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Dear Hennessy Advisors Shareholder:
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December 2021
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When I sit down to write this letter each December, I try to draw from my more than four decades in this industry and reflect
on the year that has passed. But this year, it is difficult to find clarity through all of the challenges we continue to face. We are not just faced with a global health crises, we are challenged daily with news about politics, taxes, inflation, the
pandemic, cryptocurrencies, the great resignation, supply chain issues, and more.
These headlines impact each of us and our daily lives as we
strive to regain some normalcy and re-open our world. Even amongst all the headlines and challenges, I continue to be awed by the evident strength of spirit in our community. With each story of heartbreak
there continue to be silver linings and reasons for pride in humankind.
There are silver linings in our economy and in the financial markets, too. Our
GDP is forecasted to be 5.5% in 2021 and 3.9% in 2022 according to economists surveyed by Bloomberg L.P., and the DJIA (Dow Jones Industrial Average) is up approximately 17.20% so far this year. We understand that even the greatest bull markets
experience corrections along the way and that there will be volatility. Whether or not a correction occurs sooner or later, we believe the market as a whole has more room to run. We see many factors that could drive the market higher from here:
strong economic growth and increasing corporate earnings, a potentially lower-for-longer interest rate environment, accommodative fiscal and monetary policies, a healthy
and robust financial system, low unemployment and solid wage growth, and strong corporate balance sheets with plenty of cash.
Here at Hennessy, 2021
brought forth a number of our strengths despite the difficulties and challenges of the COVID-19 pandemic: the perseverance of our business model, the consistency of the returns in our mutual fund line-up, and the dedication of our team.
Financial Results
On October 20, 2021, we successfully completed a public offering of $40,250,000 of notes due in 2026. The notes bear interest at 4.875% per annum,
payable on the last day of each calendar quarter, beginning December 31, 2021, and mature on December 31, 2026. Our structure affords us flexibility in allocating capital strategically, and we intend to use this capital injection to
continue our long-term business strategy of pursuing organic growth and seeking compelling acquisitions.
We are extremely pleased to report $1.07 of
fully diluted earnings per share for fiscal year 2021, a 1% increase over the prior year. We continued to build cash on our balance sheet and reported over $15 million in cash on hand before the completion of our public bond offering in
October.
This year also marks the 16th consecutive year that we have paid a dividend. Based on the closing price of $10.67 per share on November 30,
2021, the $0.1375 quarterly dividend equates to a 5.2% yield on an annualized basis.
Investment Performance of the Hennessy Funds
We strive to provide positive total returns for investors in the Hennessy Funds over various market cycles. Each of the 16 Hennessy Funds achieved double or
even triple digit positive returns for the one-year period ended September 30, 2021. Longer-term performance remains strong, with 14 of the 16 Hennessy Funds
posting positive returns for the three- and five-year periods, and all of the Funds with at least a 10-year operating history posting positive returns for the 10-year period ended September 30, 2021.