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Things are finally looking up for Och-Ziff Capital (OZM). The company reported better than expected earnings this week and is starting to get noticed in the analyst community as well. Given its high yield and improving prospects, it appears the stock has better days ahead.

Highlights from earnings and other catalysts this week for OZM:

  • Distributable earnings came in at 15 cents a share, two cents better than estimated.
  • The company declared a dividend of 14 cents a share for the quarter, up from 10 cents in the first quarter.
  • During the first six months of the year, Och-Ziff's flagship OZ Master fund, which boasts $20.7 billion in assets, returned 4.88 percent, more than twice the industry average of 2.10 percent
  • The stock has very bullish option activity yesterday.
  • Citigroup replaced Blackstone (BX) with Och-Ziff on its Top Picks list today.
  • RBC Capital Markets also initiated the shares as an "outperform" in late July.

5 reasons OZM offers solid value at just $8:

  1. Based on this quarter's payout, the stock is yielding 7% on an annual basis.
  2. An insider bought over $3mm in new shares over several transactions in June.
  3. The stock is dirt cheap at just over 6 times forward earnings and with a five year projected PEG of just .30.
  4. The nine analysts that cover the stock have a median price target of $11.50 on OZM, and I would look for those targets to start to be revised up based on latest earnings report.
  5. The stock looks like it has bottomed and is ready to move higher (see chart).


(Click to enlarge)

Source: Solid Earnings, High Yield And Insider Buying Means Better Days Ahead For This $8 Stock