Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
HI. So, I am writing down my current thoughts on Open Orphan, a share with fantastic possibilities, but the share price (not the company) has been pretty frustrating of late. I’m not an analyst. And these are just my thoughts.
With the last Investors Meet Company presentation came a subtle but fairly sharp reset. Realism struck as they said that the remaining spin offs would probably come post-Christmas. This was quite a change following repeated declarations of autumn and pre-Christmas as targets.
It almost seems like a play to have the share price behave more normally, whatever that means. My instinct is that the current share price does not really reflect much value from the spin offs. Orph are not really giving much sight of what is going on with them. And if you remember with the Poolbeg spin off, we were given little to no information, and I certainly had very low expectations. Then as time went by after the POLB spin off, it became apparent that this was actually a proper company with a proper vision. I for one was very surprised. My point is that Orph may or may not give us clear sight on the spin offs. I suspect they will not want to ramp up the share price too much or cause volatility. Why advertise how great DIM (which many think it truly is) is to the wider market, when they don’t need to? Will they just quietly announce the close date, or will they give out more information beforehand? What does everyone think?
The Covid news, where we might see some proper contracts from non-government, are not here yet. And OO put a safety valve on this by declaring £50 million target for 2022, excluding Covid. This is probably a sensible measure, as it takes out some of the sting from unexpected turns with Covid testing and the progress of the virus itself. But probably (and hopefully) understates what could be possible. I think this is a play to reduce our susceptibility to Covid news, or being seen as a Covid play (which Orph is not). I don’t think the SP has much Covid work priced in either.
It seems Open Orphan has quite a lot of retail investors (of which I am one). There is no problem with this, but it is often hard to hold onto stocks as they dip. “Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.” – Peter Lynch.
As has been shown on Twitter (with screenshots of adverts), Orph is recruiting staff for Covid challenge trials. My instinct is that there is some news that could drop at any time really. Could be weeks or months. But will most likely (IMO – no insider knowledge) be bit by bit. But if something opens up here the total price target of 44p from Finncap could be upgraded quite quickly as they said their target excluded Covid work (I believe, correct me if wrong).
Continued...
An article from a few days ago that I do not recall being posted that has a section on Open Orphan:
https://knowledge.sharescope.co.uk/2021/09/27/weekly-commentary-27-09-21-new-tech-old-laws/
From the article:
"For readers hungry for risk this could be an interesting investment, similar to Ixico and Cambridge Cognition (see below) which also have business models around making clinical trials more effective. All of these companies are providing services to pharma companies, and could benefit from the flood of money that’s likely to flow into life sciences following the virus."
I feel the intentions have been good recently from Orph, even though pursuing an under promise over deliver strategy is a somewhat change of tactic. And the share price is just pausing now to take this in I feel. The cash dividend is now most probably after the spin offs. And the spin offs are more likely months away. That wasn’t the message before. But it looks all in hand. And you just never know when those excellent pieces of news will drop. There is so much news that could come in that I prefer to be in rather than chance waiting.
It is sooo easy to get negative on a share. And it is often there where the patient make their money (as Moniman is alluding to). So much about OO is rosey. Revenues up, profitability coming along, a CEO that wants what the shareholders want, and operating within an area that, although it’s not a perfect moat, it is a moat that will take a while to cross by any competitors. .
The talk of NASDAQ is really exciting. But there is a lot between now and then. But you never know right! And CF does have form with Amryt, which he mentioned in the recent presentation.
The long slide in the share price started with the 2020 accounts. And then an aggressive seller threw fuel on the fire. Even though the accounts were 6 months after 2020, some took fright, along with the share being ex-dividend. Now we have some new real numbers that mean 2021 will most probably be about double last year in terms of turnover. Which I think is solid.
I believe the main issue is patience. When stepping back, and seeing all the things that are brewing, and looking through a two year lens, this has the potential to really reward investors.
If looking through a two month lens it is easy to want the spin offs, NASDAQ, cash dividend, Covid contacts, other contracts, 4th facility all now and get frustrated. All the more frustrating for anyone having bought higher.
These are my thoughts today. I am bullish on OO. Rampy? Uhhm, maybe. But I feel what I say is realistic. I want the share price up above 30p ASAP and then to push on. But I got POLB shares that are cooking away in the background too. So to new investors, the dividend species you hear about are not fiction.
All just my opinions. DYOR.
Personally, I’m really happy with that. I thought if H1 exceeds all of 2020 that would be really solid.
I liked this paragraph:
"Targeting revenues in the region of £50m for 2022 in non-COVID-19 work, reflecting signed contracts and contracts in advanced negotiations, ongoing momentum in the core business and ongoing market growth. COVID-19 revenue for 2022 will be in addition to this and will depend on the eventual timing of these studies"
This tells share holders that any Covid contracts won in 2022 will be in addition to this estimate. Which could cause great excitement if ORPH start winning extra Covid work in this brave new world.
I’m fully invested in Open Orphan, so cannot buy more right now. But I would. Continued strong hold for me.
Vox Markets mention OO at 5.05 mins for a short while.
https://youtu.be/wp0Nfbyosv0
Agreed Be Contrarian. Either way, a solid first half of £22 million plus would exceed the entire last financial year total and can do nothing less than underpin a higher base in the medium term.
I just sold 2000 of another share. And I am looking and researching other companies to put it in. Then, even though I am overweight in ORPH, I thought, what other company am I more confident in? So I put another 2000 into ORPH. And I feel good about that. I know people have been disappointed in the big drop. But most likely scenario is a push up in price and some dividend species announcements shortly. Once you get a dividend in species, like POLB, you then have a new company in your portfolio. It is kind of a diversification in a way. :-) It is still a long term hold for me.
