OMI? Ok. So it's a medical supply company. Revenue has fluctuated over past 15 years. Now it's only somewhat higher than it was 15 years ago. Covid was tough on the company: it's only loss year was 2018 of the past 15. Not sure I have fiscal year mixed with calendar year, but it looks like stock got as low as about $2.47 and as high as $8.22 then. It used to pay a dividend, but that got eliminated during Covid, and not reinstated. In most years the dividend yield was not really attractive -- 2-3%. (Got much higher with falling stock price around 2018.)
I listed out some possible current negatives: New acquisition. We don't know how it will play out. More debt used.
Not much really attractive to me about the company in my surface review. I shall expect the company to continue its mediocre ways, that maybe revenue can move up with the acquisition. Maybe the accounting for the acquisition will help.
What attracts me is this company often gets some investor interest. In the past 15 years, excluding '18 through '20 and today's cratering to $9.23, the stock has not sold below $12.23/sh (in 2023). Again excluding the Covid years, the lowest high selling price has been about about $23 in 2023. There have been several years where the stock got up over $30/sh.
So I'm looking at a reversion-to-mean. I'm guessing risk of stock remaining at $9 is low, unless there are new or further adverse developments to the business or with economy or stock market. The upside potential, I'll speculate at maybe $12 with guess of 80% probability. Further, maybe 3x = $27 with maybe(?) 30% probability. In two years?.
I could be very wrong (company become a further disaster), and I have been wrong many, many times. I keep a diverse portfolio though (by position size and number of positions), so if I am wrong here, my portfolio won't be devastated. Conversely, it won't be a life-style change for me if the stock does perform as I hope. |
