ARCC stock: buy or sell?

ARCC stock price: $18.90 -1.15% At close on January 24th, 2020

Updated on:
January 24th, 2020

5

Ares Capital slightly fell -1.15% to $18.90 after yesterday all time highs.

Should I buy ARCC stock?

You can't be a successful trader if you don't follow a methodolgy or system that assist you in choosing companies and the correct market timing. That's why is so important to choose your own trading strategy that matches with your character as inversor. 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 work for 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 published 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 slightly fell -1.15% to $18.90 after yesterday all time highs.

After topping to all time highs on Thursday, Ares Capital slightly fell -1.15% on Jan/24 to $18.90. On Thursday, ARCC hit a new all time high, pushing higher than on Wednesday tops. Check different trading setups that use ATHs as triggers.

ARCC stock chart (daily)

Weekly outlook

Despite of the red candle ($18.90, -0.32%), Ares Capital peaked new all time high at $19.20.

ARCC shows a strong mid-term uptrend with several rising tops and rising bottoms. Since its last bottom late September 2019, ARCC climbed unceasignly breaking out to new all time highs. Since late January 2019 when ARCC stock price broke up the SMA40w line, it gained $4.22 (28.75%). Late February 2019, SMA10w and SMA20w crossed up triggering a rise of 18.87%.

ARCC stock chart (weekly)

ARCC stock price history

ARCC stock went public on October 5th, 2004 with a price of $2.891. Since then, ARCC stock grew a 554.00%, with an average of 36.90% per year. If you had invested $1,000 in ARCC stock in 2004, it would worth $5,540.00 today.

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

ARCC stock historical price chart

ARCC stock reached all-time highs on Thursday with a price of $19.20.

ARCC stock price target is $19.80

Nobody can reliably foresee how stock prices may evolve in the future. However, many stock price predictions are published every day by banks, financial institutions and independent analysts. The accuracy of these stock price predictions is not very high, and you should not blindly believe and make decisions only based on what this ratings or price target predictions say. We have 4 price targets for ARCC stock released in the last month:
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%
Moving in a range from $20.00 and $19.50, the price target for ARCC stock is $19.80. In average, analysts' outlook on ARCC price forecast is positive, improving the forecast by a 4.00% from previous estimations.

Financials and fundamental analysis

Earnings date and Earnings per Share

Ares Capital presented beatiful results for 2018-Q4 on February. Ares Capital raised Earnings per Share (EPS) by 9.80%, beating analysts estimates of $0.41. 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

In 2018, Ares Capital annual sales boosted an outstanding 15.58% to $1,261.00 million dollars from $1,091.00 marked in 2017. 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 posted $235.00 million in sales for 2018-Q4, a -23.45% less compared to previous quarter. Reported quarter income marked $153.00 million with a profit margin of 65.11%. Profit margin declined a -2.97% compared to previous quarter when profit margin was 68.08%. When comparing revenues to same quarter last year, Ares Capital sales marked a spooky loss and collapsed a -77.93%. Looking back to recent quarterly results, Ares Capital posted 2 negative 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 buy a stock, it's worth to overview its ownership structure.

Management staff in all public traded companies that hold equity is required to report every transaction to the SEC. For Ares Capital, 0.52% of all outstanding shares are owned by its staff.

In case of Ares Capital stock, 36.39% of its shares are held by institutions (mutual funds, pension funds, big banks and other large financial institutions).

For a better context understanding, the following table shows ownership data compared to other related stocks:

ARCC
Market cap$8.1 B
Total shares427.2 M
Float shares0.0 M
  - Institutional holdings (%)36.4%
  - Insider holdings (%)0.5%
Shares in short selling0.0%

ARCC summary

Friday, January 24th, 2020
Open$19.16
Close$18.90
Day range$18.89 - $19.17
Previous close$19.12
Session gain-1.15%
Average true range$0.17
50d mov avg$18.55
100d mov avg$18.35
200d mov avg$17.70
Daily pattern
Weekly pattern lb03c

Ares Capital performance

To better understand Ares Capital performance you must becnhmark its gains with other related stocks in same sector or industry. In the following table, we compare Ares Capital performance to :
Stock3m6m12m
ARCCAres Capital5.18%8.50%28.75%

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.