Oaktree Specialty Lending (NASDAQ:OCSL) Issues Quarterly Earnings Results, Beats Estimates By $0.02 EPS

Oaktree Specialty Lending (NASDAQ:OCSL) issued its earnings results on Tuesday. The credit services provider reported $0.38 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.36 by $0.02, FiscalAI reports. The company had revenue of $69.74 million for the quarter, compared to analyst estimates of $74.35 million. Oaktree Specialty Lending had a net margin of 10.58% and a return on equity of 9.75%. During the same quarter last year, the firm earned $0.45 EPS.

Here are the key takeaways from Oaktree Specialty Lending’s conference call:

• Non-accruals declined to 2.6% of the debt portfolio (from 3.1% last quarter and 4.6% a year ago); post-quarter sales of legacy non-accruals (Dominion Diagnostics, All Web Leads) generated cash and the firm expects further reductions and redeployments into performing assets.
• Net asset value fell to $15.69 per share (from $16.30) driven mainly by ~310 bps markdowns in software loans and spread widening, which management attributes to market repricing rather than fundamental deterioration.
• liquidity was increased to $671 million (including a $620 million undrawn facility) and net leverage was reduced to 1.04x after selling some liquid positions at cost, positioning OCSL to deploy into new loans that are pricing wider (roughly SOFR+500–550) with a weighted average new-deal yield of ~9.2%.
• The board adjusted the dividend policy by setting a new conservative base dividend of $0.30 per share (supplemental dividend remains 50% of excess ANII), although the quarter’s total cash dividend declared was $0.34.

Oaktree Specialty Lending Stock Down 5.8%

Shares of NASDAQ:OCSL traded down $0.75 during trading on Tuesday, hitting $12.15. 941,044 shares of the company’s stock traded hands, compared to its average volume of 907,357. Oaktree Specialty Lending has a 52 week low of $10.63 and a 52 week high of $14.77. The company has a current ratio of 0.16, a quick ratio of 0.16 and a debt-to-equity ratio of 0.66. The company has a market cap of $1.07 billion, a price-to-earnings ratio of 33.61 and a beta of 0.52. The company has a 50-day moving average price of $11.73 and a 200-day moving average price of $12.61.

Oaktree Specialty Lending Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Monday, March 16th were issued a dividend of $0.40 per share. This represents a $1.60 annualized dividend and a dividend yield of 13.2%. The ex-dividend date was Monday, March 16th. Oaktree Specialty Lending’s payout ratio is 444.44%.

Insider Buying and Selling at Oaktree Specialty Lending

In other Oaktree Specialty Lending news, Director Phyllis R. Caldwell acquired 2,500 shares of the business’s stock in a transaction dated Monday, March 16th. The shares were acquired at an average price of $10.77 per share, for a total transaction of $26,925.00. Following the acquisition, the director directly owned 23,500 shares of the company’s stock, valued at approximately $253,095. This trade represents a 11.90% increase in their position. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. 0.29% of the stock is owned by company insiders.

Hedge Funds Weigh In On Oaktree Specialty Lending

Large investors have recently bought and sold shares of the company. Royal Bank of Canada raised its position in shares of Oaktree Specialty Lending by 34.3% in the first quarter. Royal Bank of Canada now owns 468,879 shares of the credit services provider’s stock valued at $7,201,000 after purchasing an additional 119,775 shares during the period. Marshall Wace LLP bought a new position in shares of Oaktree Specialty Lending in the second quarter valued at about $246,000. Gabelli Funds LLC raised its position in shares of Oaktree Specialty Lending by 3.0% in the second quarter. Gabelli Funds LLC now owns 186,379 shares of the credit services provider’s stock valued at $2,546,000 after purchasing an additional 5,467 shares during the period. NewEdge Advisors LLC raised its position in shares of Oaktree Specialty Lending by 688.1% in the second quarter. NewEdge Advisors LLC now owns 12,972 shares of the credit services provider’s stock valued at $177,000 after purchasing an additional 11,326 shares during the period. Finally, Balyasny Asset Management L.P. raised its position in shares of Oaktree Specialty Lending by 298.9% in the second quarter. Balyasny Asset Management L.P. now owns 626,324 shares of the credit services provider’s stock valued at $8,556,000 after purchasing an additional 469,328 shares during the period. Institutional investors and hedge funds own 36.79% of the company’s stock.

Analyst Ratings Changes

OCSL has been the subject of several analyst reports. JPMorgan Chase & Co. decreased their target price on Oaktree Specialty Lending from $13.50 to $10.50 and set a “neutral” rating for the company in a research report on Friday, March 13th. Zacks Research upgraded Oaktree Specialty Lending from a “strong sell” rating to a “hold” rating in a research report on Monday, April 6th. Wall Street Zen upgraded Oaktree Specialty Lending from a “sell” rating to a “hold” rating in a research report on Saturday, April 11th. Weiss Ratings upgraded Oaktree Specialty Lending from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Wednesday, April 15th. Finally, Wells Fargo & Company decreased their target price on Oaktree Specialty Lending from $13.00 to $12.00 and set an “equal weight” rating for the company in a research report on Thursday, February 5th. Six research analysts have rated the stock with a Hold rating, Based on data from MarketBeat.com, Oaktree Specialty Lending has an average rating of “Hold” and a consensus price target of $12.17.

About Oaktree Specialty Lending

Oaktree Specialty Lending Corporation (NASDAQ: OCSL) is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.