How Bad Has 2018 Been to This Fund Firm?
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Friday, June 22, 2018

How Bad Has 2018 Been to This Fund Firm?

It's been a rough 2018 for U.S. Global Investors [profile]. Yet the longer term picture is a bit different.
Frank Holmes
U.S. Global

Shares in the San Antonio-based ETF shop (GROW on the Nasdaq) have fallen more than 70 percent since the beginning of 2018, as of market close yesterday. According to the San Antonio Business Journal, since December 22, 2017, GROW has fallen further than any other publicly traded company based in the Texas city. GROW is also down more year-to-date than any of the 18 other publicly traded mutual fund shops in the U.S.; its plunge is more than double that of the next worst performer of the group and nearly seven times the group's average slip. And all of that is while the S&P 500 is up 2 percent this year.

Last month, U.S. Global CEO Frank Holmes noted in the company's fiscal Q3 2018 earnings its quarterly net loss was most affected in an investment hit hard by the recent drop in the crypocurrency Ethereum. Then earlier this month U.S. Global's longtime president (also general counsel and chief compliance officer), Susan McGee, left the firm and no apparent successor has yet been named.

Yet if you widen your angle to the past 12 months, suddenly the GROW picture doesn't look that bad. The stock is actually up nearly 2 percent since June 23, 2017, a far cry from the S&P 500's 12.8 percent jump but not as far behind the 3.2 percent average of 19 asset managers (including GROW). By comparison, several asset managers have actually seen their shares plummet more than 20 percent year-over-year.

In the fiscal Q3 earnings report, Holmes also noted that, despite the recent rough patch, U.S. Global "has adequate liquidity to meet its current obligations," hasn't had long-term debt for 14 years, and even owns its HQ (meaning no rent!).

As of March 31, 2018, U.S. Global had $717 million in AUM. As of market close yesterday, its market cap was $23.323 million, which translates into 3.25 percent of its AUM.

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