The stock price continues to slide in the aftermath of the earnings report. Currently, it’s at -16% from the level of the day preceding the earnings report. Nothing new has been heard, but as an interesting detail, the company now has more cash than its market cap. Debt-free company, more cash than market cap, revenue 82.8 M
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My interpretation is that there are a few things behind the cheap valuation:
- The company has a history of 1 quarter as a listed company
- OMSE is a truly micro-cap company
- Related to point 2, the company is both small and has a very small free float (the CEO owns almost 70% of the shares as a result of a management buyout).
- The company is currently very dependent on Saudi Aramco, even though they have long-term contracts and a clear plan to expand elsewhere.
- A large cash pile, and no other allocation decision than shy communication about growth ambitions (meaning M&A and increasing R&D budgets). This may signal to the market that the company does not have a clear plan for its cash.
- Why doesn’t the company start buying back its shares if management believes it’s undervalued? Well, one reason is, of course, that the float would decrease even further, and it’s possible that the main owners want to lighten their holdings a bit. They bought this out for a couple of million, and the market value is now over a hundred million.
For the value to be realized, what is now required is simply a solid history of being listed, a clear capital allocation plan, and perhaps even the initiation of profit distribution, which would also attract dividend investors.
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I’d like to buy, but where can I see the offer levels? I wouldn’t be interested in raising it by 20% with my own purchase of such a low-volume stock.
On Yahoo!finance, prices are shown almost in real-time; just enter the OMCE ticker into the search field. I use that for these US stock market lottery tickets whose prices fluctuate wildly. I haven’t found actual bid/ask levels (cf. Nordnet) from this either, but it’s better than being blind.
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New connector orders were received in late January, totaling $2.2 million:
Additionally, a $2.3 million additional tax assessment imposed on the company’s Saudi Arabian subsidiary by the Saudi tax authority (concerning the 2017 fiscal year), which OMSE paid in 2024 to avoid late interest charges, was overturned in December 2025 based on an appeal. The refund of the funds is currently awaited.
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