ARCC stock: buy or sell?

ARCC stock price: $18.57 -1.69% At close on August 23rd, 2019

Updated on:
August 23rd, 2019

4

After yesterday all time highs, Ares Capital eased a bit to $18.57.

Should I buy ARCC stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to choose and when is the best moment to buy them. There are thousands of trading strategies for you to choose, but at Stocks2.com we prefer those that are simple but successful.

Currently, 2 buy setups match with Ares Capital stock right now:

Buy setupElegible
New all-time highYes
New 52 week highYes
Price crossing up 200d MANo
100d MA crossing up 200d MANo

Is Ares Capital stock a buy?

Everyday, hundreds of stock ratings are posted by financial analysts to indicate a particular stock's attractiveness. At Stocks2.com, we gathered 5 ratings published for ARCC stock in the last month.

The general sentiment of these ratings is bullish for ARCC stock, with 4 positive ratings.
Is ARCC a good stock to buy?
DateAnalyst / BrokerPrevious ratingCurrent rating
2019-8-23Compass PointBuyNeutral
2019-8-19BMO Capital MarketsMarket PerformOutperform
2019-7-31Raymond Jamesn/aOutperform
2019-2-13National Securitiesn/aBuy
2019-2-13JMP SecuritiesMarket OutperformMarket Outperform

ARCC stock analysis

Daily outlook

Ares Capital eased -1.69% to $18.57 after yesterday all time highs.

Ares Capital eased -1.69% to $18.57 after reaching all time highs yesterday. From a daily perspective, ARCC is in a short term uptrend after plotting its last bottom ($18.28, on August/14) higher than the previous bottom, and its last top ($19.02, on Monday) also over the previous top. Now trading in between its last bottom and last top ARCC might consolidate in a plain range, waiting to break out over $19.02 or down under $18.28. Yesterday, ARCC hit a new all time high, pushing higher than on Monday tops. Check different trading setups that use ATHs as triggers.

ARCC stock chart (daily)

Weekly outlook

Ares Capital closed this week at $18.57 after reaching a new all time high ($19.02) even it couldn't close with gains and remained constant an ugly -0.38%. After 4 weeks soaring, this week declined a -0.38%.

Observing the weekly chart, ARCC marked an uptrend of rising tops and rising bottoms. Since its last top late July at $18.83, price slid and bounced up back from $17.96. Breaking down under $17.96 would cancel the current uptrend and it might test lower supports. Note that $18.83 might act as a resistance line. Late January ARCC price bounced up over the SMA of 40 weeks that acted as support stopping new slides. Late February, SMA10w and SMA20w crossed up triggering a rise of 11.73%.

ARCC stock chart (weekly)

ARCC stock price history

ARCC IPO was on October 5th, 2004 at $3.02 per share1. Since then, ARCC stock surged a 514.90%, with a yearly average of 36.80%. If you had invested right after ARCC's IPO a $1,000 in ARCC stock in 2004, it would worth $5,149.00 today.

1: Adjusted price after possible price splits or reverse-splits.

ARCC stock historical price chart

ARCC stock reached all-time highs yesterday with a price of $19.02.

ARCC stock price target is $19.80

Predicting the price evolution of a stock or any financial instrument in a reliable and repeatable way is probably impossible. However, many stock price predictions are published every day by banks, financial institutions and independent analysts. We do not recommend to follow these stock price predictions without a critical thinking from your side, as their accuracy is usually low. For the last month we found 4 price forecasts for ARCC stock:
ARCC stock price predictions
DateAnalyst / BrokerActionPrevious targetCurrent targetDiff
2019-8-19BMO Capital MarketsUpgrades$19.00$20.005.3%
2019-7-31Raymond JamesRaises Target$19.00$19.502.6%
2019-2-13National SecuritiesRaises Target$19.00$20.005.3%
2019-2-13JMP SecuritiesRaises Target$19.00$19.502.6%
(in average)$19.00$19.804.0%
The price target for Ares Capital stock is $19.80, moving in a range between $20.00 and $19.50. In average, analysts' outlook on ARCC price forecast is positive, improving the prediction by a 4.00% from previous estimations.

