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Hi Extrader - had a read of your comments re SYME and also contacted a friend of mine who subscribes to Shsre Prophets. It appears the TW allegation is also that term sheets has been wrongly booked in the accounts as revenue (not to be done under IFRS rules ) and TW has written to the authorities to inform them of this, hence the accounts will have to be re-written showing no revenue. Like you, I think I’ll not be investing there atm and investing more here in ORPH. ATB
I agree, and have no doubt the new appointee will be of the right calibre. CF wasted little time when he took over in culling the dead wood who were previously just content with taking big salaries and “funnies” (to quote CF). The staff that were kept will have been the most productive and he’s empowered them too in order to produce more. Ditto any new staff. I hope, but am not sure, that all staff are included in a decent share option scheme so that we shareholders can know that every employee, not just CF and the top brass, will be working their socks off every day to enhance ORPH’s prospects. GLA
Hi Extrader- just been browsing Morningstar and read a story re SYME, which I considered investing in some months ago, and might take a very small speculative investment there again. Popped over to their board for a browse of the chat to get updated and noticed you were posting there too. Also, have you read the Share Prophet allegations?
PS ORPH is my major shareholding so apologies in advance to all for posting this here but I figured Extrader could reply here without having to suffer any detrimental comments from SYME posters if he said anything negative to say regarding the investment case for SYME. GLA
Thanks Extrader and others for your replies. GLA
Extrader - I noticed in CF’s presentation on Wednesday that he spoke briefly about the possibility of purchasing more shares himself (a possibility you flagged up just before the presentation) but CF said might be excluded for some reason or another. Do you (or anybody else here) know what this means in practice exactly? TIA
Demon, I’d too would be in favour of a buy back of shares at today’s market price, but not if Invesco want a higher price now in order to get a deal done. Why should Invesco make an enhanced profit, in a buy back, which would be at other shareholders expense, when they are the cause of the share price being held back? This share price is only going one way and the Invesco sales will only slow it down temporarily, but will not stop it reaching its destination price, whatever that might be. GLA
Can’t get a singing John Barnes out of my head when I read this :-). GLA
Keep your house. Sell the car. Sell the white goods & furniture. Sell the kids’ toys. Sell your golf clubs and Xbox. Buy some more shares here. GLA
Extrader - think you’re very possibly onto something there with your speculation that CF may personally be wanting to buy more shares in ORPH.
He’s said this is heading towards being a “billion dollar Company” so why then let your brokers issue updates which suppress the good news story?
My understanding is that he still owns 9% or £33m of Amryt Pharma Plc (current market cap of £366m). However, they’re not that close to profitability as yet, though things set for big improvement in 2020 estimated sales of £180m, from £58m and £17m in 2019 and 2018 respectively. They’ve taken on new II investors in 2020 also (unlike ORPH hove had a net loss of II investors)
I think it’s probably very difficult therefore for him to sell any holding there at present to purchase more ORPH shares as it wouldn’t look good at this point in time and would undermine market confidence and the share price. Also he may be barred from selling for a period on the back of agreements with new II’s who’ve recently bought in there? Maybe the time bar is set to expire in the very near future allowing him to sell some shares there?
All speculation of course, but it’s the only explanation that makes sense to me for CF constantly keeping a lid on the share price.
GLA
Finncap report issued on 6-1-21, less than a month ago said ;
“Open Orphan is in negotiations to secure a new quarantine facility in 2021”
“Forecasts exclude potential revenue from a new quarantine facility”
Very strange today’s update hasn’t increased the target price based upon increased revenue. Incompetence or intentional?
GLA
I agree. CF’s often spoken about not letting the share price get ahead of itself. I can’t see a scenario where the broker would go rogue and produce its own findings which contravene what the ORPH management would like to be portrayed to the market. GLA
CF’s moving to London don’t forget. Could be the new family abode ; - )
Metaltiger - Don’t think you must have you’ve seen my 3 posts on Thursday this week about Ergomed (ERGO) but the general thrust is that declared profitability (RNS’s) is what has drove their share price up. Oh, and ORPH is way undervalued by way of comparison, based on ORPH’s forward earnings multiple. GLA
Not surprised CF has elected to appear at the Mello event on February 22nd. Their online discussion last Monday where ORPH was discussed by four guests was a smorgasbord of ill informed and poorly researched ‘expert’ opinion, relying in the main of a Stockopedia screenshot of financial information as their main source of reference. Worst £12.00 I’ve spent this year and won’t be spending again with Mello after CF has appeared. GLA
Furthermore, I’ve checked back on ERGO’s historical financials in order to map the correlation between profitability and its effect of its share price, and the results are illuminating IMO.
In January 2016 ERGO’s share price was 170p. In April 2019, over three years later, it was 167p. No profits were made (declared) in this three year period hence the share price barely moved.
However in 2019, after three years of losses, ERGO achieved profitability. It issued an RNS in May 2019 and stated it “expects revenue and EBITDA to be materially above current market expectations” The Exec Chairman said “we continue to see the benefits of our focus on improved financial performance and profitability”.
Then in July 2019 it issued another RNS fleshing out progress with some figures, and stating “we have delivered growth as a profitable and cash generative business”. In September 2019 it issued an RNS which detailed half year EBITDA of £6.5m.
As a result of the above, starting from a share price at April 2019 of 167p, the share price rose steadily through 2019 and finished at 393p at the end of 2019, all driven by RNS news about profitability.
The share price then dipped steadily over three months down to a low of 280p on the 17th March 2020.
