The following is a summary of the Capital Southwest (CSWC) Q3 2025 Earnings Call Transcript:
Financial Performance:
Pre-tax net investment income was $30.7 million, or $0.64 per share.
Total investment income increased to $52 million, up from $48.7 million in the prior quarter.
Paid a regular dividend of $0.58 per share and increased the supplemental dividend to $0.06 per share.Expects a further $0.10 to $0.15 per share increase in UTI balance at the end of the March quarter from potential realized gains.
Business Progress:
Issued $230 million in convertible notes and redeemed $140 million of January 2026 notes.
Received a green light from the SBA for a second SBIC license, expected approval imminently.
Equity portfolio marked at 143% of cost, showing significant unrealized gains indicative of growth potential from lower middle market businesses.
Opportunities:
Robust deal flow in the lower middle market with strong relationships across 80 unique private equity firms.
Portfolio diversification across industries provides stability and risk mitigation.
Increased visibility on potential exits could lead to meaningful realized gains later in 2025.
Risks:
Competitive market environment with some spread compression on new deals.
Anticipated effects of tariffs and immigration policies on portfolio companies with government contracts or those impacted by international trade.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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