Stellus Capital Investment Corporation
$8.68
-3.1%Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is compressed (P/E 9.1).
Valuation inputs: P/E 9.1, earnings yield +10.9%, momentum -3.1%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE +7.3%, ROIC +2.6%).
Profitability stack: net margin +40.4%, ROE +7.3%, ROIC +2.6%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile looks controlled across current risk inputs.
Risk factors: liabilities/assets +64.4%, momentum -3.1%, net margin +40.4%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Stellus Capital Investment Corporation Market vs Earnings Trajectory
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Stellus Capital Investment Corporation Fair Value Envelope
Stellus Capital Investment Corporation Profit Bridge
Profitability Analysis
Gross Margin
Strong gross margins indicate healthy pricing and efficient production or service delivery.
Operating Margin
Outstanding operational efficiency. The company generates substantial profit from core operations.
Net Profit Margin
Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.
Effective Tax Rate
Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.
Profitability Insight
Exceptional profitability across all levels: Strong pricing power, efficient operations, and healthy bottom line indicate a high-quality business with sustainable competitive advantages.
Stellus Capital Investment Corporation Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Negative free cash flow despite positive earnings raises concerns about cash generation ability or heavy capital requirements.
FCF Growth Trend
Steady FCF growth indicates consistent cash generation improvement. On a positive trajectory.
Working Capital Impact
Minimal working capital impact on FCF. Changes in operating assets and liabilities well-managed.
Cash Flow Quality Insight
Cash flow concerns: Despite profitability, the company is burning cash. Review working capital management, CapEx levels, and sustainability of current operations.
Stellus Capital Investment Corporation Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Warning: Liquidity concerns. Current assets may not be sufficient to cover short-term obligations.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Negative working capital indicates short-term liabilities exceed short-term assets—potential liquidity stress.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
Financial Health Insight
Financial stress indicators: Both liquidity and leverage metrics raise concerns. The company may face challenges meeting obligations and should focus on strengthening its balance sheet.
Stellus Capital Investment Corporation Street Expectations Map
Wall Street analysts project that SCM stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 13.25, with estimates ranging from a low of 13.25 to a high of 13.25.
The consensus 1-year price target stands at 13.25, with estimates ranging from a low of 13.25 to a high of 13.25.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Analyst Conviction
Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.
Market Sentiment Insight
Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.
Stellus Capital Investment Corporation Insider Positioning
During the last 12 months, insiders have purchased $40K worth of SCM shares, with no selling activity reported.
3 Months
4.6K
40.25K
0
0.00
+40K
+$40K
3-6 Months
0
0.00
0
0.00
+0
+$0
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
0
0.00
+0
+$0
Top Buyers
Bilger Bruce R
Director
$40K
Top Sellers
No selling activity
Insider Activity Analysis
Net Insider Sentiment
Strong bullish signal with $40K net buying. Insiders are aggressively accumulating shares, suggesting significant confidence in future prospects.
Buy/Sell Ratio
Perfect buy/sell ratio. Only buying activity with zero selling—the most bullish possible insider signal.
Recent Trend (3 Months)
Very strong recent buying momentum. Recent insider purchases significantly outpace sales, suggesting near-term optimism.
Insider Participation
1 insider buyers vs. 0 sellers. Broad-based buying across management team suggests widespread confidence.
Insider Activity Insight
Unanimous insider buying: Zero selling combined with active buying is rare and typically very bullish. Insiders appear to see significant upside with limited downside risk.
scm Dividend History
Learning Layer
Related Guides
Build conviction on SCM by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.