Och-Ziff Capital Management Group Inc. looks like a good investment option right now, driven by strength in fundamentals, and good earnings and sales growth prospects.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 9.3% upward over the past 60 days, reflecting that analysts are optimistic regarding its earnings growth potential. Thus, the stock currently sports a Zacks Rank #1 (Strong Buy).
Moreover, the company’s price performance looks impressive. Its shares have gained 58.2% over the past six months against a 5.7% decline recorded by the industry.
Here are a few other aspects that make Och-Ziff Capital Management an attractive investment option now.
Revenue Strength: After witnessing a decline in the top line over the past few years, the company’s revenues are expected to improve in the near term. It has projected sales growth rates of nearly 25% for 2019 and 26% for 2020.
Earnings per Share (EPS) Growth: Och-Ziff Capital Management witnessed negative earnings growth over the last three-five years. However, this trend is expected to reverse in the near term as reflected by its projected EPS growth rates of more than 100% for 2019 and 22.4% for 2020.
Notably, the company has a decent earnings surprise history. It recorded average positive earnings surprise of 41.1% over the trailing four quarters.
Superior Return on Equity (ROE): Och-Ziff Capital Management’s ROE is 115.16%, significantly higher than the industry average of 13.24%. This indicates that the company reinvests its cash more efficiently than the industry.
Favorable Valuation: The stock looks undervalued right now in terms of its price/cash flow (P/CF) and price/earnings (P/E) ratios. The company has a P/CF ratio of 6.57, which is below the industry average of 8.49. Moreover, its P/E (F1) ratio of 8.74 stands lower than the industry average of 11.01.
Further, the stock currently has a Value Score of B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank of 1 or 2 (Buy), offer the best upside potential.
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