Hennessy Advisors (HNNA) announced full year earnings of $0.16/share and $913,000 in net income on Friday. Since it trades OTC, there is no SEC filing. The company trades at 10x earnings net of cash, has no balance sheet issues, and requires next to nothing in capital expenditures to maintain their position. As of year end, profit margins expanded from 10% seen in previous quarters to 12%, showing the leverage in the business model to increasing revenue. Earnings are only stated up to September 30th, and the stock market has continued to perform well relative to year-ago comparissons. At this moment, the health of the company and earnings are probably greater than is publicly available.
The one negative is the increase in the share count, albeit by a very modest amount. The stock repurchase announcement was made in August, so I would have expected to see a slight decrease to no change.
All things considered, this validates the basic thesis: improving equity markets are boosting earnings and the company trades at a discount to earnings and AUM/EV of other asset managers.
Here is the press release:
http://www.prnewswire.com/news-releases/hennessy-advisors-inc-announces-annual-earnings-of-016-per-share-111289279.html
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