at $4,076,000. Finally, BlackRock Inc. bought a new stake in Oaktree Specialty Lending during the 4th quarter valued at $3,831,000. 35.70% of the stock is owned by institutional investors and hedge funds.

The company has a debt-to-equity ratio of 0.48, a quick ratio of 0.22 and a current ratio of 0.22. The company has a market capitalization of $631.62, a PE ratio of -4.06, a price-to-earnings-growth ratio of 5.41 and a beta of 0.03.

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Oaktree Specialty Lending Company Profile

Oaktree Specialty Lending Corporation, formerly Fifth Street Finance Corp., is a specialty finance company. The Company is focused on providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company provides companies with flexible financing solutions including first and second lien loans, unsecured and mezzanine loans, and preferred equity.

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