Short Interest in Omnicom Group Inc. (NYSE:OMC) Declines By 13.1%

Key Points

• Short interest in Omnicom fell 13.1% in March to 40,589,387 shares, equal to 13.2% of the stock sold short and a days-to-cover ratio of 8.8 days.
• The board approved a $5.0 billion share buyback and declared a $0.80 quarterly dividend (4.3% yield, ex-dividend March 11), though the dividend payout ratio is unusually high at 653.06%.
• Omnicom recently missed earnings (EPS $2.59 vs. $2.94 expected) and reported $5.53 billion in revenue versus $7.58 billion expected; the stock trades near $75.28 with an average analyst rating of "Hold" and a $95.86 target.

Omnicom Group Inc. (NYSE:OMC - Get Free Report) was the target of a significant drop in short interest during the month of March. As of March 13th, there was short interest totaling 40,589,387 shares, a drop of 13.1% from the February 26th total of 46,725,132 shares. Based on an average daily volume of 4,595,588 shares, the days-to-cover ratio is presently 8.8 days. Currently, 13.2% of the shares of the stock are sold short.

Analyst Ratings Changes

A number of analysts have recently weighed in on the stock. Morgan Stanley started coverage on shares of Omnicom Group in a report on Tuesday, December 16th. They issued an "equal weight" rating and a $88.00 target price on the stock. Barclays increased their price target on shares of Omnicom Group from $82.00 to $90.00 and gave the company an "equal weight" rating in a report on Monday, February 23rd. Citigroup lifted their price target on Omnicom Group from $103.00 to $115.00 and gave the stock a "buy" rating in a research report on Friday, February 20th. Bank of America reissued an "underperform" rating and set a $77.00 price objective (down from $87.00) on shares of Omnicom Group in a research note on Monday, January 5th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Omnicom Group in a research report on Thursday, January 22nd. Four investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $95.86.

Omnicom Group Stock Performance

Omnicom Group stock opened at $75.28 on Tuesday. The company has a debt-to-equity ratio of 0.60, a current ratio of 0.93 and a quick ratio of 0.81. The firm has a market capitalization of $21.45 billion, a P/E ratio of 153.63, a price-to-earnings-growth ratio of 0.60 and a beta of 0.71. Omnicom Group has a 1-year low of $66.33 and a 1-year high of $87.17. The company's 50-day moving average is $77.07 and its 200 day moving average is $76.95.

Omnicom Group (NYSE:OMC - Get Free Report) last announced its earnings results on Wednesday, February 18th. The business services provider reported $2.59 earnings per share (EPS) for the quarter, missing the consensus estimate of $2.94 by ($0.35). Omnicom Group had a negative net margin of 0.32% and a positive return on equity of 25.65%. The business had revenue of $5.53 billion for the quarter, compared to analysts' expectations of $7.58 billion. During the same quarter last year, the firm earned $2.41 EPS. The firm's quarterly revenue was up 27.9% on a year-over-year basis. Research analysts forecast that Omnicom Group will post 8.25 EPS for the current year.

Omnicom Group Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, April 9th. Shareholders of record on Wednesday, March 11th will be given a $0.80 dividend. This represents a $3.20 annualized dividend and a yield of 4.3%. The ex-dividend date of this dividend is Wednesday, March 11th. Omnicom Group's dividend payout ratio is 653.06%.

Omnicom Group declared that its board has approved a share buyback program on Wednesday, February 18th that authorizes the company to repurchase $5.00 billion in outstanding shares. This repurchase authorization authorizes the business services provider to purchase up to 38.1% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company's management believes its stock is undervalued.

Institutional Investors Weigh In On Omnicom Group

Large investors have recently added to or reduced their stakes in the stock. Activest Wealth Management raised its stake in shares of Omnicom Group by 2,960.0% during the fourth quarter. Activest Wealth Management now owns 306 shares of the business services provider's stock valued at $25,000 after acquiring an additional 296 shares in the last quarter. Bayforest Capital Ltd purchased a new position in Omnicom Group during the 4th quarter worth $26,000. Elyxium Wealth LLC bought a new stake in Omnicom Group during the 4th quarter valued at $26,000. Cornerstone Planning Group LLC lifted its holdings in shares of Omnicom Group by 2,126.7% in the 3rd quarter. Cornerstone Planning Group LLC now owns 334 shares of the business services provider's stock worth $27,000 after buying an additional 319 shares during the period. Finally, Legacy Wealth Managment LLC ID lifted its holdings in shares of Omnicom Group by 111.4% in the 4th quarter. Legacy Wealth Managment LLC ID now owns 334 shares of the business services provider's stock worth $27,000 after buying an additional 176 shares during the period. 91.97% of the stock is owned by hedge funds and other institutional investors.

Omnicom Group Company Profile

Omnicom Group Inc NYSE: OMC is a global marketing and corporate communications holding company headquartered in New York City. Founded in 1986 through the merger of the BBDO, DDB and Needham Harper agencies, Omnicom has built a portfolio of leading brands and networks serving clients across diverse industries.

The company's primary business activities encompass advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and customer relationship management.

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