Critical Analysis: Wright Investors Service (OTCMKTS:WISH) versus Hennessy Advisors (OTCMKTS:HNNA)

Wright Investors Service (OTCMKTS:WISH) and Hennessy Advisors (NASDAQ:HNNA) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility & Risk

Wright Investors Service has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Hennessy Advisors has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Wright Investors Service and Hennessy Advisors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wright Investors Service N/A -27.38% -26.72%
Hennessy Advisors 25.82% 14.69% 10.09%

Analyst Recommendations

This is a summary of recent ratings and price targets for Wright Investors Service and Hennessy Advisors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wright Investors Service 0 0 0 0 N/A
Hennessy Advisors 0 0 0 0 N/A

Insider & Institutional Ownership

4.1% of Wright Investors Service shares are owned by institutional investors. Comparatively, 11.2% of Hennessy Advisors shares are owned by institutional investors. 32.6% of Wright Investors Service shares are owned by insiders. Comparatively, 42.8% of Hennessy Advisors shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Wright Investors Service and Hennessy Advisors’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wright Investors Service $5.41 million 1.48 -$1.72 million N/A N/A
Hennessy Advisors $42.72 million 1.78 $11.03 million N/A N/A

Hennessy Advisors has higher revenue and earnings than Wright Investors Service.

Summary

Hennessy Advisors beats Wright Investors Service on 8 of the 9 factors compared between the two stocks.

Wright Investors Service Company Profile

Wright Investors' Service Holdings, Inc., through its wholly-owned subsidiary, The Winthrop Corporation, provides investment management, financial advisory, and investment research services to large and small investors in the United States. The company offers investment management products and services, including equity, fixed income, and balanced portfolios for various plan types, such as defined benefit, annuity, self-directed and 401(k), health and welfare, and education and training plans to sponsors, trade unions, endowments, corporations, state and local governments, municipalities, and foundations. It also manages various accounts, such as discretionary investment accounts, individual retirement accounts, and 401k plans, as well as accounts for non-corporate fiduciaries comprising trustees, executors, guardians, personal representatives, attorneys, and other professionals to support high net worth investors and other individual investors; and provides a family of mutual funds. In addition, the company offers research products for institutional investors that include Wright Reports, a research report providing approximately 10 years of fundamental information for approximately 35,000 companies in 63 countries; and One-Page Report, a company specific single page report with approximately 10 years of history that contains valuation ratios, earnings, and dividends. Its research products also comprise Wright Industry Averages Reports, which are consolidated reports prepared on a Global and Regional basis for various industries; corporateInformation.com, an online commercial Website that offers subscription access to the universe of Wright Reports; Wright Fiduciary Lists; and Wright FIRST Investment Research Service, a financial management service to portfolio, trust, and investment professionals. The company is headquartered in Greenwich, Connecticut.

Hennessy Advisors Company Profile

Hennessy Advisors, Inc. is publicly owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

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