U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a
registered investment advisory firm with longstanding experience in
global markets and specialized sectors from gold mining to emerging
markets, today reported operating income of $908,000 for the
quarter ended December 31, 2022, on total revenues of $3.7 million.
The Company recorded net income of $869,000, or $0.06 per share.
Average assets under management (AUM) for the three-month period
ended December 31, 2022, were $2.5 billion. Total AUM at December
31, 2022, was $2.4 billion, an increase of approximately $112
million from the previous quarter.
The Company was delayed in submitting its financial results for
the quarter ending December 31, 2022, but with the December 2022
quarter results now filed, the Company is focusing on preparing and
submitting the financial statements for the quarter that concluded
on March 31, 2023.
“2022 was a particularly challenging year for capital markets,
with a historic drop in both stocks and bonds, and against this
backdrop, I’m pleased that we managed to generate positive income
in the second quarter of fiscal 2023,” says Frank Holmes, the
Company’s CEO and Chief Investment Officer. “Investors appeared to
minimize risk on fears that persistently high inflation and
interest rate hikes might trigger a recession. U.S.-based mutual
funds and ETFs saw collective net outflows of $370 billion in 2022,
the first annual loss since Morningstar began tracking this data in
1993. In December alone, outflows were $86 billion.”1
China Finally Opened Its Economy, Lifting Asian Airlines
and Luxury Sales
“The good news is that Inflation is abating, and the U.S.
economy continues to expand at a healthy clip,” Mr. Holmes
continues. “China finally relaxed its zero-Covid travel policy
after three long years, which I believe is bullish for our U.S.
Global Jets ETF (JETS) . In the fourth quarter of 2022, shares of
Asian airlines, as measured by the Bloomberg Asia Pacific Airlines
Index, rose 17.51%, compared to the NYSE Arca Airline Index, which
fell 8.60%, mostly on winter weather-related delays and groundings
in the U.S.
“I believe China’s reopening will also be constructive for our
Global Luxury Goods Fund (USLUX), the only luxury-focused mutual
fund available to U.S. investors. In the years preceding the
pandemic, Chinese travelers were historically the biggest spenders
on luxury goods on a per-capita basis.2 I was especially pleased to
see that LVMH, the world’s largest luxury conglomerate, posted an
incredibly strong 2022, despite the economic headwinds. The
Paris-based company recorded a profit of 21.1 billion euros ($22.8
billion), a 23% increase from 2021. Both its fashion and leather
goods business and wines and spirits business reached record levels
of revenue and earnings in 2022.”3
Gold Sentiment Heated Up
Gold was one of the best-performing assets in 2022, down a
negligible 0.28%, compared to a loss of 18.13% for the S&P 500
and a decrease of 13.01% for government and corporate bonds.
Total global demand for gold expanded 18% year-over-year in
2022, reaching its highest level since 2011, according to the World
Gold Council (WGC). Central banks were responsible for much of the
growth, adding a massive 1,136 metric tons, the largest annual
amount on record. China began accumulating again in 2022 for the
first time in three years, continuing its goal of diversifying away
from the U.S. dollar. Meanwhile, retail demand for bars and coins
in the U.S. and Europe hit a new annual record last year in
response to stubbornly high inflation and the war in Ukraine.
Western investors gobbled up 427 tons (approximately 15 million
ounces), the most since 2011.4
“We’re very pleased with the performance of our U.S. Global GO
GOLD and Precious Metal Miners ETF (GOAU) relative to its peers in
2022 and since we launched it in June 2017,” Mr. Holmes says. “GOAU
is doing precisely what we designed it to do, namely, provide
investors access to high-quality, currently active gold and
precious metal producers with a strong, overweight emphasis on
royalty and streaming companies, which we consider to be the ‘smart
money’ of the meals and mining industry. Like our other two ETFs,
JETS and the U.S. Global Sea to Sky Cargo ETF (SEA), GOAU is a
smart-beta ETF that rebalances and reconstitutes on a quarterly
basis.”
The Company is also excited to share that its Gold and Precious
Metals Fund (USERX) received a five-star rating from Morningstar
for the 10-year period as of December 30, 2022, among 55 of its
peers in the Equity Precious Metals category, based on
risk-adjusted returns. It also received a four-star rating overall
as of December 30, 2022, among 68 Equity Precious Metals funds, and
a four-star rating for the five-year period, among 61 Equity
Precious Metals funds. See the Morningstar disclosure below for
further details.