Of course, the share price should hopefully surge on the 1/2 year financials!! :-/
But as Ryan says ORPH can be a bit unpredictable.
I did get fearful on the huge drop from mid 40s, but didn't sell anything. But it did eventually find the bottom. For me, as a LTH, my thoughts are to just hold through the dividend species, of which there are 3 more to come. Hopefully collect a token cash dividend somewhere prior to Christmas (as CF talked about), and then see how ORPH trades all by itself. By the time this happens I believe there there will be much more financial information and more contracts for the ORPH share price to hold it's head high.
I have no inside knowledge, but I would be very surprised / delighted to see all the dividend in species done by Christmas. But if 2 more were done I would be very happy.
There is talk of a potential buy out once ORPH is clear. This may or may not be. There may be some SP ups and downs in all this, but as the business case for Open Orphan gets stronger over time the share price has to follow suit eventually.
(Just my personal opinions) DYOR
Nice to see the strong buys coming in.
There is someone aggressively selling today. But there is also plenty of appetite for buying at this level. Looks a bit like a ping pong match with 100,000 share orders going back and forth.
It is so easy to knock the CEO. But if you look at the news and RNSs in general, news is good, with new studies etc. And there is often logic to when the RNSs come out. How the market receives this is up to the market. But I'd like to think that we are getting to the SP level at which people just go, I need to buy that. For new investors I think it must be starting to look very cheap.
I happy to hold, as business fundamentals remain very strong.
The link: https://youtu.be/stLEMB03CWA
Cobra. For me it is a buy right now in terms of value. Where the share price goes, that is up to the market. Half year figures are due out end of September which many think should point the way to at least a doubling in revenue this financial year. 2021.
There will be news out about the in specie divdends at some point. Many are very excited about DIM (DIsease in Motion), as it is health data. A large seller, a news black out during the Poolbeg spinoff, summer on AIM, the publication of 2020 accounts (historical) has caused the share price down.
In my opinion, there are those keen to put money into Orph. And many believe (me included) that the price will be heading upwards. Recently the share price has found support at about these levels. We have had occassions these last weeks where the SP has looked to get some momentum for the seller (7.8 million shares) to dampen momentum. This seller is now out. So with a bit of news you would expect the rise to start, when people get the feeling they really must hang onto these shares.
I bought some more at 23.7p. Hope this helps. As ever, do you own research.
Here is the latest investor presentation. It is an hour long, but if you just want quick overviews, there are slides that you can skip to and read.
It would be good if this was one seller. It has to be said they make Invesco look like angels. At least Invesco had consideration for the share price and although they suppressed it considerably for a long period of time, they rarely crashed it. I think they have had a large part to play in the last 6-8 weeks. (Just my personal opinion). So will be nice to see them fizzle out any time about... now :)
I think this seller has taken away momentum when it wanted to happen at various times over the last 4-6 weeks. And when this happens investors can decide to wait to make their purchases, which then dents confidence overall. My personal feeling is there are a lot of people ready to buy. And it could really get momentum again.
It will be really interesting to see the new momentum that happens when the bears wear themselves out. I have really been thinking about Benjamin Graham’s description of the market being manic depressive. This has certainly been a depressive stage. I have a signification ORPH holding. A number of times I have felt the optimism come back in in the last weeks only for the seller to suppress my enthusiasm. I believe when the market does turn we could indeed be heading up and all have forgotten this.
But I also think about Buffett and his phrase about the market taking wealth from the impatient to the patient.
I believe some key things that will help now are:
- When the big seller / sellers are out of stock
- When we get some real revenue figures that we can rely on for helping to forecast the total revenue for 2021. Maybe some clues this coming Monday?
- News on DIM or other dividends may or may not help the share price, as has been shown in the past. But some more concrete info will encourage the LTHs.
GLA
I also had a little twinkle of hope DIM could be the surprise in coming days. But my gut feeling (no evidence) is that it might be more of a contract type thing. But he seemed very congruent and confident on it. Hope it is DIM though. :)
I meant £50 mill this year...
So £50 mill plus next year seems eminently possible. He says Orph value should be at least 6x that based on other companies. But our uniqueness could even make a case for 8x.
So after all 4 assets are spun off we should be left with a minimum market cap of £300 - 400mill. PLUS you will have the four spins offs. He says each spin off about 10-20% current market cap. Last presentation he said 4 spin offs by Xmas. This time he said autumn.
The CFO said they expect in 2022 to up revenues at least another 30%. Cathal also said that they would expect to double the SP of spin offs in 6-9 months I think.
So in a years time I could make an argument, based on the above, of a market cap of £400-500 mill. And spin offs worth £200 mill market cap. This would put us in the ball park of the billion dollars.
I hope my numbers are on the cautious side. But I would personally take the above and be delighted with more.
DYOR GLA
Hi GrimTim. The general feeling has been that the shares are now ex dividend. So the time to pick them up has passed. Someone may correct me. DYOR.
Good spot on the Poolbeg video Dig-Deeper.
So, genuine question, when would LSE make a new board on here for Poolbeg? How does that come about? As it is another company now, and chat will need to move off the Orph board as more investors come in ex dividend.
Yes I liked the use of the word "pipeline"
And also it brought Jigger_1 back in from his 40 days and 40 nights convening with the higher Orph beings.