Last update on 2024-06-07

US Global Investors (GROW) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

US Global Investors (GROW) Piotroski F-Score 2023: 5/9. Detailed analysis on profitability, liquidity, and efficiency. Discover if GROW is a strong investment.

Short Analysis - Piotroski Score: 5

We're running US Global Investors (GROW) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

US Global Investors (GROW) has a Piotroski F-Score of 5 out of 9, indicating an average financial position. The analysis looks at profitability, liquidity, and operating efficiency. Here are the highlights: 1. Profitability: GROW has positive net income and cash flow from operations for 2023. 2. Efficiency: The return on assets and the operating cash flow compared to net income are not improving. 3. Liquidity: GROW has very low leverage and increasing current ratio, and fewer shares outstanding, showing solid financial health. 4. Operating Efficiency: Both the gross margin and asset turnover ratios have decreased, indicating possible inefficiencies in operations compared to previous years and industry standards.

Insights for Value Investors Seeking Stable Income

Based on the analysis, US Global Investors (GROW) shows a mixed financial picture with some strengths in liquidity and stability but weaknesses in operational performance and efficiency. As an investor, it is worth further investigation, especially if you prioritize companies with strong liquidity and low debt. However, tread cautiously due to recent inefficiencies in operational performance which may affect long-term growth potential.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of US Global Investors (GROW)

Company has a positive net income?

Net income is a key indicator of a company's profitability within a given period. For the Piotroski Score, a positive net income is critical because it signifies that the company is generating earnings and is financially sound.

In 2023, US Global Investors (GROW) reported a net income of $3,149,000, which is positive, thereby earning 1 point for this criterion. Historically, the company's net income over the last 20 years has shown significant fluctuations. Notably, there was a remarkable peak in 2021 with $31,961,000, but also several years, such as 2009 and 2010, where net income was negative. The trend reflects the cyclical nature of GROW’s earnings, but 2023's positive income is a good sign of recovery after a turbulent period.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a key indicator of a company's financial health, showing whether it generates sufficient cash from routine business operations. A positive CFO is crucial for long-term viability as it suggests effective cash management and operational efficiency.

The CFO for US Global Investors (GROW) in 2023 stands at $2,910,000, which is positive. This adds 1 point to the Piotroski score. Historically, GROW's CFO has fluctuated significantly. Notable peaks were observed in 2008 ($14,309,886) and 2020 ($10,535,000), while substantial troughs occurred in 2013 (-$15,189,000) and 2019 (-$1,075,000). Despite these variances, the positive trend in 2023 and previous years (2020 and 2021) is a favorable indicator. This consistent generation of positive cash flow highlights the company's resilience and effective cash management practices.

Return on Assets (ROA) are growing?

ROA stands for Return on Assets and is an indicator of how profitable a company is relative to its total assets. It is important because it gauges management's efficiency in using its assets to generate earnings.

In 2023, US Global Investors (GROW) reported a ROA of 0.0552, slightly down from 0.057 in 2022. This translates to a decrease in the ROA value, signaling a slight decline in profitability relative to the company's total assets. Compared to the company's operational cash flow history and industry trends, the recent performance is less stellar. Given the median ROA for the industry trends significantly higher, often above 0.5 over the past two decades, GROW's current ROA highlights underperformance. Consequently, this criterion deserves a score of 0 as the ROA did not increase.

Operating Cashflow are higher than Netincome?

Analyzing whether the Operating Cash Flow is higher than the Net Income

Comparing the Operating Cash Flow of $2,910,000 with the Net Income of $3,149,000 in 2023, we observe that the Operating Cash Flow is lower. This indicates a less favorable trend according to Piotroski's criteria as it signals that income isn't adequately covered by cash flow from operations. This gives a point of zero in the index.

Liquidity of US Global Investors (GROW)

Leverage is declining?

Leverage measures the extent of a company's debt in relation to its equity. This metric is crucial for understanding a firm's financial risk.

In 2022, US Global Investors (GROW) had a leverage of 0.0011, which decreased to 0.0007 in 2023. This indicates a reduction in financial risk, as the company is using less debt to finance its operations. Historically, GROW has maintained a very conservative leverage approach. From 2003 to 2023, it has rarely relied on debt, peaking only modestly in 2003 at 0.1192. The recent reduction from 0.0011 to 0.0007 further solidifies this trend towards minimized financial leverage, showing prudent financial management. Therefore, this is a favorable trend, adding 1 point.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its current assets. It is important as it indicates the financial health of a company in the short-term and ensures that it can cover its liabilities.

In 2023, US Global Investors (GROW) reported a Current Ratio of 13.7373, an increase from the 9.2043 reported in 2022. This rise is significant as it signals enhanced short-term liquidity and financial stability. A higher Current Ratio means the company has more than enough assets to cover its short-term liabilities, which is positive. Historically, from 2003 to 2023, GROW has generally maintained a strong Current Ratio, often outperforming the Industry Median, which was 2.1006 in 2023. This positive trend earns GROW 1 point in the Piotroski Analysis framework for this criterion.

Number of shares not diluted?

Change in shares outstanding refers to the difference in the number of shares a company has issued and is important for understanding dilution risk.

In 2022, US Global Investors (GROW) had 15,010,138 shares outstanding. However, this number decreased to 14,638,833 shares in 2023, showing a reduction of 371,305 shares. This decrease in outstanding shares earns the company 1 point under the Piotroski Analysis. This decreasing trend is beneficial for existing shareholders as it reduces dilution and can lead to higher EPS.

Operating of US Global Investors (GROW)

Cross Margin is growing?

Gross Margin is a company's total sales revenue minus its cost of goods sold (COGS), divided by total sales revenue. It is important as it shows the percentage of revenue that exceeds the COGS. A higher Gross Margin indicates better efficiency in managing production costs relative to sales.

The Gross Margin of US Global Investors (GROW) in 2023 has decreased to 0.6817 from 0.7548 in 2022. This indicates a deteriorating efficiency in handling production costs relative to sales, which may concern investors. The industry's median Gross Margin also shows greater resilience compared to GROW. Over the past 20 years, GROW depicted substantial variability, even hitting 1.0 from 2009 to 2012, while the industry median remained more stable, peaking at 0.7382 in 2009. Thus, this decreasing trend in 2023 leads to a score of 0 for this criterion, signaling a less favorable position in their operational efficiency.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets in generating sales revenue. A higher ratio signifies better efficiency.

The Asset Turnover for US Global Investors (GROW) decreased from 0.4097 in 2022 to 0.2644 in 2023. This trend indicates a decrease in the company's efficiency in utilizing its assets to generate revenue. The Asset Turnover was at its highest in 2006 at 2.18, but has seen fluctuations over the past 20 years, recently dipping again. Given this decline from 2022 to 2023, the score is set to 0.