Critical Analysis: Burford Capital (OTCMKTS:BRFRF) and Heritage Global (NASDAQ:HGBL)
by Danessa Lincoln · The Markets DailyHeritage Global (NASDAQ:HGBL – Get Free Report) and Burford Capital (OTCMKTS:BRFRF – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.
Valuation and Earnings
This table compares Heritage Global and Burford Capital”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heritage Global | $50.98 million | 0.78 | $3.59 million | ($0.41) | -2.80 |
| Burford Capital | N/A | N/A | N/A | N/A | N/A |
Heritage Global has higher revenue and earnings than Burford Capital.
Profitability
This table compares Heritage Global and Burford Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heritage Global | -29.63% | 6.12% | 4.69% |
| Burford Capital | N/A | N/A | N/A |
Analyst Ratings
This is a summary of recent recommendations and price targets for Heritage Global and Burford Capital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heritage Global | 1 | 1 | 1 | 1 | 2.50 |
| Burford Capital | 0 | 0 | 0 | 0 | 0.00 |
Heritage Global currently has a consensus target price of $3.00, suggesting a potential upside of 160.87%. Given Heritage Global’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Heritage Global is more favorable than Burford Capital.
Institutional & Insider Ownership
33.5% of Heritage Global shares are held by institutional investors. 15.6% of Heritage Global shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Heritage Global beats Burford Capital on 9 of the 10 factors compared between the two stocks.
About Heritage Global
Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.
About Burford Capital
Burford Capital Ltd. provides investment capital, financial and risk solutions for litigation. It operates through following segments: Capital Provision, Asset Management and Services and Other Corporate. The company was founded by Christopher P. Bogart, Elizabeth O’Connell and Jonathan T. Molot on September 11, 2009 and is headquartered in St. Peter Port, Guernsey.