Financials and fundamental analysis

Earnings date and Earnings per Share

On February, Ares Capital reported its latest financial data, posting a beatiful gain for the Earnings per Share (EPS). Analyst were expecting $0.41 per share, but Ares Capital posted $0.45.
ARCC earnings date and EPS evolution
QuarterReporting dateEstimated EPSActual EPSSurprise
2017-Q2-n/a0.45n/a
2017-Q32017-11-020.350.362.9%
2017-Q42018-02-130.370.382.7%
2018-Q12018-05-020.370.395.4%
2018-Q22018-08-010.390.390.0%
2018-Q32018-10-310.40.4512.5%
2018-Q42019-02-120.410.459.8%
2019-Q1-n/an/an/a
2019-Q2-n/an/an/a
2019-Q3-n/an/an/a

Annual financial results

Compared to 2017, last anual turnover report draw an outstanding increase of 15.58% to $1,261.00 M USD. When comparing 2018 vs 2017, however, profit margin (that is, the net income divided by revenues) rose a 6.90% to 68.04%.

ARCC annual Sales and Income evolution
YearSalesYoYIncome/(margin)YoY
2013$945 M-$489 M51.7%-
2014$989 M4.60%$591 M59.8%20.97%
2015$669 M-32.32%$379 M56.6%-35.92%
2016$806 M20.43%$474 M58.8%25.17%
2017$1,091 M35.36%$667 M61.1%40.72%
2018$1,261 M15.58%$858 M68.0%28.64%

Quarterly financial results

Ares Capital reported $235.00 million in sales for 2018-Q4, a -23.45% decline compared to previous quarter. Reported quarter earnings marked $153.00 million with a profit margin of 65.11%. Profit margin slightly fell a -2.97% compared to previous quarter when profit margin was 68.08%. When comparing sales to same quarter last year, Ares Capital sales marked a hair-raising correction and plunged a -77.93%. Looking back to recent quarterly results, Ares Capital posted 2 positive quarters in a row.
ARCC quarterly Sales and Income evolution
QuarterSales1QoQ2Income1/(margin)QoQ2
2017-Q2$396 M-$178 M44.9%-
2017-Q3$294 M-25.76%$139 M47.3%-21.91%
2017-Q4$1,065 M262.24%$232 M21.8%66.91%
2018-Q1$355 M-66.67%$242 M68.2%4.31%
2018-Q2$364 M2.54%$254 M69.8%4.96%
2018-Q3$307 M-15.66%$209 M68.1%-17.72%
2018-Q4$235 M-23.45%$153 M65.1%-26.79%
2019-Q1$319 M35.74%$214 M67.1%39.87%

Ares Capital ownership

When you are planning to invest in shares of a stock, it's worth to review its ownership structure.

Ares Capital shares owned by insiders (that is, founders, CEO, CTO, main executives or other management staff) currently counts a 0.48% of all shares.

In case of Ares Capital stock, 40.30% of its shares are held by institutions (mutual funds, pension funds, big banks and other large financial institutions).

The following table compares ownership indicators for other stocks related to Ares Capital:

ARCC
Market cap$7.9 B
Total shares426.3 M
Float shares0.0 M
  - Institutional holdings (%)40.3%
  - Insider holdings (%)0.5%
Shares in short selling0.0%

ARCC summary

Friday, August 23rd, 2019
Open$18.79
Close$18.57
Day range$18.50 - $18.87
Previous close$18.89
Session gain-1.69%
Average true range$0.27
50d mov avg$18.25
100d mov avg$17.75
200d mov avg$16.80
Daily patternlt06a
Weekly pattern lb03a

Ares Capital performance

To better understand Ares Capital performance you must compare its gains with other related stocks in same sector or industry. For Ares Capital, the comparison is made against .
Stock3m6m12m
ARCCAres Capital6.36%11.73%17.31%

Ares Capital competitors

Unfortunately, we could not find any public company that could be defined as Ares Capital competitor. This doesn't mean Ares Capital does not have any competitor in the market, it's just we could not detected it.