Healthy Liquidity and Capital Resources
As of December 31, 2022, the Company had net working capital of
approximately $36.2 million, an increase of $2.3 million, or 6.9%,
since June 30, 2022. Total assets, including various corporate
investments, stood at $55.0 million. With approximately $23.4
million in cash and cash equivalents, the Company has adequate
liquidity to meet its current obligations, in addition to
investments in our funds and convertible notes.
Substantial Increase in Share Repurchases While
Maintaining Monthly Dividend Policy for More Than 13
Years
For the three months ended December 31, 2022, the Company
repurchased 87,407 class A shares, a substantial 736% increase from
the 10,457 shares that were repurchased during the same period a
year earlier, at a net cost of almost $250,000.
The Company believes that its stock is undervalued, making the
buybacks an attractive opportunity on flat or down days in
anticipation of a potential rebound. The repurchase program has
been in place since December 2012, and the Board of Directors (the
“Board”) has annually renewed the repurchase program each calendar
year.
Selected Financial Data (unaudited):
(dollars in thousands, except per share
data) |
|
|
|
|
Three months ended |
|
12/31/2022 |
|
12/31/2021 |
|
Operating Revenues |
$3,728 |
|
$6,574 |
|
Operating Expenses |
|
2,820 |
|
|
3,635 |
|
Operating Income |
|
908 |
|
|
2,939 |
|
|
|
|
Total Other Income |
|
178 |
|
|
1,590 |
|
Income Before Income Taxes |
|
1,086 |
|
|
4,529 |
|
|
|
|
Income Tax Expense |
|
217 |
|
|
939 |
|
Net Income |
$869 |
|
$3,590 |
|
|
|
|
Net income (loss) per share (basic and diluted) |
$0.06 |
|
$0.24 |
|
|
|
|
Avg. common shares outstanding (basic) |
|
14,889,946 |
|
|
15,021,792 |
|
Avg. common shares outstanding (diluted) |
|
14,890,031 |
|
|
15,022,814 |
|
|
|
|
Avg. assets under management (billions) |
$2.5 |
|
$4.1 |
|
|
|
|
|
|
|
|
About U.S. Global Investors, Inc.The story of
U.S. Global Investors goes back more than 50 years when it began as
an investment club. Today, U.S. Global Investors, Inc.
(www.usfunds.com) is a registered investment adviser that focuses
on niche markets around the world. Headquartered in San Antonio,
Texas, the Company provides money management and other services to
U.S. Global Investors Funds and U.S. Global ETFs.
Forward-Looking Statements and DisclosureThis
news release and other statements by U.S. Global Investors may
include certain “forward-looking statements,” including statements
relating to revenues, expenses and expectations regarding market
conditions. You can identify these forward-looking statements by
the use of words such as “outlook,” “believes,” “expects,”
“potential,” “opportunity,” “seeks,” “anticipates” or other
comparable words. Such statements involve certain risks and
uncertainties and should be read with corporate filings and other
important information on the Company’s website, www.usfunds.com, or
the Securities and Exchange Commission’s website at
www.sec.gov.
These filings, such as the Company’s annual report and Form
10-Q, should be read in conjunction with the other cautionary
statements that are included in this release. Future events could
differ materially from those anticipated in such statements and
there can be no assurance that such statements will prove accurate
and actual results may vary. The Company undertakes no obligation
to publicly update or review any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
Please consider carefully a fund’s investment
objectives, risks, charges and expenses. For this and other
important information, obtain a fund prospectus by visiting
www.usfunds.com. Read it carefully before investing. U.S. Global
mutual funds are distributed by Foreside Fund Services, LLC,
Distributor. U.S. Global Investors is the investment adviser.
