B Riley Releases New Quarterly Forecast

As an issuer of a number of baby bonds B Riley (NASDAQ:RILY) is always of interest to us and as such we wanted to pass along the latest forecast from the company for those that may have an interest.

The list of baby bonds outstanding from B Riley can be found here.

The new forecast from B Riley raises their projected net income from $14.3 to $15.3 million from a previous projection of $5.4 to $10 million.  This is one hell of a jump and the common shares have jumped by more than a $1/share which we believe is an all time high.

You can read their press release here.

We have been a bit cautious on B Riley as they are moving into businesses not related to financial services such as the recently announced purchase of voice over internet phone company magicJack.  Additionally the company is in the business of helping failed retailers (or their creditors) liquidate inventories such as BonTon which recently filed for liquidation.

Obviously with this latest news of raised expectations the baby bonds are in super good standing.


15 thoughts on “B Riley Releases New Quarterly Forecast”

  1. I was interested in B Riley new issue until I saw it was being used to purchase magicjack. Like another comment, I don’t see magicjack as something I think a company should take on debt for. With that said, in short term, might generate reasonable cash flows since it has to be a low cost to provide. I myself changed my landline to Google Voice – totally “free”. To make that work on a traditional phone, I purchased an OBI200 from Amazon for $40 one time. So not totally free with the $40 purchase. But no other fees at all. Now my phone number works on traditional house phone with traditional call answering AND/OR on any of my smartphones or PC’s. If new customers want to replace their landline and do a google search for options, not sure why anybody new would select MagicJack over Google Voice. So in my view, magicjack is a shrinking business, the question is how fast. Naturally, I could be very wrong. Maybe it’s an expanding market where both services grow. But I passed on the B Riley offering

    1. I selected Magicjack over Google Voice because I don’t want Google parsing my phone messages and mining my calls in and out for data that they can sell. Same / worse privacy issues that people are seeing with Facebook and others that are mining your data.

  2. I am watching Urstadt Biddle’s 7.125% UBP-G which is trading around par for possible add, Rubicon Assoc wrote a piece on it on SA.. seems like a good value here compared to what else is out there in reit pfd-land.

    (apparently the Brad Thomas – Rubicon partnership broke up and Rubicon is writing again on his own including blogs.. I think he provides good analysis of credit risk etc. )

    1. Bea, the 7.125% series was F and it got called last year. G series is a par 6.75% coupon.

      1. oh you are correct of course, I think that is why I was “watching” it, for dips and possible add.. thanks GB!

        1. Bea and Grid, I have been watching UBP-G for months to purchase on any dips. Just a day or two ago I had some dividends to reinvest and finally picked up 80 shares at 25.08. It goes ex-dividend on 7/19, so I will collect about .42 cents at the end of July. While I was hoping to get in at around $24.25, it does not appear to be trading down to that level anytime soon.

  3. While I may be too conservative at the present time, I won’t touch anything related to the company now. I have a pretty good idea where I think the value of “magicJack” will be headed over the next five years, and it is not good.

    Earlier this week I spent some time with a representative from a well known brokerage firm that will be handling some of my father’s investments. Right now, it is easily possible to get 3% on a three-year CD and it is something we have not seen in 10 years. Clearly too low for me, but not bad for someone that is 78 years old.

    BR is now on their fourth issuance of securities that yield over 7%. Buyer beware.

    1. Lou, like you, I got my safe bucket and my risk bucket. My risk bucket is smaller. Issues like Rilyl, NSS, and CTV for example. My safe bucket is opposite end with issues like WELPM, AILLL, HE-U, and IPWLK amongst others.

      1. Gridbird, do you like CTV better than CTW? I own some CTW. I’m guessing you see them both as pretty risky.

        1. Hi, MP, to be honest, if I was having a bigger position, my preference in holding would be CTW that you own, as it has a “call risk” that will generally help anchor tighter to par. CTV had a drop off into low $22s a little while back so I bought it. My only other “telco” ish issue is KTBA which I own more of than CTV.
          Risk is such a relative term, and I am sure many would define risky as something worse than Qwest debt. One SA writer defines MINDP as safe which I think is a total mischaracterization of the word “safe”.
          Risk can be defined as credit risk, duration risk, market risk, etc. Pick your favorite poison, lol.

    1. Im not as worried about RILY as maybe I should. But in fairness, they are not stockbrokers buying up businesses and owning liquidation gigs as a side bar. These are subsidiary companies that designed to conduct these transactions.
      Still my courage isnt too strong as my depth of ownership goes only as deep as RILYL.

  4. Echo Charles’ note and this is indeed good news. I’m holding various Riley baby bonds in multiple accounts which I’ve been watching like a hawk lately since they have been trading rather weakly for the past few months.

    Thanks for the update, Tim!

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