Zacks Research has downgraded shares of Oaktree Specialty Lending (NASDAQ: OCSL) from a hold rating to a strong sell rating, according to a report released on Thursday, August 31, 2023. This decision comes after the company reported disappointing quarterly earnings results earlier this month, raising concerns among investors.
The stock opened at $13.06 on Thursday, reflecting a slight increase of 0.1%. Oaktree Specialty Lending has experienced a fifty-two week low of $12.50 and a high of $16.66. Currently, the company holds a market capitalization of $1.15 billion and has a price-to-earnings (P/E) ratio of 23.32, with a beta of 0.67. Additionally, the firm has a fifty-day simple moving average of $13.68 and a 200-day simple moving average of $14.09.
Oaktree Specialty Lending reported its quarterly earnings on August 5, 2023. The credit services provider announced earnings per share (EPS) of $0.37, falling short of analysts’ expectations of $0.45 by $0.08. The company’s net margin stood at 13.84%, and it recorded a return on equity of 10.94%. Total revenue for the quarter was $75.27 million, which also missed analysts’ forecasts of $79.14 million. In the same quarter the previous year, Oaktree Specialty Lending had reported an EPS of $0.55. Looking ahead, analysts anticipate that the company will post an EPS of $2.06 for the current fiscal year.
Dividend Announcement and Institutional Trading
In a recent development, Oaktree Specialty Lending announced a quarterly dividend of $0.40 per share, expected to be paid on September 30, 2023. Investors of record on September 15, 2023, will receive this dividend. This payout translates to an annualized dividend of $1.60 and a yield of 12.3%. The company’s current dividend payout ratio (DPR) is notably high at 285.71%.
Recent trading activity indicates significant interest from institutional investors. Corient Private Wealth LLC increased its stake in Oaktree Specialty Lending by 286.0% during the second quarter, now holding 42,918 shares valued at $586,000. Meanwhile, TT Capital Management LLC raised its stake by 7.6%, owning 104,643 shares worth $1.43 million after acquiring an additional 7,363 shares. Other notable changes include Marex Group plc, which acquired a new stake valued at about $344,000, and MRP Capital Investments LLC, which increased its holdings by 8.3%.
Tower Research Capital LLC TRC made a significant move as well, boosting its stake by an impressive 1,025.1% in the same quarter. Institutional investors and hedge funds collectively own 36.79% of Oaktree Specialty Lending’s stock, reflecting the growing interest in the company despite recent downgrades.
About Oaktree Specialty Lending
Oaktree Specialty Lending Corporation operates as a business development company specializing in various financial services including investments in middle-market companies, bridge financing, first and second lien debt, unsecured and mezzanine loans, and management buyouts. The firm targets small to mid-sized companies, aiming to provide tailored financial solutions in a competitive market.
As Oaktree Specialty Lending navigates these challenging circumstances, the recent downgrade by Zacks Research and its disappointing earnings may lead to further scrutiny from investors. The company’s ability to adapt to market conditions will be crucial in the upcoming quarters.
