August 23, 2021

Insider Buying at Bryant Riley

 From InsiderArbitrage:

 

Shares of B. Riley Financial were acquired by 3 insiders:

  • Chairman and Co-CEO Bryant R. Riley acquired 150,000 shares, paying $60.90 per share for a total amount of $9.14 million. Mr. Riley increased his stake by 2.97% to 5,198,633 shares with this purchase.
  • Director Randall E. Paulson acquired 10,000 shares, paying $60.82 per share for a total amount of $608,220. Mr. Paulson increased his stake by 11.18% to 99,417 shares with this purchase.
  • CEO B. Riley Securities, Inc. Andrew Moore acquired 5,000 shares, paying $63.70 per share for a total amount of $318,500. Mr. Moore increased his stake by 2.22% to 229,758 shares with this purchase.

B. Riley is a financial services firm that kept showing up on my radar multiple times over the years either because it was acquiring public companies, was buying back its own stock or because multiple insiders were buying the stock. I started digging into the company and its myriad lines of businesses and the more I looked into it, the more I liked what I saw.

The company was founded in 1997 as a boutique research firm focused on small-cap stocks. The company went public in 2014 by merging with the publicly traded financial advisory firm Great American Group. The stock has appreciated 232% since that merger was consummated on June 18, 2014. This compares with a gain of 32% in the Russell 2000 index over the same period.

The company provides investment banking services, wealth management services (over $10 billion in assets under management), appraisals, specialty financial advisory services and retail liquidation services in addition to owning certain companies outright.

Their advisory services businesses combined with their recent penchant to acquire brands or companies outright makes me think of B. Riley as a baby Berkshire Hathaway. The siren call of discovering the next Berkshire Hathaway or the next Warren Buffett has lead many investors astray and the investment landscape is littered with the ghosts of Eddie Lampert, Sardar Biglari, Prem Watsa, etc. That said, the more I looked into B. Riley, the more intrigued I was by the company. While the stock has appreciated handsomely from its March lows, the enterprise value of the company is just $752.27 million (market cap of $684.17 million, plus $55.6 million of preferred shares and $12.5 million of net debt) and I expect years of growth from the company as it navigates a potentially challenging macroeconomic landscape

 

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