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01/11 16:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company's earnings call highlights several positive aspects, including increased operating revenues, net income, and a strong shareholder return plan with ongoing buybacks and dividends. Despite some challenges like decreased AUM and increased expenses, the optimistic outlook on thematic ETFs, gold, and Bitcoin, along with strategic investments, suggests potential growth. The positive sentiment is further bolstered by the company's belief in stock undervaluation and buyback strategy, indicating a positive stock price movement in the short term.
Quarterly average assets under management $1.4 billion, slightly down year-over-year but rebounding from a larger decline 6 months ago. The rebound is attributed to improved stability in certain asset classes, particularly gold-related investments.
Operating revenues $2.25 million for the quarter, an increase of $94,000 or 4% year-over-year. The increase is primarily due to higher advisory and administrative fees for equity mutual funds, partially offset by a decrease in ETF fees.
Net income $1.5 million or $0.12 per share, an increase of $1.2 million compared to $315,000 or $0.02 per share in the same quarter last year. The increase is attributed to higher net investment income due to unrealized gains on other investments.
Operating expenses Increased by $50,000 or 2% year-over-year, mainly due to a $101,000 or 9% rise in employee compensation (reflecting higher bonuses) and a $52,000 or 48% increase in advertising expenses related to expanded ETF marketing efforts. These were partially offset by a $93,000 decrease in general and administrative expenses.
Operating loss $515,000 for the quarter, compared to $559,000 in the same quarter last year. The improvement is due to higher operating revenues and controlled expense increases.
Other income $2.4 million for the quarter, an increase of $1.4 million compared to $995,000 in the prior year. The increase is primarily due to higher net investment income from unrealized gains on other investments.
Cash and cash equivalents $24.6 million as of September 30, 2025, an increase of $34,000 since June 2025. The company maintains a strong balance sheet with high levels of cash and investments.
Current investments $9.7 million as of September 30, 2025.
Stockholder equity Net operating working capital of $37.2 million and a current ratio of 20.5:1 as of September 30, 2025.
Share repurchase program 159,074 Class A shares repurchased using approximately $400,000 by the end of September 2025. The program is part of the company's strategy to enhance shareholder value.
Smart Beta 2.0 Products: The company focuses on creating thematic products using a quantamental strategy, which combines macro and micro factors for portfolio construction.
AI Defense ETF: Launched a new product focused on AI applications in defense and military rebuilding, which has performed well in its first 9 months.
Gold Royalties and Streamers: This product has achieved a 92% increase, aligning with its model predictions.
Gold Market: Gold reached an all-time high of $4,300, with increased interest in gold equities and ETFs.
Global Shipping: Shipping rates have rebounded and remain strong, capturing global trade activity.
Aviation and Travel: European and Asian travel markets are booming, while the U.S. market faces challenges due to TSA-related issues.
Stock Buyback Program: Repurchased 159,074 Class A shares for approximately $400,000 as part of a strategy to enhance shareholder value.
Dividend Payments: Continued monthly dividend payments since 2007, with a current yield of 3.46%.
Financial Performance: Quarterly operating revenues increased by 4% to $2.3 million, while net income rose to $1.5 million, a significant improvement from the previous year.
Focus on Gold and Resources: The company emphasizes gold and natural resources as key investment areas, supported by global debt trends and diversification benefits.
Marketing and Subscriber Growth: Expanded marketing efforts, including YouTube content and white papers, to grow the subscriber base and educate investors.
Sustainability and Innovation: Investing in thematic, sustainable products and leveraging smart beta strategies for long-term growth.
Volatility in Gold and Gold Stocks: The company's asset class composition heavily relies on gold and gold stocks, which are subject to significant volatility. This could impact the company's financial performance and investor sentiment.
Challenges in Launching New Products: Despite good fund performance and unique asset classes, the company faces increasing costs and difficulties in effectively communicating the value of new products to potential investors.
Apathy in Gold Investments: There is a noticeable lack of substantial flows into gold equities despite gold reaching all-time highs. This apathy could hinder the growth of the company's gold-related products.
