Critical Survey: Heritage Global (HGBL) versus Its Competitors

Heritage Global (NASDAQ:HGBL) is one of 341 publicly-traded companies in the “Financial Services” industry, but how does it contrast to its peers? We will compare Heritage Global to similar businesses based on the strength of its dividends, institutional ownership, profitability, analyst recommendations, earnings, risk and valuation.

Institutional and Insider Ownership

33.5% of Heritage Global shares are held by institutional investors. Comparatively, 43.0% of shares of all “Financial Services” companies are held by institutional investors. 15.6% of Heritage Global shares are held by company insiders. Comparatively, 21.9% of shares of all “Financial Services” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Heritage Global and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Global	1	0	1	0	2.00
Heritage Global Competitors	1983	6927	11685	444	2.50

Heritage Global presently has a consensus target price of $3.00, suggesting a potential upside of 138.10%. As a group, “Financial Services” companies have a potential downside of 6.45%. Given Heritage Global’s higher possible upside, equities analysts clearly believe Heritage Global is more favorable than its peers.

Valuation & Earnings

This table compares Heritage Global and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Heritage Global	$50.98 million	$3.59 million	-3.07
Heritage Global Competitors	$11.46 billion	$1.09 billion	7.63

Heritage Global’s peers have higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

Heritage Global has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Heritage Global’s peers have a beta of 2.51, indicating that their average stock price is 151% more volatile than the S&P 500.

Profitability

This table compares Heritage Global and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Global	-29.63%	6.12%	4.69%
Heritage Global Competitors	-412.58%	-39.71%	-5.80%

Summary

Heritage Global peers beat Heritage Global on 9 of the 13 factors compared.

Heritage Global Company Profile

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.