Cohen & Co Inc. (COHN) Stock Analysis and Metrics

Sector: Financial Services Industry: Capital Markets CIK: 0001270436

Market Cap 25.54 Mn

P/B 0.53

P/E 6.35

P/S 0.13

ROIC (Qtr) 2.81

Div Yield % 8.10

Rev 1y % (Qtr) 165.70

Total Debt (Qtr) 507.14 Mn

Debt/Equity (Qtr) 10.60

About

Cohen & Co Inc., known by its ticker symbol COHN, is a financial services company operating in the capital markets and asset management sectors. The company's main business activities are divided into three segments: Capital Markets, Asset Management, and Principal Investing. Cohen & Co Inc. has a strong presence in the United States and Europe, with subsidiaries such as JVB in the US and CCFESA in Europe. Cohen & Co Inc.'s Capital Markets segment is responsible for fixed income sales, trading, and gestation repo financing, as well as new issue...

Cohen & Co Inc., known by its ticker symbol COHN, is a financial services company operating in the capital markets and asset management sectors. The company's main business activities are divided into three segments: Capital Markets, Asset Management, and Principal Investing. Cohen & Co Inc. has a strong presence in the United States and Europe, with subsidiaries such as JVB in the US and CCFESA in Europe.

Cohen & Co Inc.'s Capital Markets segment is responsible for fixed income sales, trading, and gestation repo financing, as well as new issue placements in corporate and securitized products and advisory services. This segment is the company's primary source of revenue, generating income through trading activities, execution and brokerage services, gestation repo, riskless trading activities, and gains and losses. JVB, a subsidiary of Cohen & Co Inc., is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Industry Protection Corporation (SIPC), while CCFESA is regulated by the ACPR, showcasing the company's commitment to regulatory compliance.

The Asset Management segment manages assets through investment vehicles such as collateralized debt obligations (CDOs), managed accounts, joint ventures, and investment funds. As of December 31, 2023, the company had approximately $2.4 billion in assets under management (AUM), primarily consisting of fixed income assets in various asset classes. This segment earns management fees for its ongoing asset management services, which may include fees based on the value of the AUM or the investment performance of the vehicle, or both.

The Principal Investing segment consists of investments related to the company's SPAC franchise and investments made for the purpose of earning an investment return. The segment also includes other investments received as consideration for advisory services provided by the company's Capital Markets segment.

Cohen & Co Inc. operates in a competitive industry with other boutique investment banks and financial services companies in the fixed income and asset management sectors. However, the company's unique blend of expertise and experience in fixed income sales, trading, and gestation repo financing, as well as its ability to provide innovative strategic and financial advice, sets it apart from its competitors.

In terms of its customers, Cohen & Co Inc. serves a diverse range of clients, including corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers. The company's customers are primarily located in the United States, Europe, and other regions where it operates.

Cohen & Co Inc.'s brand names and trade names include JVB, CCFESA, and its SPAC franchise. These names reflect the company's commitment to providing innovative financial solutions and services to its clients.

Price action

Investment thesis

Bull case

Robust free cash flow of 32.56M exceeds capital expenditure of 1.28M by 25.37x, indicating strong organic growth funding capability.
Cash reserves of 54.69M provide ample 57.15x coverage of acquisition spending 957000, enabling strategic growth opportunities.
Cash position of 54.69M provides exceptional 17.62x coverage of minority interest expenses 3.10M, indicating strong liquidity.
Strong free cash flow of 32.56M provides 34.02x coverage of acquisition spending 957000, indicating disciplined M&A strategy.
Strong tangible asset base of 773.75M provides 808.51x coverage of acquisition spending 957000, enabling strategic growth.

Bear case

Free cash flow of 32.56M represents just -12.65x of debt issuance (2.57M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
Operating cash flow of 33.84M is outpaced by equity issuance of (344000) (-98.37 ratio), indicating concerning reliance on equity markets for funding operations.
R&D investment of 0 represents just 0x of SG&A expenses of 140.48M, indicating potential underinvestment in innovation relative to administrative overhead.
Cash position of 54.69M provides minimal 0.39x coverage of SG&A expenses of 140.48M, indicating potential operational inflexibility in market downturns.
Interest expense of 5.89M consumes 0.55x of operating earnings 10.79M, suggesting concerning debt service burden relative to operational performance.

Peer comparison

Companies in the Capital Markets

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	GS	Goldman Sachs Group Inc	284.23 Bn	17.94	4.84	911.32 Bn
2	MS	Morgan Stanley	279.63 Bn	17.97	4.05	353.12 Bn
3	SCHW	Schwab Charles Corp	179.33 Bn	23.09	7.83	27.59 Bn
4	HOOD	Robinhood Markets, Inc.	106.92 Bn	48.73	25.43	0.00 Bn
5	CRCL	Circle Internet Group, Inc.	40.97 Bn	261.00	24.22	0.15 Bn
6	IBKR	Interactive Brokers Group, Inc.	28.23 Bn	30.79	4.75	28.43 Bn
7	LPLA	LPL Financial Holdings Inc.	27.60 Bn	33.13	1.77	7.52 Bn
8	FUTU	Futu Holdings Ltd	22.89 Bn	18.13	8.54	1.75 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	1.12	1.07
EV to Cash from Ops. EV/CFO	25.55	15.33
EV to Debt EV to Debt	1.71	21.89
EV to EBIT EV/EBIT	80.15	-0.80
EV to EBITDA EV/EBITDA	35.22	11.20
EV to Free Cash Flow [EV/FCF] EV/FCF	26.56	43.08
EV to Market Cap EV to Market Cap	33.85	-0.05
EV to Revenue EV/Rev	4.52	12.82
Price to Book Value [P/B] P/B	0.53	3.09
Price to Earnings [P/E] P/E	6.35	6.20

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	0.00	4.22
Dividend Payout Ratio % Div Payout % (Qtr)	41.20	10.37
Dividend per Basic Share Div per Share (Qtr)	1.00	0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	5.35	-8.68
Interest Coverage Int. cover (Qtr)	1.83	37.53

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-48.84	-12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	282.70	1,588.78
Dividend Growth (1y) % Div 1y % (Qtr)	0.00	4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	26.09	270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	159.72	333.57
EBIT Growth (1y) % EBIT 1y % (Qtr)	21.76	3,103.22
EBT Growth (1y) % EBT 1y % (Qtr)	69.22	3,039.53
EPS Growth (1y) % EPS 1y % (Qtr)	-41.73	24.25
FCF Growth (1y) % FCF 1y % (Qtr)	4,570.88	-80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	100.34	51.33

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.25	0.42
Cash Payout Ratio Cash Payout (Qtr)	0.00	-0.08
Cash Ratio Cash Ratio	0.00	2.01
Current Ratio Current Ratio	0.00	3.47
Debt to Equity Ratio Debt/Equity (Qtr)	10.60	1.46
Interest Cover Ratio Int Coverage (Qtr)	1.83	37.53
Times Interest Earned Times Interest Earned (Qtr)	1.83	37.53

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	6.00	76.68
EBIT Margin % EBIT Margin % (Qtr)	5.64	46.81
EBT Margin % EBT Margin % (Qtr)	2.56	58.57
Gross Margin % Gross Margin % (Qtr)	100.00	53.60
Net Profit Margin % Net Margin % (Qtr)	2.10	29.41

Cohen & Co Inc. (NYSE: COHN)

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