| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 82.35 | 235 |
| Intrinsic value (DCF) | 14.04 | -43 |
| Graham-Dodd Method | 4.86 | -80 |
| Graham Formula | n/a |
Great Elm Group, Inc. (NASDAQ: GEGGL) is an alternative asset management firm specializing in long-duration and permanent capital vehicles across credit, real estate, specialty finance, and other alternative investment strategies. Headquartered in Waltham, MA, the company operates through subsidiaries including Great Elm Capital Corp., a publicly-traded business development company, and Monomoy Properties REIT, LLC, an industrial-focused real estate investment trust. Founded in 1994, Great Elm Group leverages its diversified portfolio to generate stable returns in the financial services sector. With a market capitalization of approximately $58.4 million, the company focuses on scalable investment solutions, offering investors exposure to niche markets. Its 7.25% Notes due 2027 provide fixed-income investors with a high-yield opportunity in the alternative asset management space. Great Elm Group's strategic positioning in credit and real estate allows it to capitalize on market inefficiencies and deliver value to stakeholders.
Great Elm Group presents a mixed investment profile. The company's 7.25% Notes due 2027 offer an attractive yield, appealing to fixed-income investors seeking higher returns in the current low-interest-rate environment. However, the firm's negative net income (-$1.39M) and operating cash flow (-$15.56M) raise concerns about sustainability, despite its $50.52M cash reserves. The company's beta of 0.67 suggests lower volatility compared to the broader market, which may appeal to risk-averse investors. Dividend payments ($1.81 per share) indicate income potential, but reliance on debt ($61.18M total debt) could pressure liquidity. Investors should weigh the high-yield debt offering against operational challenges and sector-specific risks in alternative asset management.
Great Elm Group operates in a competitive alternative asset management landscape, where scale and diversification are critical. The company's competitive advantage lies in its focus on long-duration and permanent capital vehicles, which provide stability compared to shorter-term investment strategies. Its subsidiaries, Great Elm Capital Corp. and Monomoy Properties REIT, allow vertical integration in credit and real estate, enhancing fee-generating capabilities. However, the firm's relatively small market cap ($58.4M) limits its ability to compete with larger asset managers in terms of fundraising and deal flow. Great Elm's niche focus on industrial real estate and specialty finance differentiates it but also exposes it to sector-specific downturns. The company's ability to manage debt (debt-to-equity considerations) and sustain dividend payouts will be key to maintaining investor confidence. Compared to peers, Great Elm's hybrid model (combining BDC and REIT operations) offers diversification but may lack the depth of specialized competitors in either segment.