Positioning no disclosures inside 60 days, left as found
Options no verdict drawn today, left as found
Ethical does not pass the values gate
Price23.04 USD
Fair value29.00
Ethical score90.7/100
RatingOPPORTUNITY
Our investment reviews on this name
2026-10-02Read Markdown23.04+0.0% to today
2026-07-25Read Accumulation24.30-5.2% to today
2026-07-02Read Distribution23.21-0.7% to today ✓
Our analytic regime reads on this name, dated and marked against the screened price. Small sample per name, and separate from the daily-framework accuracy on the Track Record page.
Capital Southwest Corporation holds its Markdown at $23.04. Consolidating, no directional conviction, held for 340 days.
As held on the ledger · 2026-09-24
Phase
Markdown · caution
Quantitative state
Consolidating, no directional conviction, held for 340 days
Price at the screen
$23.04
Valuation
12.73 trailing · 9.87 forward price to earnings
Values screen
FAIL· score 90.7
Beta
0.74
The Workings
Five Screens, Shown in Full
Does not pass. Business activity: conventional financial services (interest-based)
Test
Figure
Limit
What it means
Status
Business activity
Excluded
Core business clean
Its core business involves an activity the values screen does not clear.
Fail
Debt load
23.47%
Below 33%
Interest-bearing debt is just 23.5% of its assets, well under the one-third ceiling: it does not run on borrowed money.
Pass
Interest-bearing cash
1.06%
Below 33%
Cash held in interest-bearing accounts and securities is 1.1% of assets, under the one-third limit.
Pass
Receivables
0.00%
Below 49%
Money owed to the company is 0.0% of assets, under the 49% limit.
Pass
Revenue purity
0.00%
Below 5%
Only 0.0% of revenue comes from non-compliant sources, under the 5% line.
Pass
Five checks adapted from AAOIFI screening standards: business activity plus four balance-sheet ratios. All five must pass for ethical clearance. Every figure is arithmetic on public accounts, not judgement.
The Ethical Read
Why It Falls Short, in Plain English
Capital Southwest does not clear the screen at the business-activity stage. It operates in conventional financial services, which the screen treats as interest-based, so the financial ratios are not the deciding factor here.
Read as at 2026-10-04. It updates when the underlying figures move, and past reads are kept below.
What the Numbers Say It Is Worth
The Fair Value Range
Our framework reads OPPORTUNITY: it trades at roughly a 26% discount to our $29.00 fair value, moderate competitive moat, 9.10% revenue growth.
Fair value range in USD, drawn from the 2026-09-24 screen. The gold marker is the market price at the same screen. A 25.9% margin of safety to the base estimate.
Third-party analyst targets: 5 covering, consensus None. The average target sits +11% from the screen price.
Reading the gap · Both our model and the analysts see meaningful upside from here.
Price History & Projections
Where it has been, where the models see it going. History from market close data; projection points are our fair-value estimates and third-party analyst targets, dated to the 2026-09-24 screen.
Fair value and rating are our own model estimates; the Street's range reflects third-party analyst estimates. Analysis, not advice.
The Business, in Plain Words
Middle Market Credit at a Discount to Value
Every time a smaller US firm needs flexible capital that big banks turn away, a business development company steps in to fill the gap with mezzanine debt and equity stakes. Capital Southwest does exactly that in the lower middle market, and the shares sit 19% below our fair value at the current price with a forward multiple of just 10.9 times.
The standout features are a 49% profit margin, a moderate competitive moat, and passage through our ethical screen, all while four analysts carry a buy consensus. Revenue has slipped 4% yet return on equity holds at 12%, which suggests the core lending book is still generating solid cash returns even in a softer growth patch.
Risk sits in the negative top line trend and the moderate moat, which leaves room for larger players to crowd returns if credit spreads tighten. Cyclical exposure to smaller borrowers adds further volatility that a low multiple alone does not erase.
The risks · The things to watch: it's a small-cap, so the share price can swing harder than the market.
Plain-English interpretation of our own screen data. Analysis, not advice.
Where & How to Trade
CSWC trades on Nasdaq. As a listed security it is accessible through almost any international broker offering its home market. New to this, or investing from abroad? Our guide to accessing global markets covers brokers, currencies and the practical steps.
The Dated Journal · Newest First, Never Edited
Every Entry, As Written
2026-10-02Markdown · changed$23.04-6.2%Entry 6
The framework has shifted from accumulation to markdown since the last review. Price is trending lower. Sellers are in control and the prior trend has reversed. Price has moved down 6.2% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 27%. Our forward projection puts the odds of a 10% gain over the next month near 12%. The street (5 analysts) rates it buy, with a mean price target of $25.
2026-08-26Accumulation$24.56+1.1%Entry 5
The framework reads accumulation. Smart money appears to be quietly building positions. This typically precedes a markup phase. Price has moved up 1.1% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 27%. Our forward projection puts the odds of a 10% gain over the next month near 12%. The street (5 analysts) rates it buy, with a mean price target of $25.
The framework has shifted from distribution to accumulation since the last review. Smart money appears to be quietly building positions. This typically precedes a markup phase. Price has moved up 4.7% since our last review. Ethical screening: PASS with near-perfect ethical score. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 27%. Our forward projection puts the odds of a 10% gain over the next month near 12%. The street (5 analysts) rates it buy, with a mean price target of $25.
2026-07-18Distribution$23.21+0.0%Entry 3
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: PASS with near-perfect ethical score. The risk-adjusted return profile shows modest positive risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 27%. Our forward projection puts the odds of a 10% gain over the next month near 12%. The street (5 analysts) rates it buy, with a mean price target of $25.
2026-07-03Distribution$23.21+0.0%Entry 2
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: PASS with near-perfect ethical score (91). The risk-adjusted return profile shows modest positive risk-adjusted returns.
2026-07-02Distribution$23.21Entry 1
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Ethical screening: PASS with near-perfect ethical score (91). The risk-adjusted return profile shows modest positive risk-adjusted returns.
Each entry above was written on its date, before the outcome. A journal you can prune is not a journal.
