Send me real-time posts from this site at my email

Why Shares of B. Riley Financial Are Surging Today

What happened

Shares of the financial services company B. Riley Financial (NASDAQ: RILY) traded more than 14% higher in the late morning on Tuesday after it announced that it will join the S&P SmallCap 600 on Thursday.

So what

B. Riley offers a variety of financial services, including capital markets and investment banking, advisory services, real estate, wealth management, venture capital, and more.

The S&P SmallCap 600 is an index of U.S. small-cap stocks with market capitalizations ranging from $700 million to $3.2 billion at the time the company is added to the index. B. Riley currently has a market cap of nearly $1.9 billion.

Image source: Getty Images.

Stocks typically see a nice boost when they join a new index because funds that essentially mimic that index must now buy the stock. Also, being added to an index results in greater visibility for the stock.

Now what

In late March, B. Riley released guidance for its first-quarter earnings. The company said it expects operating adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to range from $105 million to $115 million, up from adjusted EBITDA of $70.9 million in the first quarter of 2020.

The uptick in earnings makes sense, as many of the areas that B. Riley operates in, such as investment banking and capital markets, have seen a ton of activity during the pandemic.

The company looks well positioned, although it will be important to watch how activity in its different business segments shapes up throughout the year because areas like investment banking and capital markets could normalize.

10 stocks we like better than B. RILEY FINANCIAL
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and B. RILEY FINANCIAL wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of February 24, 2021

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue