Prospect Capital

PSEC

Market cap $1.24B

Prospect Capital (PSEC) trades at a 58% discount to NAV, but this discount reflects deep market scepticism about its reported asset values and quality of assets. PSEC's long-term performance has been poor, with nearly flat annualised returns over a decade and a persistent decline in book value since IPO. The company's NAV is likely overstated, as PSEC is slower than peers to mark down troubled loans and has a high proportion of PIK interest income.

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The Undercovered Dozen highlights 12 lesser-followed stocks and ETFs, offering fresh investment ideas and sparking community discussion on Seeking Alpha. This week's edition covers articles published between Nov. 7 and Nov. 13, offering fresh investment ideas. Ratings range from strong buy (ACHR, VICI, PSEC) to hold (JEPQ, MSTY) and sell (EOSE, VGT, XLK), with detailed justifications based on valuation, yield, and growth prospects.

The article highlights four major risks facing the private credit market - the four horsemen of the BDC Apocalypse. This includes lending to non-prime borrowers and receivables financing. AI-driven disruption in software companies and growing competition in private credit. So far these risks have not materialized in actual BDC results; however, they are worth considering when allocating to the sector. We remain bullish on BDCs overall.

Prospect Capital Corporation ( PSEC ) Q1 2026 Earnings Call November 7, 2025 9:00 AM EST Company Participants John Barry - Chairman of the Board & CEO Kristin Van Dask - CFO, Treasurer, Secretary & Chief Compliance Officer Michael Eliasek - President, COO & Director Conference Call Participants Finian O'Shea - Wells Fargo Securities, LLC, Research Division Presentation Operator Good day, and welcome to the Prospect Capital First Fiscal Quarter 2026 Earnings Release and Conference Call. [Operator Instructions] Please note, this event is being recorded.

Prospect Capital Corporation delivered better-than-expected net investment income and stabilizing NII on a Q/Q basis, supporting an upgrade to a strong buy rating. PSEC offers a robust value proposition with a ~60% discount to net asset value, stable dividend coverage, and a shift toward higher-quality first lien loans. The BDC reported a 0.7% non-accrual percentage in Q1'26 and reported a net asset value that declined only 1.7% Q/Q.

NEW YORK, Nov. 06, 2025 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our fiscal quarter ended September 30, 2025.

Business development companies (BDCs) are selling off. Recent bankruptcies are sparking fears across private credit. I review the best BDC opportunities following the sell-off.

While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy.

BDCs have already experienced a notable correction. The sector median P/NAV metric indicates ~12% discount to NAV. Many players are priced even below that.