Started looking at ODA this week after reading their 4C. Interesting little business which seems to have reached a point of sustained profitability and some growth apparent. Not sure what the runway for the growth is.
Orcoda Limited is an integrated technology company that provides smart technology solutions for transport logistics and transport infrastructure services. It operates through two segments: Healthcare and Transport Logistics segment, which offers products and services such as consulting and software-as-a-service based on its Orcoda Logistics Management System (OLMS) platform, helping providers across both transport and healthcare logistics industry verticals with optimized job scheduling and routing for their vehicle fleet as well as enhanced fleet management, or an outsourced model whereby the Company supplies its fleet and/or drivers utilizing its OLMS platform to deliver cost savings to clients; and Resource Logistics segment, which offers infrastructure services and the Orcoda Workforce Logistics System (OWLS) platform, with contracting and management capabilities. Its expertise is focused on three sectors of transport logistics technology and transport services: road, rail and air.
Its priced for some decent growth, FCF last year was about 0.12c and eps 0.24c so its trading on a PE of about 115x! Implied growth from the FCF is about 10%!
Will be interesting to see what the numbers look like for H1 in terms of closing those multiples. Revenues dropped a lot in Q2, but it looks like H1 could be a run rate of about $1.5m FCF, which if it were annualised, FCF would come in about 0.18c and maybe 0.30c EPS - which would still make the business too expensive. Probably needs to do a fair bit better in H2 to justify the price currently. I would also need to get some conviction about the runway for the growth as well. If they could get FCF to about 0.015c then I would be a lot more comfortable with the current price - but thats a big ask and the price would probably run up with it.
The critical element will be what the scaling looks like, because if it doesnt scale sharply, they wont grow into the current price, ever.
