Jan. 30 at 4:04 PM
$OPY time to circle back here as the Capital market business roars back with a vengeance. Profits in the wealth management business have been subsidizing losses in investment banking for a while now as OPY has built out a strong banking team in a rather subdued transaction market environment. This flipped in a small way in Q3 and in Q4 the IB team produced incredible results.
Q4 EPS came out to
$6.51; there are no odd one-time items, just pure strong execution in equity underwriting (so IPOs, secondary offerings, PIPEs, etc) in particular. There is a flywheel effect to this - as they do well on deals the likelihood of getting more deals increases dramatically
The year's EPS came in at ~
$13 (so it now trades at 6.5x LTM EPS) but if they can keep it up you are looking at well over
$20 in EPS this year which means it is trading at ~4x EPS. The book value per share is
$94 so it trades at a significant discount and it cheap by every measure
PIPR, HLI, PJT, SF, EVR etc trade above 20x EPS
