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OZForex – off the charts

OFX Group (OFX, formerly OZ Forex) has one of the strangest charts of a top 200 company (below). The price action between mid-November 2015 and mid-February is entirely isolated from the preceding and following trading. Thankfully, a story goes with it.

OFX is a good example of B2C and B2B working hand in hand. The company provides international payment and other forex services directly to consumers, while offering a platform based turn-key solution for institutions, enabling them to offer the same forex services to their customers.

The spike in price last November was due to a “non-binding, indicative and conditional” bid for the company from payments giant Western Union. The fall three months later occurred after Western Union walked away. Cynical traders suggest this was always WU’s intention – they simply wished to look under the hood of this fast growing competitor.

After a share price recovery, further falls followed changes of the board. Now it’s just above its all-time low at $1.812. Some analysis calculates this share price is around 17x forward earnings, with a long term growth rate around 15%. A PE/G ratio just over one puts it on my radar.

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