A Holistic Look At 1pm plc (LON:OPM)
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1pm plc (LON:OPM) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of OPM, it is a financially-healthy company with a a great history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on 1pm here.
Very undervalued with proven track record
OPM delivered a bottom-line expansion of 58% in the prior year, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, OPM also outperformed its industry, which delivered a growth of -4.7%. This is what investors like to see! OPM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that OPM manages its cash and cost levels well, which is a key determinant of the company’s health. OPM appears to have made good use of debt, producing operating cash levels of 0.44x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
OPM's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if OPM's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, OPM's share price is trading below the group's average. This further reaffirms that OPM is potentially undervalued.
Next Steps:
For 1pm, I've put together three essential aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for OPM’s future growth? Take a look at our free research report of analyst consensus for OPM’s outlook.
Dividend Income vs Capital Gains: Does OPM return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from OPM as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OPM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
