Omnicom Group Inc. (OMC)

[investora2z]

The last few sessions have been great for Omnicom as it has rebounded sharply after the post-earnings correction. Now it is up around 10% from the recent lows. However, the volumes have not been too high during the recovery. This helps the sentiments as the stock had corrected significantly after the better than expected earnings. Now the stock is up around 22% over one year, and is nearly 45% above its 52 week low of ~$45 made in November. In Q2'13, there was 2% yoy growth in revenues and net income. The growth in emerging markets helped the company beat the analyst estimates. The operating margins expanded. The company has been doing well fundamentally over the years. It is possible that the stock may take a breather and correct a bit as the run up has been very fast. The stock is about 9% away from the 52 week high. It may require a major trigger for the stock to cross that hurdle. A seekingalpha article had predicted 7% growth in EPS based on the company's expansion in the Asian and Latin American markets. The company is also likely to gain from the rising demand for digital marketing. The merger with Publicis is also expected to help improve the overall performance of the company. It will help it enhance its capabilities in the digital arena. There may be some problems due to the merger as the two companies serve rival customers. This may lead to loss of some major accounts. Further, competition in the advertising industry is high and fragmented. IZEA (IZEA), a company in the social media sponsorship / native ads space, recently published results of a survey indicating the changed dynamics of online advertising. The exact impact of the merger will be more apparent over the next several quarters and years.