Prospect Capital (PSEC)
Rating: BUY
Current Price: $7.38
Price Target: $12.97
Thesis:
We have initiated a position in Prospect Capital as its price has pulled back 4.5% over the last two weeks. Prospect capital is a Business Development Company (BDC) with a big dividend yield (13.5%), low volatility, and a cost of capital that is lower than its return on capital. We value Prospect with a dividend discount model and some very conservative assumptions. You can read our full report on Prospect here.