Hennessy Advisors, Inc. is an 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 …
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Competitive advantage assessment
Key strengths
Sticky AUM BaseRevenue stickiness is high (stability score 0.87).
Durable Capital ReturnsReturn durability is high (score 0.94).
Key risks
High Compensation CostsCompensation costs relative to peers are high (score 0.39).
Fee Margin PressureFee margin quality is below peers (score 0.39).
The dashed ring is the peer median. Defense scores are percentile ranks
against peers, so 50 is roughly the typical company in this group.
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Hennessy Advisors, Inc. ranks #28 of 173
scored companies in Asset Management by moat score — the top 16%.
The widest moat in the group is Sound Point Meridian Capital Inc (SPMC)
at 77/100.
Moat scores for companies ranked near HNNA in Asset Management
How HNNA scores on the Asset Management Specialized defenses
Fee Revenue Quality
Score 58
· 20% of the moat score
Fee revenue quality is the ability to charge above the industry's falling average and keep charging it.
Client Retention & Revenue Stickiness
Score 72
· 18% of the moat score
Assets under management leave far more easily than they arrive, and the fee leaves with them.
Compensation Discipline
Score 48
· 18% of the moat score
Compensation is the largest expense in asset management and the one that decides whether a good year ever reaches shareholders.
Capital Efficiency
Score 70
· 20% of the moat score
Asset managers are asset-light: with little capital employed, a healthy business should earn a very high return on equity, and a merely average one is a real warning.
Earnings Quality & Cash Conversion
Score 72
· 14% of the moat score
Reported profits here can be flattered by performance fees, seed-capital gains and consolidated fund accounting, none of which recur reliably.
Balance Sheet Strength
Score 62
· 10% of the moat score
Because the business needs so little capital, an asset manager carrying meaningful debt has usually borrowed to buy another manager or to fund distributions.
Hennessy Advisors, Inc. (HNNA) scores 63 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as moderate. It ranks #28 of 173 scored companies in Asset Management, the top 16%. The score is a weighted composite of 6 competitive defenses, each measured against industry peers of 174 companies in Asset Management. Its strongest defense is Earnings Quality & Cash Conversion (72/100) and its weakest is Compensation Discipline (48/100).
How does Hennessy Advisors, Inc. compare with other Asset Management companies?
Hennessy Advisors, Inc. ranks #28 of 173 scored companies in Asset Management by moat score. The widest moat in Asset Management is Sound Point Meridian Capital Inc (SPMC) at 77/100. The companies ranked closest are State Street Corporation (STT) at 63 just above it and Ameriprise Financial, Inc. (AMP) at 63 just below it.
How is the moat score calculated?
Each company is scored with an industry-specific template — Asset Management Specialized in this case, chosen because the defenses that matter to a bank are not the ones that matter to a software company. Every defense combines several financial signals, and each signal is measured as a percentile against a peer group of 174 companies in Asset Management. The defenses are then weighted to produce the overall score out of 100.
Why is Hennessy Advisors, Inc. scored with the Asset Management Specialized template?
An asset manager owns almost nothing. It charges a fee on someone else's money, pays much of that fee out in compensation, and keeps the remainder — so its economics turn on the fee rate it can defend, whether client money stays, and how much revenue survives the bonus pool. The Asset Management template scores those questions rather than the balance sheet, which in this industry is largely beside the point.
Which competitive defenses are measured for Hennessy Advisors, Inc.?
The Asset Management Specialized template measures 6 defenses, and HNNA scores: Fee Revenue Quality (58), Client Retention & Revenue Stickiness (72), Compensation Discipline (48), Capital Efficiency (70), Earnings Quality & Cash Conversion (72), Balance Sheet Strength (62). Each is scored independently as a percentile against peers, so a company can be strong on one and weak on another — the overall score reflects how those defenses are weighted for this industry.
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