MeritValue

Stellus Capital Investment Corp

SCMdata completeness 75%6 fiscal years on file

Data notes: no data for concept 'capex'; no data for concept 'totalDebt'; no data for concept 'pretaxIncome'

The thesis, from the filings

Stellus Capital Investment Corp earns about 8% on equity, but has diluted owners by 46% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $9.88 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$61.5M1$73M2$102M3$99.9M3$97.8M3
Net income$33.6M4$14.5M5$17.5M6$45.8M6$27M6
Operating cash flow−$76.1M7−$56.3M8−$17.3M9−$28.6M9−$24.4M9
Capital expenditure—————
Free cash flow (derived)—————
Total debt—————
Cash & equivalents$44.2M10$48M11$26.1M12$20.1M13$25.1M13
Diluted shares19.5M19.6M22.0M25.6M28.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$130.86
your share of equity
Profit it earned you last year
$9.53
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $130.86 of net worth that earned you $9.53 last year.

iii. Is this a good business?
Moat signal · return on equity
8% avg · 5y
FY21 12%FY22 5%FY23 5%FY24 12%FY25 7%

It earned an average 8% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+46% shares · 5y

Share count is up 46% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$9.88
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$27M
  • growthAssumed0.0%
Graham Number
$16.72
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-24-002368 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-002182 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0001104659-26-026432 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-002368 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-002182 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001104659-26-026432 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-002368 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-002182 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001104659-26-026432 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-23-002415 (CashAndCashEquivalentsAtCarryingValue)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-24-002368 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2023-12-31 · accession 0001558370-25-002182 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2024-12-31 · accession 0001104659-26-026432 (CashAndCashEquivalentsAtCarryingValue)