Prospect Capital (NASDAQ:PSEC) has a vigorously managed portfolio of lending activities that necessitates constant adjustment, new deals, review of thousands of potential opportunities, and tough decision making. While investing is a personal decision, all things considered, for our risk tolerance, we believe a strong entry point into the name has always been when the stock yields over 11%. With the monthly distribution having been cut significantly to $0.06, our target entry point is now $6.50, where the name will yield 11% again. Between an 11-12% yield has always been our target with the name over the years. We believe the reward at these levels justifies the risk taken on with Prospect Capital’s business model. Ultimately, the risk is whether the distribution will be covered. To ensure the dividend is able to be maintained, one key piece of evidence that has been missing from recent analyses is a deeper understanding of recent investment activity trends and implications going forward. We seek to fill some of that void in the present column.……READ FULL ARTICLE

 

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