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Upturn AI Summary - About
Stellus Capital Investment(SCM)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for SCM
10/23/2026: SCM (1-star) is currently NOT-A-BUY. Pass it for now.
Stellus Capital Investment (SCM) is a business development company (BDC) that provides debt and equity financing to lower middle-market companies. The company is primarily suited for income-focused investors who prioritize steady, monthly dividend distributions over high capital appreciation. Its strengths include a disciplined approach to lending and an experienced management team capable of navigating complex credit cycles. However, investors should be mindful of risks including portfolio concentration, potential economic downturns impacting borrower defaults, and the inherent leverage associated with the BDC model. Monitoring the company's net investment income coverage and the stability of its net asset value is essential for assessing long-term investment viability.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Weak fit | BDCs are primarily income vehicles rather than high-growth capital appreciation stocks. |
| Momentum investor | Mixed fit | Momentum may be inconsistent; treat as conditional on positive yield spreads and sector trends. |
| Value investor | Mixed fit | The stock often trades relative to its NAV, providing opportunities when the discount is wide. |
| Dividend investor | Strong fit | The monthly dividend structure is designed specifically for income-oriented portfolios. |
| Low-risk investor | Weak fit | BDC investing involves inherent credit and leverage risks that may exceed low-risk tolerance. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | Medium / high | BDC share prices can fluctuate based on interest rate sentiment and perceived credit quality. |
| Valuation risk | Medium | Trading at a significant premium or discount to NAV impacts the total return for investors. |
| Competition risk (private credit) | High | Excess capital chasing middle-market deals can compress yield spreads. |
| Business quality | Medium | Portfolio performance depends on the underwriting discipline of the external manager. |
| Dividend income | Medium / high | Dividends are sensitive to NII and the ability to avoid credit losses. |
| Execution risk | Medium | The manager must effectively manage leverage and portfolio credit risk through economic cycles. |
Price Behavior
Steep Decline
The stock price has dropped sharply with strong downward pressure.
Moderately Choppy
The stock has experienced noticeable price swings while retaining some directional structure.
Analysis of Past Performance
Type Stock | Historic Profit -10.99% | Avg. Invested days 30 | Today’s Advisory PASS |
Upturn Advisory Rating  | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 10/23/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 189.11M USD | Price to earnings Ratio 6.51 | 1Y Target Price 10.12 |
Price to earnings Ratio 6.51 | 1Y Target Price 10.12 | ||
Volume (30-day avg) 122.7K shares | Beta 0.71 | 52 Weeks Range 6.54 - 12.25 | Updated Date 10/24/2026 |
52 Weeks Range 6.54 - 12.25 | Updated Date 10/24/2026 | ||
Dividends yield (FY) 21.78% | Basic EPS (TTM) 1.02 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Interest Income | Interest earned on first-lien, second-lien, and unitranche loans provided to lower middle-market companies. | The company acts like a lender, earning interest from the loans it makes to businesses. |
| Dividend and Fee Income | Income from equity co-investments and advisory or structuring fees from portfolio companies. | Additional income is generated through fees and potential value gains from equity stakes in borrowers. |
Valuation
Trailing PE 6.51 | Forward PE 12.14 | Enterprise Value 783.39M | Price to Sales(TTM) 1.95 |
Enterprise Value 783.39M | Price to Sales(TTM) 1.95 | ||
Enterprise Value to Revenue 22.65 | Enterprise Value to EBITDA 11.75 | Shares Outstanding 28.48M | Shares Floating - |
Shares Outstanding 28.48M | Shares Floating - | ||
Percent Insiders 4.31 | Percent Institutions 14.03 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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