U.S. Global Investors (GROW), mcap=$42.5m

GROW pitch:
– Graham’s style net-net.
– A niche asset manager, trading well below its BV comprised of cash + investments.
– Market ascribes no value to GROW’s $2.9b asset management business.
– Company is most known for its airline ETF JETS, which accounts for 80% of AUM.
– JETS has been a wild success and saw AUM increase from $50m in 2020 to $4.5bn in Jun’21.
– Currently, total GROW AUM sits at $2.3bn and started increasing again recently.
– Due to a flexible cost base, GROW only needs AUM in the $1.3b-$1.5bn range to break even.
– At current AUM levels the asset management business is producing $4-6m in annual FCF.
– GROW is controlled by Frank Holmes with a questionable reputation.

GROW valuation:
– Asset management business projected to be worth at least $2/share.
– Adding it to the estimated BV of $3.2/share results in a price target of over $5/share.

Exp. gain: 85%+

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