Fund Increases Holdings: Is This Stock a Good Buy?

FSK +2.43%

Key Points

• Stake increased by 708,930 shares, with position value rising by $10.50 million

• New holding: 723,508 shares valued at $10.80 million

• The position now represents 1.46% of fund AUM, which places it outside the fund's top five holdings

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Gateway Wealth Partners, LLC reported a significant increase in its stake in FS KKR Capital Corp. (NYSE:FSK), adding 708,930 shares and increasing the position’s value by approximately $10.50 million, according to its SEC filing for the period ended September 30, 2025.

What Happened

Gateway Wealth Partners, LLC disclosed in a November 05, 2025, SEC filing that it increased its position in FS KKR Capital Corp. by 708,930 shares in Q3 2025. The position rose in value to $10.80 million, corresponding to 1.46% of the fund’s reportable U.S. equity assets of $740.67 million. The fund reported a total of 410 equity positions.

What Else to Know

The buy brings FSK to 1.46% of Gateway Wealth Partners’ 13F assets as of September 30, 2025, placing it outside the top five holdings.

Top holdings after the filing:

• SPYM: $21,311,800 (2.88% of AUM) as of September 30, 2025

• SPY: $19,006,279 (2.57% of AUM) as of September 30, 2025

• AAPL: $16,619,168 (2.24% of AUM) as of September 30, 2025

• AMLP: $13,840,112 (1.87% of AUM) as of September 30, 2025

• AVUS: $12,594,737 (1.70% of AUM) as of September 30, 2025

As of November 05, 2025, shares were priced at $14.79, down 16.0% over the past year; shares have trailed the S&P 500 by 34 percentage points.

Company Overview

Metric

Value

Price (as of market close 2025-11-05)

$14.79

Market Capitalization

$4.37 billion

Revenue (TTM)

$1.23 billion

Dividend Yield

17.93%

Company Snapshot

FS KKR Capital Corp. generates revenue primarily from interest income on senior secured and subordinated debt investments in private U.S. middle-market companies.

The company operates as a business development company, providing customized credit solutions and occasionally taking equity positions or warrants alongside debt investments.

Its core customers are private upper middle-market companies in the United States, typically with annual EBITDA between $50 million and $100 million.

FS KKR Capital Corp. is a business development company focused on delivering tailored credit solutions to private middle-market firms in the U.S. The company specializes in senior secured lending and occasionally receives equity interests alongside debt investments.

Foolish Take

Gateway Wealth Partners, a Wisconsin-based investment management firm, recently disclosed an acquisition of more than 700,000 shares of FS KKR Capital stock, worth roughly $10.5 million. Here's what retail investors need to know.

This acquisition raised Gateway's total position in FS KKR Capital stock to about $10.8 million, making this one of Gateway's largest overall positions. Indeed, FS KKR Capital stock is now the firm's ninth-largest position, representing 1.46% of total assets under management.

As for performance, FS KKR Capital stock has not performed all that well recently. Over the last three years, shares have generated a total return of 25%, equating to a compound annual growth rate (CAGR) of 7.9%. That compares unfavorably to the S&P 500, which has generated a total return of 72% over the same period with a CAGR of 19.9%.

FS KKR Capital stock does boast a significant dividend, with a current dividend yield of 17.93%, owing to its business model which generates revenue through interest income on its portfolio of private market lending.

Given its complex business model, and long-term underperformance when compared to the S&P 500, average investors may wish to explore other options instead of FS KKR Capital stock.

Glossary

13F reportable assets: Assets disclosed by institutional investment managers in quarterly SEC Form 13F filings, covering certain U.S. securities.Assets under management (AUM): The total market value of investments managed by a fund or investment firm on behalf of clients.Business development company (BDC): A publicly traded investment company that provides financing to small and mid-sized businesses, often through debt and equity.Senior secured debt: Loans or bonds backed by collateral and prioritized for repayment if the borrower defaults.Subordinated debt: Debt that ranks below other loans for claims on assets or earnings in the event of default.Equity positions: Ownership interests in a company, typically in the form of stock or shares.Warrants: Financial instruments giving the holder the right to buy a company's stock at a specific price before expiration.Middle-market companies: Businesses that are larger than small enterprises but smaller than large corporations, often defined by annual revenues or EBITDA.EBITDA: Earnings before interest, taxes, depreciation, and amortization; a measure of a company's operating performance.Dividend yield: Annual dividend payments divided by the share price, expressed as a percentage.Trailing: Refers to performance measured over a past period, such as the last year.TTM: The 12-month period ending with the most recent quarterly report.

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Jake Lerch has the following options: long December 2025 $650 puts on SPDR S&P 500 ETF Trust and short December 2025 $660 puts on SPDR S&P 500 ETF Trust. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

Fund Increases Holdings: Is This Stock a Good Buy? was originally published by The Motley Fool