Trade-Ideas LLC identified

Prospect Capital

(

PSEC

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Prospect Capital as such a stock due to the following factors:

  • PSEC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.7 million.
  • PSEC has traded 943,724 shares today.
  • PSEC is trading at 2.73 times the normal volume for the stock at this time of day.
  • PSEC is trading at a new high 3.05% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on PSEC:

Prospect Capital Corporation is a business development company. The stock currently has a dividend yield of 14.5%. PSEC has a PE ratio of 7. Currently there are 3 analysts that rate Prospect Capital a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Prospect Capital has been 2.9 million shares per day over the past 30 days. Prospect has a market cap of $2.4 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.22 and a short float of 6.6% with 3.84 days to cover. Shares are down 12.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Prospect Capital as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 150.84% to $244.35 million when compared to the same quarter last year. Despite an increase in cash flow of 150.84%, PROSPECT CAPITAL CORP is still growing at a significantly lower rate than the industry average of 264.01%.
  • The gross profit margin for PROSPECT CAPITAL CORP is rather high; currently it is at 66.52%. Regardless of PSEC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.89% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 66.9% when compared to the same quarter one year ago, falling from $84.11 million to $27.82 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Capital Markets industry and the overall market, PROSPECT CAPITAL CORP's return on equity is below that of both the industry average and the S&P 500.

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