Some great comments Jimmy_C. Your OCL attributes are spot on. I don't know much about TNE so can't help you compare. But generally smaller companies are higher risk, higher reward, and with lots of homework this can be to your advantage. OCL is diversifying its product suite, and the newer products are growing well, so it will become less risky and less volatile IMO.
I also think investors should put more effort into trying to predict EPS looking forward, as you and I are trying to do. Being ahead of the market is where the rewards are, and this can be done for the smaller stocks with limited analyst following.
I fully agree that my 2nd half 17 prediction may be under-baked. I try very hard to be conservative, as I find that helps with my investments. The second half is usually much better than the first, as you say. But I think the amount of spread will reduce as the % recurrent revenue increases. The wins OCL has had with the big financial companies in recent times will accelerate this trend. I agree with you that the split is likely to be closer to 40% / 60% in FY17 (my above conservative predictions are based on only 45% / 55%, which I agree could be a bit too close).
Since my last post, I have now analysed back to FY08. I don't know how to post my Excel graph onto this post, but what the exponential trend line shows is that EPS has increased from around 1.8 cents in FY08 to around 8 cents in the 9 years to 17FY (based on my conservative FY17 estimates above). There has been volatility though with most new highs followed by a lower year. However, the trend upwards is very, very clear, and getting more pronounced in recent years. Quadrupling the trend EPS over less than 10 years after the GFC has been a great achievement for shareholders.
OCL Price at posting:
$2.10 Sentiment: Buy Disclosure: Held
(20min delay)
