Omega Flex: Too Early For Optimism

Daniel JonesInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryOmega Flex faces persistent revenue and profit declines, driven by weakness in the residential housing market.OFLX maintains a strong balance sheet with no debt and $49.3 million in cash, but its valuation is not compelling.Multiples suggest OFLX trades at fair value, with only slight relative cheapness versus peers on select metrics.I rate OFLX a soft "Sell" given ongoing fundamental deterioration and limited near-term recovery prospects. Dmitriy83/iStock via Getty Images I have always been drawn to companies with simple business models. And one of the firms with the simplest business models is Omega Flex, Inc. (OFLX), a producer and seller of flexible metal hoses. These are used to carryThis article was written byDaniel Jones36.04K FollowersFollowDaniel is an avid and active professional investor. He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.