Stellus Capital Receives a Buy from Oppenheimer

By Austin Angelo

Oppenheimer analyst Chris Kotowski reiterated a Buy rating on Stellus Capital (NYSE: SCM) today and set a price target of $14. The company’s shares opened today at $13.20.

Kotowski said:

“Stellus reported 4Q16 net investment income (NII) per share of $0.37, slightly ahead of our $0.35 estimate. Importantly, for the full year they reported NII of $1.39, covering the $1.36 dividend, and this year without any help from fee waivers. In the prior two years, fee waivers had added ~$0.05 and $0.11 to NII, respectively, and while that shows a shareholder-friendly attitude on the part of management, we of course prefer to see the dividend earned cleanly. SCM has also had relatively stable NAV with only one significant realized loss in more than four years with a cumulative NAV erosion of about 5%.”

According to, Kotowski is a 5-star analyst with an average return of 8.8% and a 64.5% success rate. Kotowski covers the Financial sector, focusing on stocks such as Apollo Global Management LLC, Fidus Investment Corporation, and Solar Senior Capital Ltd.

Stellus Capital has an analyst consensus of Moderate Buy, with a price target consensus of $13.75.

The company has a one year high of $14.39 and a one year low of $9.35. Currently, Stellus Capital has an average volume of 87.22K.

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Stellus Capital Investment Corp. is a business development company which offers customized sources of private credit and energy-focused private equity capital to the middle market. The fund focuses on companies with an EBITDA of $5 to $150 million. It provides financing in the form of first lien, second lien, unitranche and mezzanine debt financing with an investment size ranging from $30 to $150 million.