When Should You Buy Oppenheimer Holdings Inc (NYSE:OPY)?
Oppenheimer Holdings Inc (NYSE:OPY), a capital markets company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $28.45 at one point, and dropping to the lows of $25.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Oppenheimer Holdings’s current trading price of $25.5 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Oppenheimer Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Oppenheimer Holdings
Is Oppenheimer Holdings still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Oppenheimer Holdings’s ratio of 15.58x is trading slightly above its industry peers’ ratio of 15.51x, which means if you buy Oppenheimer Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that Oppenheimer Holdings should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Oppenheimer Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Oppenheimer Holdings?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 58.11% over the next couple of years, the future seems bright for Oppenheimer Holdings. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? OPY’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at OPY? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on OPY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for OPY, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Oppenheimer Holdings. You can find everything you need to know about Oppenheimer Holdings in the latest infographic research report. If you are no longer interested in Oppenheimer Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
