B. Riley Financial Inc (RILY, Financial) has experienced a remarkable surge in its stock price, with a 75.65% gain over the past week and a 74.94% gain over the past three months. The company's market capitalization now stands at $1.2 billion, with a current price of $39.68. Despite this impressive performance, the GF Value suggests a valuation of $62.03, down from a past GF Value of $73.75. This indicates that the stock may be a possible value trap, and investors should think twice before making a decision. The current and past GF Valuations both signal caution, maintaining the status of a possible value trap.
Overview of B. Riley Financial Inc
B. Riley Financial Inc, operating within the diversified financial services industry, is a multifaceted company providing a range of services including investment banking, financial consulting, and asset disposition. The company caters to corporate, institutional, and high net worth clients across North America and Europe. Its diverse operating segments include Capital Markets, Wealth Management, Financial Consulting, Auction and Liquidation, Communications, and Consumer segment. This broad spectrum of services positions B. Riley Financial as a versatile player in the financial sector.
Assessing Profitability
B. Riley Financial's Profitability Rank is a solid 7 out of 10, reflecting a relatively strong position within its industry. The company's operating margin stands at 6.38%, which is commendable compared to 51.58% of its peers. However, the Return on Equity (ROE) is at a concerning -25.81%, although it still outperforms 17.15% of the industry. The Return on Assets (ROA) is -1.60%, and the Return on Invested Capital (ROIC) is 1.26%, both showing better performance than a significant portion of their competitors. B. Riley has maintained profitability for 7 out of the past 10 years, a testament to its enduring business model.
Growth Trajectory
The company's Growth Rank is 4 out of 10, indicating moderate growth. B. Riley has demonstrated a 3-Year Revenue Growth Rate per Share of 15.30%, surpassing 71.6% of its industry counterparts. The 5-Year Revenue Growth Rate per Share is even more impressive at 23.90%, outperforming 88.57% of the industry. These figures suggest that B. Riley Financial has been expanding its revenue streams effectively over the past few years.
Notable Shareholders
Chuck Royce (Trades, Portfolio) is the leading shareholder with 744,497 shares, representing a 2.43% stake in the company. Following him is First Eagle Investment (Trades, Portfolio), holding 131,185 shares, which translates to a 0.43% share percentage. Paul Tudor Jones (Trades, Portfolio) also has a significant position with 77,000 shares, accounting for 0.25% of the company's shares. The confidence of these prominent investors may signal a positive outlook for B. Riley Financial's future.
Competitive Landscape
When compared to its competitors, B. Riley Financial stands out with its $1.2 billion market cap. LendingTree Inc (TREE, Financial) has a market cap of $484.801 million, while Financial Gravity Companies Inc (FGCO, Financial) is valued at $27.630 million. Bajaj Finserv Ltd (BOM:532978, Financial), on the other hand, has a significantly larger market cap of $31.62 billion. This comparison highlights B. Riley's competitive position within the diversified financial services industry.
Concluding Thoughts
In conclusion, B. Riley Financial Inc's stock performance has been extraordinary in recent months, with significant gains that have caught the attention of investors. However, the GF Value suggests caution, labeling the stock as a possible value trap. The company's profitability metrics, while mixed, show resilience, and its growth rates are commendable. The positions held by significant investors like Chuck Royce (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), and Paul Tudor Jones (Trades, Portfolio) add a layer of confidence in the stock. Finally, when compared to its competitors, B. Riley holds a strong market presence, although it operates in a highly competitive environment. Investors should weigh these factors carefully when considering B. Riley Financial as a potential addition to their portfolios.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
