Fidus Investment (NASDAQ:FDUS) Stock Surpasses 200-Day Moving Average: Should Investors Sell?

On January 4, 2025, shares of Fidus Investment Co. (NASDAQ:FDUS) traded above their 200-day moving average, which stands at $19.97. During the trading session, the stock reached a high of $21.40 before closing at $21.19. The day's trading volume was 189,215 shares, indicating active interest from investors.

Current Stock Performance

Fidus Investment's share price is currently down by 0.6%. The company boasts a market capitalization of approximately $718.66 million, a price-to-earnings (P/E) ratio of 7.57, and a beta of 1.39, suggesting that it exhibits higher volatility compared to the market overall. Its 50-day and 200-day moving averages are $20.62 and $19.97, respectively.

Earnings Report and Financial Performance

Fidus Investment recently announced its quarterly earnings on October 31st. The asset manager reported earnings per share (EPS) of $0.61, which exceeded the analysts' expected EPS of $0.57 by $0.04. The reported revenue was $38.38 million, surpassing the consensus estimate of $36.43 million. The company maintained a return on equity of 12.11% and a notable net margin of 60.09%. However, it is important to note that the EPS from the same quarter last year was $0.68. Analysts project that Fidus Investment will achieve an EPS of 2.28 for the current fiscal year.

Dividend Increase Announced

On December 27, Fidus Investment announced an increase in its quarterly dividend. Shareholders received $0.61 per share, up from the previous dividend of $0.57. This translates to an annualized dividend of $2.44, providing investors with a yield of 11.51%. The company’s current dividend payout ratio stands at 61.43%.

Institutional Investors' Activity

Recent trading activity shows that several hedge funds adjusted their positions in Fidus Investment. For instance, Van ECK Associates Corp increased its stake by 11.5% in the third quarter, now holding 809,411 shares valued at approximately $15.81 million after acquiring 83,538 additional shares. Similarly, Cetera Investment Advisers raised its holdings by 18.1% in the second quarter, totaling 233,826 shares worth about $4.55 million. Other institutions, such as Hennion & Walsh Asset Management Inc. and Franklin Resources Inc., have also made adjustments to their Fidus Investment positions, reflecting significant institutional interest in the stock. Currently, institutional investors own about 28.14% of the company's shares.

About Fidus Investment

Fidus Investment Corporation operates as a business development company specializing in various financial strategies. Its focus includes leveraged buyouts, refinancing, strategic acquisitions, and mezzanine financing, among other investment avenues. The company actively seeks opportunities for growth capital and lower middle-market investments.

Conclusion

As Fidus Investment's stock surpasses its 200-day moving average, investors may ponder whether it's the right time to sell. With the company’s increasing dividends and strong earnings performance, many may view this development positively. Nonetheless, potential investors and current shareholders should consider the full picture, including market conditions and individual financial goals before making any decisions.

Fidus, Investment, Stock