U.S. Global Investors, Inc. (NASDAQ:GROW) is a publicly traded money manager that actually has its roots as an investment club. GROW hit the scene about a decade ago, and famously binged on commodity-related plays during the inflationary boom of last decade before crashing back down to Earth in the 2008-09 recession.
More recently, the stock has been range bound, and may be starting to get some traction as the financial environment shifts gears and investors are forced to deal with a steepening of the yield curve. The stock’s chart shows 9% tacked on to share pricing over the past week. Moreover, GROW has seen interest climb, and we would hasten to point out the very tight float here (under 12M shares), suggesting the potential for some squeezing action if GROW hits a strong patch.
U.S. Global Investors, Inc. (NASDAQ:GROW) promulgates itself as a publicly owned investment manager. The firm primarily provides its services to investment companies. It also provides its services to pooled investment vehicles. The firm manages equity and fixed income mutual funds for its clients.
It also launches and manages hedge funds investing in alternative investment markets for its clients. The firm invests in the public equity and fixed income markets across the globe. It invests in value stocks to make its equity investments. The firm employs fundamental and technical analysis with bottom-up and top-down analysis to make its investments. It typically invests in companies specializing in gold and natural resources.
Headquartered in San Antonio, Texas, the company provides money management and other services to U.S. Global Investors Funds, the U.S. Global Jets ETF and other international clients.
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The big picture here appears to be GROW’s interest in developing active management ETF products. This is the trend to watch with this Company.
Among many catalysts here, the company has filed to work on a particular smart-beta gold equity ETF.
Frank Holmes, U.S. Global Investors, Inc. CEO and CIO, recently commented in an earnings call: “one of the things I just share with investors, when you launch this, you really have to make sure you put in the thousands and thousands of hours of regression analysis, because once it goes out in the marketplace, it has to be able to show its resiliency, both in rising gold prices, falling gold prices, rising currency, falling currency, changes around the world. So we feel that we have done the — it’s probably pushing 4,000 hours of quantitative research and making sure that we get this product launched and through the regulatory process, it will have tremendous survivorship and exceptionally competitive versus the other gold ETFs that are out there, particular the gold equity ETFs.”
The Company has heavy exposure to gold miners at the moment as well, based on its various strategies. According to their own statements, they believe shares of GROW may actually trade at times as a proxy for a gold mining passive ETF, like GDX.
At this time, carrying a capital value in the market of $26.2M, GROW has a significant war chest of cash and cash equivalents ($14.10M), along with total assets of nearly $27M, which compares with very little total accumulated debt. The stock is on a hair-trigger with a float under 12M shares. With both the FOMC and Bank of Japan out this week, and monetary policy back at the center of discussion, GROW is one to keep on the radar given its tether to the gold sector. Some of the smartest folks on the planet, such as George Soros, Stanley Druckenmiller, and David Einhorn, are convinced we are in a new secular bull market in gold. If true, GROW stands to re-emerge as a major market leader. This is a story you’ll want to follow. To get the full story on GROW subscribe below to Oracle Dispatch right now.