This week’s NASDAQ trade comes from financial sector. Several highlights that we find compelling are the reasonable P/E multiple, the high dividend yield (8.41%), the impressive operating margin (74.75%) and perhaps, most impressive is the recent price action of the stock (a breakout after 15 months of consolidation).
Company profile: Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. It does not invest in start-up companies or companies having speculative business plans. The fund prefers debt investments between $5 million and $30 million in companies with EBITDA between $20 million and $60 million.
Trailing P/E: 12.27, Forward P/E: 12.30
EPS: 1.41, PEG: 2.42, Beta: 0.63
P/S: 7.16, P/B: 1.03
Profit margin: 58.34%, Operating margin: 74.75%
ROA: 3.69%, ROE: 8.41%
Quarterly earnings growth: -10.10
Dividend yield: 8.31%
Additional fundamental data: https://finance.yahoo.com/quote/SUNS/key-statistics?p=SUNS
Recently broke out of a 15-month consolidation
New 52-week high, New all-time high
Buying momentum (RSI) is positive and rising
Buying volume spiked in February
1st support level is at $16.50
The safety stop is at $16. 25
The target is $19.90
Suggested buying approach: Buy SUNS at the current price level. If the stock pulls back, as long as the level is above the safety stop, wait for confirmation of support and then add to the position if desired. Always use a 3% trailing stop.
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