Owens & Minor May Be Fairly Valued But We Like Its Yield
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
As part of our process, we perform a rigorous discounted cash-flow methodology that dives into the true intrinsic worth of companies. In Owens & Minor's (OMI) case, we think the firm is fairly valued at $31 per share. The firm's current share price at just over $29 is below the midpoint of our fair value range, but still fairly valued. Remember: price is what one pays for a stock, while value is what the company is worth based on its future free cash flow stream.
We think a comprehensive analysis of a firm's discounted cash-flow valuation and relative valuation versus industry peers is the best way to identify the most attractive stocks. This process culminates in what we call our Valuentum Buying Index (click here for an in-depth presentation about our methodology), which ranks stocks on a scale from 1 to 10, with 10 being the best. We like firms that fall in the center of the diagram below -- those that are liked by a variety of different investors. More interest = More buying = Higher Stock Price. READ FULL ARTICLE HERE