Fidelity Leveraged Company Stock Fund (FLVCX) — a new addition to our "Unique Opportunities" m...
Takeover at Oppenheimer?
11/15/2017 3:58 am EST
On November 1, we featured Doug Hughes' recommendation for investment banking firm Oppenheimer Holdings (OPY); in 2 weeks, the stock has jumped 50% from $16 to $24. Here, the editor of Bank Newsletter explains why he sees more upside ahead.
Oppenheimer still remains under the radar, and I believe the stock is super cheap. It may be a different story, with the relative strength building each week fast, it may catch all charts and papers next week. Once it gets over tangible book $26 or so, then maybe it may catch over people’s attention.
At OPY the insiders always buy shares each year and every year and never sell any shares. You have got to love that and even the company bought a bunch back at low prices way under book adding to shareholder value every day.
With no tax reform, I would expect they could get $38 with a deal. If a tax deal gets done, then I believe an upside target would be $44.
Fair value for the stock in this market with no takeover deal is $30.00 to $33.00, or 50% more upside still.
However, this investment bank is so relatively small that a deal is the thing that makes the most sense in this low interest rate world.
So, while the stock is certainly trading like a deal could come any day, it is still cheap. OPY also does have options which is rare with a smaller cap stock. So, you can make even more money with less capital.
Related Articles on FUNDS
Sammy Simnegar is on track for making 2020 the eleventh time in his 13 years running Fidelity Intern...
“Stocks follow profits” is the mantra for Artisan Fund’s investment philosophy; th...
June and July were especially rough on infrastructure investments, especially the midstream energy b...