Shares of Oaktree Specialty Lending Corp. (NASDAQ: OCSL) have been given an average recommendation of “Reduce” by analysts from seven ratings firms, according to data from Marketbeat.com. Of these analysts, one has issued a sell recommendation, while six have opted for hold ratings. The average target price for the stock over the next twelve months is set at $14.25.
A recent wave of research reports has provided insights into Oaktree Specialty Lending’s standing in the market. On October 9, 2023, Zacks Research upgraded the company’s rating from “strong sell” to “hold.” Following this, Lucid Capital Markets also raised its rating to “hold” in a report released on December 15, 2023. In contrast, Weiss Ratings reaffirmed a “sell (d+)” rating on December 29, 2023.
Performance Highlights and Earnings Report
Oaktree Specialty Lending reported its quarterly earnings on November 18, 2023. The company achieved earnings per share (EPS) of $0.40, surpassing analysts’ expectations of $0.38 by $0.02. The firm generated revenue of $76.87 million, slightly exceeding the forecast of $76.51 million. The company’s return on equity stood at 10.31%, with a net margin of 10.71%. In the same quarter of the previous year, Oaktree Specialty Lending had reported an EPS of $0.45. Analysts predict that the company will post an EPS of 2.06 for the current financial year.
The firm also announced a quarterly dividend of $0.40 per share, which was distributed on December 31, 2023. Shareholders on record as of December 15, 2023 received this dividend, which translates to an annualized dividend of $1.60 and a yield of 12.4%. The ex-dividend date was also set for December 15, 2023. Notably, Oaktree Specialty Lending’s dividend payout ratio (DPR) is currently reported at a remarkable 410.26%.
Institutional Investor Activity
Recent movements among institutional investors have also influenced Oaktree Specialty Lending’s stock. Generali Asset Management SPA SGR increased its holdings by 74.2% in the second quarter, now owning 1,888,566 shares valued at approximately $25.8 million after acquiring an additional 804,422 shares.
Meanwhile, Private Management Group Inc. raised its stake by 25.2% in the third quarter, holding 3,014,163 shares worth about $39.3 million. Balyasny Asset Management L.P. saw a significant increase of 298.9%, bringing its total to 626,324 shares valued at $8.6 million. Additionally, Bruni J V & Co. Co. raised its position by 12.4%, now owning 2,487,019 shares worth approximately $32.5 million.
As of now, institutional investors and hedge funds collectively own 36.79% of Oaktree Specialty Lending’s stock, indicating a strong interest in the company from larger financial entities.
Company Overview
Oaktree Specialty Lending Corporation, founded in 2014, operates as a closed-end, externally managed specialty finance company. It is structured as a business development company (BDC) that focuses on providing customized debt solutions to middle-market companies in the U.S. The firm specializes in senior secured loans, second-lien financings, mezzanine debt, and selective equity co-investments.
The investment strategy of Oaktree Specialty Lending emphasizes floating-rate instruments, aiming to offer downside protection and income potential amidst fluctuating interest rates. The company’s diverse portfolio spans several industries, including healthcare, technology, energy, business services, and consumer products.
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