Promising time ahead for OCL.The company is really positioning...

Promising time ahead for OCL.

The company is really positioning itself to cash in on the move by enterprises to use software-as-a-service. Short term revenue growth may be lower, but the pay-off is annuity style income for years ahead.

Bigger player, TNE, goes from strength to strength. It commands a Net Profit Margin of 14.5% (and says this is likely to improve), superior to OCL's 10%.

However, OCL are committing 23% of revenue to R & D, while TNE is pulling back below 20%. (TNE state that the industry average in 10 - 12%). This should give OCL some IP clout to command some pricing power for its quality products.

OCL seems to have gone unnoticed by analyst (so far). While TNE trades on a forward P/E of about 24 (assumes EPS of 10 cents), OCL trades on a forward P/E of about 15 (assumes 5 cents EPS). OCL has stated 2H2014 is expected to be stronger than 1H2014.

A re-rating is underway IMO.