Morningstar:****
Overall/68*** 3-Year/68****
5-Year/61***** 10-Year/55Morningstar ratings based on
risk-adjusted return and number of fundsCategory: Equity Precious
MetalsThrough: December 30, 2022
The Morningstar Rating™ for funds, or "star rating", is
calculated for managed products (including mutual funds, variable
annuity and variable life subaccounts, exchange-traded funds,
closed-end funds, and separate accounts) with at least a three-year
history. Exchange-traded funds and open-ended mutual funds are
considered a single population for comparative purposes. It is
calculated based on a Morningstar Risk-Adjusted Return measure that
accounts for variation in a managed product's monthly excess
performance, placing more emphasis on downward variations and
rewarding consistent performance. The top 10% of products in each
product category receive 5 stars, the next 22.5% receive 4 stars,
the next 35% receive 3 stars, the next 22.5% receive 2 stars, and
the bottom 10% receive 1 star. The Overall Morningstar Rating for a
managed product is derived from a weighted average of the
performance figures associated with its three-, five-, and 10-year
(if applicable) Morningstar Rating metrics. The weights are: 100%
three-year rating for 36-59 months of total returns, 60% five-year
rating/40% three-year rating for 60-119 months of total returns,
and 50% 10-year rating/30% five-year rating/20% three-year rating
for 120 or more months of total returns. While the 10-year overall
star rating formula seems to give the most weight to the 10-year
period, the most recent three-year period actually has the greatest
impact because it is included in all three rating periods. U.S.
Global Investors does not pay Morningstar to be rated.
Performance data quoted above is historical. Past performance is
no guarantee of future results. Results reflect the reinvestment of
dividends and other earnings. For a portion of periods, the fund
had expense limitations, without which returns would have been
lower. Current performance may be higher or lower than the
performance data quoted. The principal value and investment return
of an investment will fluctuate so that your shares, when redeemed,
may be worth more or less than their original cost. Performance
does not include the effect of any direct fees described in the
fund’s prospectus which, if applicable, would lower your total
returns. Performance quoted for periods of one year or less is
cumulative and not annualized. Obtain performance data current to
the most recent month-end at www.usfunds.com or 1-800-US-FUNDS.
USERX and USLUX are distributed by Foreside Fund Services, LLC.
U.S. Global Investors is the investment adviser. GOAU, JETS and SEA
are distributed by Quasar Distributors, LLC. U.S. Global Investors
is the investment adviser to GOAU, JETS and SEA. Foreside Fund
Services, LLC and Quasar Distributors, LLC are affiliated.
Shares of any ETF are bought and sold at market price (not NAV),
may trade at a discount or premium to NAV and are not individually
redeemed from the funds. Brokerage commissions will reduce returns.
Stock markets can be volatile and share prices can fluctuate in
response to sector-related and other risks as described in the fund
prospectus. Foreign and emerging market investing involves special
risks such as currency fluctuation and less public disclosure, as
well as economic and political risk. Companies in the consumer
discretionary sector are subject to risks associated with
fluctuations in the performance of domestic and international
economies, interest rate changes, increased competition and
consumer confidence. Gold, precious metals, and precious minerals
funds may be susceptible to adverse economic, political or
regulatory developments due to concentrating in a single theme. The
prices of gold, precious metals, and precious minerals are subject
to substantial price fluctuations over short periods of time and
may be affected by unpredicted international monetary and political
policies. We suggest investing no more than 5% to 10% of your
portfolio in these sectors.
The Bloomberg Asia Pacific Airlines Index is a
capitalization-weighted index of the leading airlines stocks in the
Asian Pacific Region. The NYSE Arca Airline Index is an
equal-dollar weighted index of the most highly capitalized
companies in the airline industry. A smart beta ETF is a type
of exchange-traded fund that aims to outperform traditional
market-cap-weighted index funds by using a rules-based approach to
construct a portfolio. Unlike traditional index funds, smart beta
ETFs do not rely solely on market capitalization to weight
securities in the fund.
All opinions expressed and data provided are subject to change
without notice. Some of these opinions may not be appropriate to
every investor.
_____________________________
1 Sabban, A., & Jackson, R. U.S. Fund Flows, December 2022.
Morningstar. Retrieved January 30, 2023.
2 Quinio, A., Yang, Y., & Barnes, O. (2022, August 26). Loss
of Chinese tourists forces Europe’s luxury retailers to rethink.
Financial Times.
3 New record year for LVMH in 2022. (2023, January 26).
LVMH.
4 Gold Demand Trends Full Year 2022. (2023, January 31). World
Gold Council.
Contact:Holly SchoenfeldtDirector of
Marketing 210.308.1268hschoenfeldt@usfunds.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/68b476a5-8496-4ea1-9267-bcf301e9a7a6
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