Critical Review: Fifth Street Asset Management (FSAM) & Its Rivals
Fifth Street Asset Management (OTCMKTS: FSAM) is one of 57 publicly-traded companies in the “Investment Management” industry, but how does it contrast to its peers? We will compare Fifth Street Asset Management to similar businesses based on the strength of its dividends, risk, valuation, institutional ownership, profitability, analyst recommendations and earnings.
This table compares Fifth Street Asset Management and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fifth Street Asset Management||-20.92%||-626.41%||-2.71%|
|Fifth Street Asset Management Competitors||26.03%||108.67%||26.28%|
8.6% of Fifth Street Asset Management shares are held by institutional investors. Comparatively, 46.9% of shares of all “Investment Management” companies are held by institutional investors. 85.4% of Fifth Street Asset Management shares are held by insiders. Comparatively, 26.7% of shares of all “Investment Management” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Fifth Street Asset Management has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Fifth Street Asset Management’s peers have a beta of 1.45, suggesting that their average stock price is 45% more volatile than the S&P 500.
This is a breakdown of current ratings for Fifth Street Asset Management and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fifth Street Asset Management||0||0||0||0||N/A|
|Fifth Street Asset Management Competitors||667||2132||2184||37||2.32|
As a group, “Investment Management” companies have a potential downside of 2.21%. Given Fifth Street Asset Management’s peers higher possible upside, analysts plainly believe Fifth Street Asset Management has less favorable growth aspects than its peers.
Earnings & Valuation
This table compares Fifth Street Asset Management and its peers top-line revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Fifth Street Asset Management||$82.55 million||-$1.53 million||-29.00|
|Fifth Street Asset Management Competitors||$997.79 million||$160.95 million||875.40|
Fifth Street Asset Management’s peers have higher revenue and earnings than Fifth Street Asset Management. Fifth Street Asset Management is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Fifth Street Asset Management pays an annual dividend of $0.25 per share and has a dividend yield of 6.2%. Fifth Street Asset Management pays out -178.6% of its earnings in the form of a dividend. As a group, “Investment Management” companies pay a dividend yield of 3.4% and pay out 67.3% of their earnings in the form of a dividend. Fifth Street Asset Management is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
Fifth Street Asset Management peers beat Fifth Street Asset Management on 9 of the 12 factors compared.
About Fifth Street Asset Management
Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.
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