OPY

Oppenheimer just posted a banner year: FY2025 revenue grew 15.9% to $1.42B, operating income nearly doubled to $211M (99.7%), and net income more than doubled to $148M (+107.4%), driving diluted EPS to $13.04. Operating cash flow jumped 274.5% to $189M against just $5.19M of capex, so the earnings are real cash, not accruals. The balance sheet is pristine for a broker-dealer — long-term debt went to $0, equity grew 15.7% to $984M, and retained earnings sit at $947M. At $104.30 that's only 8.0x earnings, 0.8x sales, and roughly 1.1x book value (equity of $984M over ~10.5M shares is ~$94/share). For a profitable, debt-free franchise, that is a genuinely cheap price.

The catch — and the reason this is a 3-conviction buy rather than a table-pounder — is cyclicality. The five-year history is violent: net income swung from $159M (2021) to $32.4M (2022) to $30.2M (2023), recovered to $71.6M (2024), then exploded to $148M (2025). The $13.04 EPS that makes the stock look like an 8x compounder is near a cyclical peak tied to capital-markets and investment-banking activity; on trough earnings the P/E would be 30x+. So the 8x multiple is the market correctly refusing to capitalize peak earnings, not a free lunch. The downside is partly cushioned by the price sitting near book and by a growing, fee-based wealth franchise — $55.2B AUM and $143.3B client assets under administration across 924 advisors — which the MD&A explicitly targets for growth via advisor hiring and 'targeted acquisitions.'