This B. Riley Preferred Share Could Be Setting Up for a Major Move

Signal: WATCHLIST | Score: 71.35/100

RILYP is flashing some serious signals right now. The preferred shares of B. Riley Financial are trading at $11.25 with a monster 28% dividend yield, sitting in the sweet spot between oversold and momentum building. With earnings volatility finally stabilizing and the stock up 550% from its $1.73 low, this could be gearing up for the next leg higher.

The Setup

The technicals here are getting interesting. RILYP is trading at $11.25, well off its 52-week high of $14.50 but showing real strength from the basement. The RSI sits at 59.4, which means we're not overbought but definitely building momentum. The stock has been consolidating in this $10-12 range, and with a beta of 1.19, any move higher could be explosive.

The price action shows we're testing resistance around current levels. If we can break through $12, the path to retest that $14.50 high looks clear with minimal resistance.

The Catalyst

The earnings story here is wild but improving. Q3 2025 delivered revenue of $277.9 million (up 23.3% quarter-over-quarter) with operating income surging 504.8% to $65.4 million. Even better, Q2 2025 showed a massive turnaround with net income jumping 1,498% to $139.5 million and EPS hitting $4.50.

Yes, there's still volatility - net income dropped 34.7% in Q3 from Q2's high - but the trend is clearly upward after years of losses. With a ridiculously cheap P/E of just 1.87 and 29% earnings growth year-over-year, the market hasn't caught up to this turnaround story yet.

Bull Case

Trading at less than 2x earnings with 29% earnings growth - this valuation is absurd if the turnaround holds
That 28% dividend yield provides massive downside cushion and income while we wait
Financial services are entering a sweet spot with rising rates benefiting their business model

Bear Case

Earnings remain volatile - that Q2 to Q3 drop shows this isn't a smooth recovery
Negative book value (-1.32 P/B ratio) suggests balance sheet issues could resurface

The Watch

This stays on the watchlist until we see a clear technical breakout above $12 or another strong earnings report that shows consistent profitability. The setup is there, the valuation is compelling, but we need that final catalyst to pull the trigger.

Key Trigger: Break above $12 with volume or Q4 earnings showing continued momentum

*This is one person's analysis, not financial advice. Always do your own research.*