MeritValue

Heritage Global Inc.

HGBLdata completeness 88%16 fiscal years on file
The thesis, from the filings

Heritage Global Inc. earns about 18% on invested capital, comfortably above its ~9% cost of capital, and has bought back 4% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $1.52 and $5.27 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$25.8M1$46.9M2$60.5M3$45.4M4$51M4
Net income$3.05M5$15.5M6$12.5M7$5.18M8$3.59M8
Operating cash flow−$2.63M9$6.48M10$13M11$7.75M12$6.14M12
Capital expenditure$1.43M13$215,00014$257,00015$137,00016$8.47M16
Free cash flow (derived)−$4.06M9$6.27M10$12.8M11$7.61M12−$2.33M12
Total debt——$7.23M17——
Cash & equivalents$13.6M18$12.7M19$12.3M20$21.7M21$20.5M21
Diluted shares36.9M37.1M37.6M37.1M35.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$18.9
your share of equity
Profit it earned you last year
$1.01
Free cash flow it threw off
−$0.66
Debt you’d be carrying
—

10 shares is a claim on $18.9 of net worth that earned you $1.01 and generated −$0.66 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 16%FY22 31%FY23 22%FY24 12%FY25 8%

It earned about 18% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−4% shares · 5y

Share count is down 4% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $1.52 and $5.27 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$5.27
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth6.7%
  • fcfBase$7.61M
DCF · Growth Exit 5Y
$4.67
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth6.7%
  • fcfBase$7.61M
Earnings Power Value
$1.52
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$5.18M
  • growthAssumed0.0%
Graham Number
$2.06
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years6.7%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $4.67
The three cases
Bear0.0%$3.65
Base6.7%$4.67
Bull11.7%$5.61

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 6.7%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K/A · period ending 2021-12-31 · accession 0000950170-24-012268 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-24-031436 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000950170-25-038691 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2024-12-31 · accession 0001193125-26-104062 (RevenueFromContractWithCustomerExcludingAssessedTax)
  5. 10-K/A · period ending 2021-12-31 · accession 0000950170-24-012268 (NetIncomeLoss)
  6. 10-K · period ending 2022-12-31 · accession 0000950170-24-031436 (NetIncomeLoss)
  7. 10-K · period ending 2023-12-31 · accession 0000950170-25-038691 (NetIncomeLoss)
  8. 10-K · period ending 2024-12-31 · accession 0001193125-26-104062 (NetIncomeLoss)
  9. 10-K/A · period ending 2021-12-31 · accession 0000950170-24-012268 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-12-31 · accession 0000950170-24-031436 (NetCashProvidedByUsedInOperatingActivities)
  11. 10-K · period ending 2023-12-31 · accession 0000950170-25-038691 (NetCashProvidedByUsedInOperatingActivities)
  12. 10-K · period ending 2024-12-31 · accession 0001193125-26-104062 (NetCashProvidedByUsedInOperatingActivities)
  13. 10-K/A · period ending 2021-12-31 · accession 0000950170-24-012268 (PaymentsToAcquirePropertyPlantAndEquipment)
  14. 10-K · period ending 2022-12-31 · accession 0000950170-24-031436 (PaymentsToAcquirePropertyPlantAndEquipment)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-25-038691 (PaymentsToAcquirePropertyPlantAndEquipment)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-104062 (PaymentsToAcquirePropertyPlantAndEquipment)
  17. 10-K · period ending 2023-12-31 · accession 0000950170-24-031436 (LongTermDebt)
  18. 10-K/A · period ending 2021-12-31 · accession 0000950170-24-012268 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2022-12-31 · accession 0000950170-24-031436 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2023-12-31 · accession 0000950170-25-038691 (CashAndCashEquivalentsAtCarryingValue)
  21. 10-K · period ending 2024-12-31 · accession 0001193125-26-104062 (CashAndCashEquivalentsAtCarryingValue)