Can OPSTM be used to discover undervalued companies?
“OPS” is a very good measure to use for finding undervalued companies. Generally a struggling company’s “OPS” will turn positive or upward before its EPS. Thus, “OPS” could be considered as a leading indicator of a company’s true health. Cisco Systems (NASDAQ: CSCO) is an example of this. Despite the fact the Cisco’s EPS had turned negative its “OPS” continued on to record growth for its most recent 12 months and in its most recent quarter Cisco’s EPS also turned positive.
