Q: Hi Team,
What are your thoughts on the company's current valuation and it's future prospects?
Do you believe this could be a long term compounder? Would you be comfortable buying it here?
Thanks,
What are your thoughts on the company's current valuation and it's future prospects?
Do you believe this could be a long term compounder? Would you be comfortable buying it here?
Thanks,
5i Research Answer:
OTEX is extremely cheap, and that makes it more interesting than it otherwise would be. At 9X earnings, investors are not expecting much. But it has grown historically and good EPS growth is expected in the next two years. Debt is high, so it is riskier than peers, but priced accordingly. It also pays a 3.03% dividend. We do not 'love' it but like it enough to keep it in our model portfolio. We would rate it more a HOLD than a BUY today, however.