People are nervous, but Oppenheimer Holdings (OPY) is a buy; the investment banking firm has low risk and low leverage compared to almost any of its peers, asserts Doug Hughes, editor of BankNewsletter.

The company had it best earnings in almost a decade last quarter. It trades at the lowest price to book of any of its peers. "Bud" Lowenthal, the CEO, is very prudent and knows how to make money;  he is always adding to this holding in OPY and he never sells.

They are growing their investment banking business and invested heavily in technology in the past few years. The balance sheet is with rock-solid, paying down 25% of their debt last year  while also buying back stock. This should be accretive to tangible book value, which is now $34 a share, or a 30% discount to cash.

Leverage has been reduced in the past few years as a result of strong earnings and liquidity. Legal fees are much lower now than in the past five years. Long term debt to EBITDA down from 8 times in 2016 to just 1.4 times in 2019. They bought back 323,249 shares in 2019 at a $25.99 average.

In my view, the bank's name and franchise is worth at least $200 million — or $16.00 a share. If you add in a conservative earnings estimate for this year if $5.00 a share and put a three multiple on it, that’s another $15 a share.

Adding the $34.00 of tangible book gives you a valuation at the low end of $65 a share in a sale. There is now way to know if this firm will be sold this year, but if it is, that’s the best risk-reward of any stock I follow. I believe that investors who buy these shares now will be well rewarded this year or next.

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