Hi All,
I can't really understand why Oxford Metrics (LON:OMG) share price is doing so badly compared to peers. Granted, the results weren't amazing, but I always judged them as a good small cap software company to back for longer term growth. Anyone care to share their insights as to why this is so out of favour?
Thanks!
1
Broker downgrades
2
Award of share options
3
Thin market?
4
The Value SR = 16 - from what I see, because P/FCF ~ 49.
This may be unfair if you read the results and they do try to make it clear that the underperformance was due to on delivery being delayed by coronavirus and that the money really did arrive shortly after the reporting date.
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The SP is a random walk i the short term. Look at the chart over 5y
I do not hold but might look more carefully if the sp drops below 80 / bounces off ~75
Their interims swung to a small loss due to delayed delivery of a contract because of global shut downs.
Appreciate the comments. I can't really see anything wrong to justify the drop and am guessing these guys could even do quite well as governments and businesses try to work out what to do re organisation of transport, commuting, people movement in the wake of Covid. I have topped up my holdings @83p.
I see little merit in buying Oxford Metrics (LON:OMG) myself.
The Yotta division continues to disappoint, with revenues up only 4.6% while they managed to more than double its pretax losses. Even if the Vicon division had not had a Covid-19 related delay its performance would still have been lacklustre with a small drop in revenue and profit before tax down over 10%. I don't consider OMG merit a current PER of over 20, and I would expect broker forecasts for 2021 to be revised downwards as they currently look far too optimistic. The chart also looks poor, with the share price below all MVAs, which themselves represent a bearish setup.
Good luck with your holding.
Well I became a shareholder last week - largely on the back of the recent Stephen English podcast I have made good money over the years investing in quality Companies delivering (one off) bad news . I also have a long background in the industry. My experience is we will see a recovery in the share price or it will get bought.
Haven't answered your question except to say I think its an over-reaction and a buying opportunity.
New to Stockopedia and super frustrated that I didn't get notified of your post. I suspect you may not see my reply either (at least not for sometime) - so if you do please acknowledge. Good luck.
Thank you for your post. I also topped up more yesterday at 81p, but wish I had waited to 79p today. It is currently the biggest loss in my portfolio, but so was Airtel Africa until it took off and nearly doubled my money in 3 weeks. I don't see why this should be as bad as its March low and think it is a good value stock that will be due a price correction. Anyway - good luck to us both!
and thanks for your reply - Stockopedia should notify us when we get a reply to a post rather than have to trawl through different shares. Down a bit more today - I plan to top up if it gets to 73p. Still like the basics and we should be rewarded for being patient. a PE of 35 is punchy ..... until you look across the water at other analytics companies - e.g. AYX is on a mental 1,000x. Not got the experience to short shares but if I had, oh boy.
Also topped up today at 78.2p
NO DEBT,
Nett Cash 10.8 mill at 31.3.2020
Cash 14.2mill 20.5.2020
Balance sheet seems pretty robust
The trend is your friend... or otherwise. If it falls to 73p, Oxford Metrics (LON:OMG) will have dropped through the mid-March CV19 support level which I would have thought would be a further negative signal. MACDs are failing to flip positively. The only positive I see personally is that they are currently indicated as oversold
Technically Andrea is right, not sure why she got a thumbs down from someone, potential bounce of support soon, whether that triggers any sort of rally I think is questionable.
Having said that, It does seem to be a stock that people are willing to pay relatively high multiples on, so buying on support could reap benefits as it would be historically cheap.
I've not really looked at the stock before, although I've been aware of it for years. I guess my only real worry would be the steadily decreasing margins, although understanding why this is so would be key. It's whetted my appetite though so will take a closer look at it.
Bit late to the party here but thought I'd still chip in. OMGs profitability and cashflows have been falling. Might be an idea to wait for the next trading update before buying.
Thanks, Mike... maybe you kindly undid the thumbs-down on my post, which I expect is from one of the several here who are Oxford Metrics (LON:OMG) bulls. The market is made out of people who are both bullish and bearish on both the market as a whole and all stocks within it.
Isn't it helpful for someone to present a negative argument? I find it quite ironic that the person who posted this discussion asked why Oxford Metrics (LON:OMG) is marked down,I'm trying to present what Isee as a valid bearish argument for this in my replies to try and help and those who are accumulating on weakness don't like it. It is a general rule of thumb that averaging down on a downward trend is a recipe for, at least, higher risk and, at worst, 'disaster' - lowering your overall buying price on any stock doesn't make your absolute losses lower. Be careful!
Hi Andrea, wise words. I, despite being a numbers person and loving graphs, haven't followed trending as an investment philosophy - it's just not in my nature to follow the crowd. This is a company I've been keeping an eye on waiting for a time to buy - I wont do this all at once - typically I buy in 3 batches - and if one of those batches goes up by say 20% I'll sell it. This has worked very well for me over time and I've had major successes - e.g. Greggs, Tristel and some major disappointments - but overall the major successes have completely trumped the losses.
The other thing I like about OMG is the industry - it is very acquisitive. My instinct is that if it drops much lower someone will make a move.
But two things we are in complete alignment on - alternate views are a good thing and don't bet the farm!
what a34 said but...
The sp of a small cap can tank because just one largish holder wants out and is selling in small chunks (NMS is 3k) and we are unlikely to ever know why, it could be for reasons entirely unconnected with OMG's prospects - or not.
Personally bearish short-term because they could not get that payment in on time.
This speaks to a less than perfect client relationship - they could have promised much free stuff in return for the money.
That OMG could not deliver indicates internal stresses that may cascade through to other late deliveries for other clients.
Personally bearish short-term because they could not get that payment in on time. This speaks to a less than perfect client relationship - they could have promised much free stuff in return for the money. That OMG could not deliver indicates internal stresses that may cascade through to other late deliveries for other clients.
I'm sorry but this is rubbish. At least go and check your facts before posting. Delivery to the customer was delayed because of COVID-19, either because OMG, the customer, or both had to lockdown. This is not the same as the customer delaying payment! Since you can't be bothered to do any homework, here is what they said:
"The Group had a strong start to FY20, recording our second highest ever first half revenue performance. COVID-19 forced lockdowns in March caused a delay in shipment of Vicon orders during the final two weeks of the period which meant we carried orders into the second half. Post period end, these have now been largely shipped to customers."
That's a perfectly acceptable explanation under the circumstances.
Si
I disagree. As someone who has worked in bureaucratic large corporates and done my fair share of procuring, sometimes no matter what the vendor offers, the process internally can't be sped up as it involves 10 people and 5 different systems and a rule book that is too strict. Delayed payments and delayed contract signings are de rigeur in procurement departments at many corporates.
OK - after 3 months of decline, hopefully the sell off has now stopped and some buying action has now started - indicated by its +48% volume change and 11.5% relative strength. I am nearly back at my average buying point, which I am grateful for.
PS (2 months later) - If any of you had acted on shorting AYX (I didn't) you would have a made a bundle!
