Objective corp is no doubt a very high-quality company with a very aligned CEO who owns a significant portion of the business. Historically, Objective corp has bought back its Shares on market at a very opportune time and they are currently going through a buyback program that intends to buy 10% of outstanding shares on market. Does that mean management thinks business isn't valued appropriately by the market?
So I have analyzed OCL's FY2013 to FY2022 results and put some of my FY2023 and FY2024expected figures to see
![880dc27598f294beb868dc9fa1573b834fccdd.png](//strawman.com/member/uploads/objects/92/880dc27598f294beb868dc9fa1573b834fccdd.png)
Objective Revenue and Free CF graph tells how the company has performed and what my expectation for the next 2 years.
![5665bc0ad1e3659f645cdb976553f9be3f3e54.png](//strawman.com/member/uploads/objects/f0/5665bc0ad1e3659f645cdb976553f9be3f3e54.png)
Let's see how market sentiment has shifted for this company.
![e67bff74e1828fe857909b0961045d3bacd054.png](//strawman.com/member/uploads/objects/1e/e67bff74e1828fe857909b0961045d3bacd054.png)
Now, Even for my projection revenue and Net profit for FY23 and FY24, I give Price/Sales = 8 and PE = 40 valuation comes in between $9.13 and $11.32 ( Not sure if the market will give this valuation in the future - but OCL is a very high-quality company run by high-quality management with recurring revenue serviced to very defensive customers and expensing 100% of R&D (~20% of Revenue) deserve premium )
So I am a bit baffled that Objective is buying back its share in the range of ~$12.00 - $12.80. It will be interesting to see how the next couple of years unfold and will give us insight as to how to value such a company.
PS: I has similar thought when $PME were buying back their shares at ~$25 in 2019. look at it today - even in a bear market, it returned 100%.