The Tortoise and the Hare.I'm a longstanding shareholder of both CNO and OML. Both of these U.S.-based companies have been a long time in the making so it's nice to see them gaining momentum, albeit each at a different pace. I liken their narrative to that of the tortoise (OML) and the hare (CNO).
Let’s jump ahead (pun intended) and look at the hare’s story first. CNO, which was spun out of OML, has a lot going for it, including cutting edge manufacturing technology yielding high margins and profitability, and the leadership of a promising and energetic CEO. CNO’s public profile has everything investors look for: high margin growth, profitability and money in the bank and high insider ownership.
Now for the tale of the tortoise. OML's businesses are seeing growth within military and aeronautical applications. The company has competent management, and has been doing well recently with positive financial results no debt, cash in the bank and just over 15M shares issued and outstanding. It’s clear to me CNO’s recent momentum has pulled up OML’s share prices.
I anticipate continued positive business momentum from both companies, but in particular CNO’s new business momentum could be explosive, leading to a quicker increase in both market caps. Ideally l see these two companies feeding off one another, creating a flywheel effect that could push their respective market caps much higher.
OML owns approximately 7M shares of CNO and holds some debt. At some point I would expect OML to sell some CNO shares and use the capital for acquisitions to fuel growth and possibly an issuer bid. Providing the U.S. economy holds up — and it appears it will continue to do so — both these U.S.-based companies will have outstanding small-cap growth potential. I believe they could get a lift from a wider audience and will be pushing management to be more shareholder-friendly by attending investor conferences as early as this fall.
CNO's next Quarterly financial report is due by the end of October and OML end of November. There is a trade but the big money is in hanging in and giving them time to grow and get recognition from the Street. Neither company has real analyst coverage yet. It’s great to see some new investor interest and ideally engagement by participating in the Quarterly con calls to keep both these management teams on track to make us lots of money.