Ares Capital Corporation (NASDAQ:ARCC) Sees Large Growth in Short Interest

Ares Capital Corporation (NASDAQ:ARCC) was the target of a large growth in short interest during the month of March. As of March 13th, there was short interest totaling 40,327,502 shares, a growth of 37.5% from the February 26th total of 29,328,894 shares. Approximately 5.6% of the company’s stock are short sold. Based on an average daily trading volume, of 9,874,331 shares, the days-to-cover ratio is presently 4.1 days.

Analysts Set New Price Targets

Several research analysts recently weighed in on ARCC shares. UBS Group cut their price target on shares of Ares Capital from $21.00 to $19.00 and set a “neutral” rating on the stock in a report on Friday, March 13th. Weiss Ratings reissued a “hold (c+)” rating on shares of Ares Capital in a research report on Monday, December 29th. JPMorgan Chase & Co. cut their target price on Ares Capital from $22.00 to $19.00 and set an “overweight” rating on the stock in a research note on Friday, March 13th. Wall Street Zen lowered Ares Capital from a “hold” rating to a “sell” rating in a report on Saturday, February 7th. Finally, Royal Bank Of Canada decreased their price target on Ares Capital from $23.00 to $22.00 and set an “outperform” rating for the company in a research report on Monday, February 9th. Seven equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to MarketBeat.com, Ares Capital currently has a consensus rating of “Moderate Buy” and a consensus target price of $21.38.

Insiders Place Their Bets

In other news, CEO Michael Kort Schnabel acquired 12,500 shares of the business’s stock in a transaction on Thursday, February 5th. The shares were purchased at an average cost of $19.13 per share, with a total value of $239,125.00. Following the acquisition, the chief executive officer directly owned 40,500 shares of the company’s stock, valued at $774,765. The trade was a 44.64% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CFO Scott C. Lem bought 5,186 shares of Ares Capital stock in a transaction dated Friday, February 6th. The stock was purchased at an average price of $19.29 per share, with a total value of $100,037.94. Following the purchase, the chief financial officer owned 39,463 shares in the company, valued at approximately $761,241.27. This represents a 15.13% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Corporate insiders own 0.49% of the company’s stock.

Hedge Funds Weigh In On Ares Capital

Institutional investors have recently bought and sold shares of the company. Morgan Stanley grew its holdings in Ares Capital by 2.0% during the fourth quarter. Morgan Stanley now owns 17,558,581 shares of the investment management company’s stock valued at $355,210,000 after purchasing an additional 341,578 shares during the period. UBS Group AG raised its stake in shares of Ares Capital by 41.8% in the fourth quarter. UBS Group AG now owns 11,201,905 shares of the investment management company’s stock valued at $226,615,000 after buying an additional 3,301,890 shares during the period. Bank of America Corp DE lifted its position in shares of Ares Capital by 8.9% during the 2nd quarter. Bank of America Corp DE now owns 8,678,129 shares of the investment management company’s stock valued at $190,572,000 after buying an additional 705,882 shares during the last quarter. Legal & General Group Plc lifted its position in shares of Ares Capital by 16.4% during the 4th quarter. Legal & General Group Plc now owns 5,408,067 shares of the investment management company’s stock valued at $109,432,000 after buying an additional 761,838 shares during the last quarter. Finally, Wells Fargo & Company MN grew its stake in shares of Ares Capital by 1.5% during the 4th quarter. Wells Fargo & Company MN now owns 4,387,637 shares of the investment management company’s stock worth $88,762,000 after acquiring an additional 63,796 shares during the period. Hedge funds and other institutional investors own 27.38% of the company’s stock.

Ares Capital Price Performance

ARCC opened at $17.74 on Tuesday. The firm has a market cap of $12.74 billion, a P/E ratio of 9.54 and a beta of 0.59. The firm has a 50-day moving average of $19.10 and a 200 day moving average of $19.91. The company has a debt-to-equity ratio of 1.12, a quick ratio of 1.70 and a current ratio of 1.70. Ares Capital has a fifty-two week low of $17.40 and a fifty-two week high of $23.42.

Ares Capital (NASDAQ:ARCC) last posted its quarterly earnings data on Wednesday, February 4th. The investment management company reported $0.50 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.50. The business had revenue of $793.00 million during the quarter, compared to the consensus estimate of $795.20 million. Ares Capital had a net margin of 42.56% and a return on equity of 9.89%. The firm’s quarterly revenue was up 4.5% compared to the same quarter last year. During the same quarter last year, the company posted $0.55 earnings per share. On average, research analysts expect that Ares Capital will post 2.19 EPS for the current year.

Ares Capital Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Tuesday, March 31st. Investors of record on Friday, March 13th will be issued a $0.48 dividend. This represents a $1.92 dividend on an annualized basis and a dividend yield of 10.8%. The ex-dividend date of this dividend is Friday, March 13th. Ares Capital’s payout ratio is 103.23%.

About Ares Capital

Ares Capital Corporation (NASDAQ: ARCC) is a publicly traded business development company (BDC) that specializes in providing debt and equity financing solutions to U.S. middle-market companies. As a BDC, Ares Capital offers investors access to a diversified portfolio of tailored credit investments, including senior secured loans, unitranche financing, mezzanine debt and equity co-investments. The firm’s flexible capital structures are designed to support companies seeking growth capital, refinancing or strategic acquisitions.

Through its credit platform, Ares Capital focuses on originations, underwriting and portfolio management across a range of industries, with a particular emphasis on sectors such as healthcare, technology, industrials and business services.