Impact of Tariff Wars and Economic Conditions: Tariff wars and challenging macroeconomic conditions have previously impacted the company's funds and could continue to pose risks to revenue and asset stability.
Decline in Average Assets Under Management: The company's average assets under management have slightly decreased compared to a year ago, which could affect revenue generation.
Sentiment in the Airline Industry: Negative sentiment in the U.S. airline industry, exacerbated by government shutdowns and TSA-related issues, could impact the performance of the company's airline-focused products.
Global Debt Levels: Rising global debt levels, including U.S. debt at $48 trillion, could create economic uncertainties that may indirectly affect the company's operations and investment strategies.
Increased Operating Expenses: Operating expenses have risen due to higher employee compensation and advertising costs, which could pressure profit margins.
Revenue and Financial Projections: The company expects steady cash flow despite volatile and challenging macro market conditions. It continues to maintain a strong balance sheet with cash and investments, and plans to buy back stock on flat or down days while paying a monthly dividend.
Gold and Precious Metals Outlook: Gold has reached an all-time high of $4,300 and is expected to remain bullish despite recent corrections. The company anticipates continued strong performance in gold-related assets and equities, supported by global economic conditions and rising debt levels.
Market Trends and Product Performance: Thematic products like Global Resources and World Gold shares are rebounding, with strong performance in gold, luxury goods, and resource commodities. The company expects continued growth in these areas, supported by increasing investor interest and market dynamics.
New Product Launches: The company has launched new thematic ETFs, including AI Defense and Global Shipping, which are expected to capture growth in military rebuilding and global trade, respectively. These products are anticipated to perform well in the coming quarters.
Strategic Investments: The company is increasing its exposure to the Bitcoin ecosystem and other unique products that generate yield. It also plans to leverage M&A opportunities to acquire fund groups and expand its market presence.
Monthly Dividend: The company has paid a monthly dividend since June 2007. The current yield at the share price of $2.60 is 3.46%.
Shareholder Yield: The company's shareholder yield, which combines dividends and buybacks, is much higher than a 5-year bond. The 5-year yield is 3.74%, the 10-year is 4.16%, and the long-term shareholder yield (dividends plus buybacks) is 8.32%.
Share Repurchase Program: The company has been buying back stock using an algorithm on flat and down days. For the end of September, 159,074 Class A shares were repurchased using approximately $400,000. The company buys back shares when the price is flat or down from the previous trading day.
Stock Undervaluation: The company believes its stock is undervalued and uses buybacks as part of its strategy to enhance shareholder value.
The company's earnings call highlights several positive aspects, including increased operating revenues, net income, and a strong shareholder return plan with ongoing buybacks and dividends. Despite some challenges like decreased AUM and increased expenses, the optimistic outlook on thematic ETFs, gold, and Bitcoin, along with strategic investments, suggests potential growth. The positive sentiment is further bolstered by the company's belief in stock undervaluation and buyback strategy, indicating a positive stock price movement in the short term.
The earnings call reveals several negative factors: a significant decline in AUM leading to reduced revenues, a net loss compared to previous net income, and high operating expenses. Despite optimistic guidance on thematic ETFs and shareholder return efforts, these positives are overshadowed by market volatility, geopolitical risks, and dependency on key products. The Q&A section's unclear management responses further contribute to uncertainty, reinforcing a negative sentiment. The stock is likely to experience a negative reaction of -2% to -8% over the next two weeks due to these challenges.
The earnings call summary presents a mixed picture. The company is actively enhancing shareholder value through buybacks and dividends, and has a strong financial position with no long-term debt. However, there are concerns about decreased revenues and operating income, along with challenges in raising assets under management. The strategic focus on thematic investing and gold offers potential upside, but risks related to market volatility and competition persist. Overall, the sentiment is balanced, leading to a neutral stock price prediction over the next two weeks.
The earnings call reveals mixed signals. The strong buyback program and dividend yield are positive, but declining revenues and net income, along with market challenges, balance out the positives. The Q&A section didn't provide additional clarity, leaving uncertainties unaddressed. Overall, the sentiment is neutral as the positive shareholder returns are offset by financial declines and market risks.
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