On the 25th March 2020 the Company then issued an RNS detailing Audited full year profits of £12.5m. From this point the shares began a steep climb. In July 2020 another RNS was issued with a trading statement showing “profits would be ahead of expectations”. In September another RNS stated profits for the half year would be £9.1m.
ERGO issued another RNS just a couple of days ago on 26/1/21 stating it expected “profitability to be ahead of current market expectations”. (It’s share price has risen 17.3% in a few days on the back of this RNS announcement)
Thus from March 2020 onwards the share price climbed from 280p to 1150p (as of today). All this was RNS news driven, and the news related to profitability. That link is crystal clear I think.
The good news for ORPH share holders is that we shouldn’t have to wait for trading profits to fully feed through in order to see a decent increase in the share price. News on a wearables deal and Imutex should do that, hopefully in the next one to three months. Then from mid year, RNS news about profitability should then do the heavy lifting of the share price, IMO.
Throughout this year I expect CF will issue trading updates and interims, and I further expect each update will be more positive than the previous (just as ERGO’s were) thus ensuring the share price maintains its upward momentum over the year and into 2022.
Now that we’re profitable, the race is on to catch up ERGO and be the first to reach “a billion dollar Company”. I wouldn’t bet against it being ORPH. GLA
Furthermore , according to another one of Stockopedia’s analysis tools, ORPH’s PEG (price to earnings growth ratio) is 0.1
ERGO’s PEG is 2.2
Stockopedia states “a PEG ratio of 1 is supposed to indicate that the stock is fairly priced. A ratio of between 0.5 and less than 1 is considered good. A ratio of less than 0.5 is considered excellent”. It goes on to state “The theory of PEG investing is that you should aim to buy Companies on low PEG’s of less than 1 so that you should get more growth for your buck”
Therefore ORPH’s PEG at 0.1 falls into the ‘excellent’ band, and is in fact the most ‘excellent’ that can be achieved within this band.
GLA
Been reading the comments on here about a 12p valuation. Sometime ago I posted on the above subject of ORPH and ERGO (Ergomed plc). I thought now would be a good time to revisit this to remind us all what we are currently sitting on.
On the Mello presenton on Monday ORPH was put through the rinser by 4 ‘experts’ and one of the experts referred to a document back in January 2020. I therefore looked back at CF’s online presentation from then, and noticed for the first time that the ORPH January 2020 presentation document had a note about ERGO at the very bottom of page 13, for comparison purposes. (NB I made my previous Orph v Ergo comparison posts in mid 2020, and I only made the comparison after discovering ERGO around this time from an online Aim tipping service)
CF has therefore compared ORPH to ERGO, so I’ll do the same again as they are operating in the same space, albeit there are operational differences between them. However they are also of a comparatively similar size at the moment, with both growing rapidly and both achieving profitability fairly recently (though ERGO achieved this in 2019)
All the financial information for both Companies has been taken from Stockopedia.
ERGO’s Sales for 2017, 2018, 2019 was £47.6m, £54.1m & £68.3m.
Its estimated sales for 2020 and 2021 are £86.3m & £120m.
ERGO’s Net Profit for 2017, 2018, 2019 was -£4.50m loss, -£8.9m loss and +£5.57m profit . It’s estimated net profit for 2020 and 2021 is +£12.9m profit and +£13.8m profit.
ORPH’s Sales for 2017, 2018, 2019 was £15.3m, £12.3m & £3.54m. Its estimated sales for 2020 and 2021 are £22.8m and £37.2m.
ORPH’s Net Profit for 2017, 2018, 2019 was ; -£1.47m loss, -£4.22m loss & -£5.74m loss. Its estimated net profit for 2020 and 2021 is -£6.27m loss & +£7.06m profit.
ERGO currently has a Market Cap of £536m and is currently trading with a PE ratio of 43.2 for 2020, and 36.1 on a 12 month Forecast Rolling PE ratio for 2021, according to Stockopedia’s analysis.
Here’s the interesting bit : ORPH currently has a Market Cap of £164m and is trading on a 12 month Forecast Rolling PE ratio of ONLY 5.4 for 2021 according to Stockopedia’s analysis.
NB The Stockopedia median statistics in respect of the PE ratio for the whole ‘Bio & Medical Research Sector’ is 32.6. Both ORPH and ERGO are in this sector according to Stockopedia.
Thus according to this data, ORPH could have a market cap of £230.6m (32.6 x £7.06m). Or 34.5p per share. If we use the profit forecast of £9m from ORPH’s broker Arden issued in November 2020, then we get to a market cap of £293.40m. Or 44p per share.
*And these valuations DO NOT INCLUDE potential revenues from a 3rd or 4th quarantine facility, sale of Imutex and prEP Bio assets, monetisation of infectious disease data (wearables), development of new challenge models, and potential for licensing challenge agents. (CF has guided us so far that Imutex and wearables could be worth circa £300m, possibly more). GL
Markshares, I’m not being critical of your post but there’s an alternative scenario to consider if CF hadn’t been so confident and enthusiastic about the timelines for the deals. His confidence has helped to drive the share price up to where we are now. Yes the timelines have slipped, but these are large and complex deals. Had he not been so vocal and enthusiastic we might well only have a share price of circa 15p. At this point in time, the vast majority of shareholders would be poorer. At 15p, I think every investor knows that we would, as of today, be massively undervalued. A lot of posters would then be saying CF needs to promote or ramp up the pending good news stories. Then our frustration levels would only be heightened. I think therefore we are therefore better off in the current circumstances. GLA