Wells Fargo today downgraded PSEC to underperform citing management's aggressive valuations on their CLO Equity Portfolio and their control investments. They have set a price target of between $5 - $5.50 per share.
It is gratifying that Wells Fargo, one of the leading BDC research group, confirms my opinion that PSEC overvalued their CLO Equity portfolio as of September 30, 2015. In fact, they included in their research the same analysis I did on PSEC's valuations against one of its peers, ECC. Please see below the chart I included in my article and a similar chart that Wells included in their article. While there is nothing novel in my decision to compare PSEC's marks againt one of its peers, it gratifying to see them agree with my analysis. As they say, imitation is greatest form of flattery.