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ORIX Corporation (IX-N) is a financial services company operating through six segments: corporate financial services, maintenance leasing, real estate, retail, overseas business, and investment and operation.
The company scores 100 per cent on the James O'Shaughnessy-inspired model based on earnings-per-share persistence, price-to-sales ratio and relative strength.
The O'Shaughnessy Cornerstone Growth methodology requires that a company's earnings increase each year for a period of five years. IX's annual EPS ratios before extraordinary items for the last five years (from the earliest to the most recent fiscal year) were 0.63, 0.85, 1.34, 1.75 and 1.94.
With the O'Shaughnessy model, the price-to-sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identifies growth stocks that are still cheap to buy. IX's price-to-sales is 0.83, based on trailing 12-month sales.
My John Neff-inspired model favours ORIX's price-to-earnings ratio of 7.38, which is between 40 and 60 per cent below the current market ratio of 14.00. The Neff model also likes the company's sales growth of 25.2 per cent, based on the average of the 3-, 4- and 5-year historical sales growth rates. It also favours ORIX's total return/PE of 4.54.
ORIX is considered a "fast-grower" by my Peter Lynch-inspired model. It views the price/earnings-to-growth ratio of 0.23 very favourable.
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