Prospect Capital Drops 1.47% to Record Low

Prospect Capital Corporation (PSEC) shares fell 1.47% today, marking the fifth consecutive day of decline, with a total drop of 9.49% over the past five days. The share price hit a record low today, with an intraday decline of 2.65%.

The strategy of buying PSEC shares after they reached a recent low and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and sharp peak at the beginning of 2025. However, overall performance was subdued, indicating limited gains relative to the risk taken.

Maximum Drawdown: The maximum drawdown of -9.41% occurred in early 2025, reflecting the volatility of holding PSEC shares after a recent low.

Peak at Beginning of 2025: The strategy achieved a peak return of 10.95% at the start of 2025, due to a favorable market reaction to PSEC's business model and financial performance.

Limited Overall Gains: Despite the peak return, the overall performance was lackluster, with a final value of $1,000, equivalent to a gain of only 3.54%. This suggests that while there was potential for high returns, the strategy did not capitalize on them consistently.

In conclusion, while the strategy of buying PSEC shares after a recent low and holding for 1 week showed potential for high returns, the overall performance over the past 5 years was disappointing. The significant drawdown in early 2025 and the relatively modest final gain of 3.54% highlight the importance of considering both the risk and the potential rewards when employing such a strategy.

Wells Fargo & Company has lowered its price target for Prospect Capital shares from $3.50 to $3.00 and assigned an "underweight" rating to the stock. This move suggests a negative outlook from the financial institution, which could impact investor perception and stock price negatively.

Prospect Capital is scheduled to go ex-dividend on March 27th, 2025, with shareholders of record receiving a $0.045 dividend per share on April 17th, 2025. Dividend announcements and ex-dividend dates can influence stock prices as investors may buy shares to receive dividends.

Analysts have set a consensus price target of $3.00 for Prospect Capital, indicating a potential downside of 12.41%. This consensus reflects market expectations and can affect investor sentiment and stock price.