Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, private equity firm Prospect Capital (NASDAQ:PSEC) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Prospect's business and see what CAPS investors are saying about the stock right now.

Prospect Capital facts

Headquarters (Founded)

New York City (1988)

Market Cap

$548.2 million


Closed-end fund

Trailing-12-Month Revenue

$99.9 million


Chairman/CEO John Barry, III
COO M. Grier Eliasek

Return on Equity (Average, Past 3 Years)


Dividend Yield


Other Highly Rated Asset Managers

Legg Mason (NYSE:LM)
Brookfield Asset Management (NYSE:BAM)

CAPS Members Bullish on PSEC Also Bullish on

General Electric (NYSE:GE)
Johnson & Johnson (NYSE:JNJ)

CAPS Members Bearish on PSEC Also Bearish on

Bank of America (NYSE:BAC)
Citigroup (NYSE:C)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 467 members who have rated Prospect believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars ikkyu2 and latimerburned, both of whom are ranked in the top 5% of our community.

Last month, ikkyu2 helped explain Prospect to prospective purchasers:

A mezzanine-debt issuing closed-end investment fund using 'public equity' to, mainly, finance operations of small companies that own energy-producing assets like oil rigs and natgas wells. They just acquired a distressed closed-end equity fund called [Patriot Capital] at massive discount to book.

In a pitch from two weeks later, latimberburned elaborates on Prospect's prospects:

Prospect just bought Patriot for 54% of its equity value. The deal is supposed to be 10 cents accretive to earnings and they say they are on the look out for similar deals for the over leveraged peers. They look like a winner in this financial crisis and should become a much larger player in the middle market for debt. I like them a lot. Also as a [Business Development Company] they pay out nearly all of their earnings as a dividend which is around 15% today.

What do you think about Prospect, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Legg Mason is a Motley Fool Inside Value pick, Brookfield Asset Management is a Global Gains choice, and Johnson & Johnson is a selection of Income Investor. The Fool owns shares of Legg Mason. The Fool's disclosure policy always gets a perfect score.