OEC - Orbital Corporation

Once trading much higher Orbital saw a big fall some time back. I got in at 53c some 5 or more years ago. Orbital has been a dog for some time now, spent significant time around 10c before picking up to be low 20s. Today it is near 33c. Any ideas why this has been on the rise of late?

I have been buying Orbital now for last 2 years.

The Indian autorickshaw program is just going into production.

The synerject joint venture is progressing well and as emission stardards become more strict for motorcycles more customers will move away from carburettors and to synerject products.

The blue sky is when a large automanufacturer decides it is good business to provide better fuel economy and use orbital direct injection, but I probably wont see it in my lifetime.

They should see a growing revenue and earnings profile over the next 3 years if you have the patience.

This from the australian..


Orbital Engine Company (OEC) 28c

Tim Boreham | August 03, 2007

HERE'S one that has snuck under the investor radar - and no wonder. The Perth-based outfit long ago scrapped its orbital engine plans, with founder Ralph Sarich now dabbling in property (and more successfully).

Yet Orbital presses the right eco-buttons in promoting its direct-injection (DI) technology, which promotes cleaner engines and fuel efficiency.

Orbital is also a China and India story, so say no more. In China, 20 million extra bikes contribute to the pea-soup atmosphere. All of them use carburettors, a cutting-edge innovation when invented back in 1893.

Orbital already enjoys royalty flows from makers of scooters, motorbikes and outboards, with its DI used in 500,000 engines.

In India, licensee Bajaj Auto is producing a direct-injected auto-rickshaw. Early indications suggest fuel gains of 30 per cent. So if DI is used on Bajaj's 350,000 units, climate change is licked and our Hollywood starlets can move on to world poverty or the fate of performing bears.

Orbital also is a joint venturer in Synerject with Siemens VDO Automotive, which makes the DI componentry, as well as other non-related products for non-vehicle manufacturers. An engineering services arm provides a third revenue stream.

Orbital has been edging towards profits -- $500,000 in calendar 2006. But if the muttering around Hay Street is right, Orbital's on the cusp of winning a big DI contract.

Orbital head Rod Houston wasn't available for comment yesterday but has already flagged the first four-stroke product will be launched this financial year. Orbital's been keeping a Pentagon-like silence about a project X collaboration with Yamaha. The idle talk in trendy Subiaco bars and Fremantle boutique breweries points to Yamaha or Honda. Polaris, which pumps out 100,000 snowmobiles a year, should not be overlooked either.

Last month, Orbital flagged an improved profit for the year to June 2007. The result will be underpinned by engineering services, which made $2 million in the first half before orders slowed in the second half.

Earnings from the US-based Synerject will be hit by the rising $A against the $US, with previous results dragged down by start-up costs in China.

Broker Patersons expects earnings of $2 million for 2006-07 (EPS of 0.8c). The firm has also pencilled in $5.8 million (1.2c) in 2007-08, subject to review after the 2006-07 full-year results on August 23.

Despite its low-key rehabilitation, Orbital has attracted a base of auto-savvy groupies on the register, but fundies aren't listening. It's understandable given DI non-starters include Ford, Saab and Mercedes.

Houston says Orbital should blast off as Synerject's Chinese investment delivers by the start of 2007-08. If not, it's a case of "Houston, we have a problem". Speculative buy.

Those who bought around 10cents in 2006 and sold today at 30.5 cents, made more than 200% profit in just over one year.

Update:-

Up 50% in less than a month...

The US Military likes it. Could like it even more when the White House gets Trumped.

Thanks for posting the Chart @Cam019

Came up in yesterdays Top Risers …

Apparently $10 million in the bank and making a modest profit … Market Cap of around $40 million …..

Rises have recently been immediately followed by falls but there was more preliminary volume in this spike … see what happens from here.

OEC looks like it's breaking into the US military drone market. Huge rise over the last few trading days.
Its investor presentation yesterday was remarkably well-received -
https://www.asx.com.au/asxpdf/20200203/pdf/44drny3ft2q5xh.pdf

I jumped on the bandwagon for a quick day-trade, jumped off for a quick buck (too soon, but can't complain). Today's close $0.665, virtually double what it was a week ago.

Ahhh, OEC: it was my first-ever share acquisition in the early 2000's, but I long since dropped it off my watch list. Time to put it back on, though I wonder if the current SP isn't a bit of a spike.

Orbital has a long and fascinating history - a lot of people have heard of them, although they weren't anybody's January 2020 competiton pick.
They may just be on the cusp of bigness, at last. (or not )

Regards,
P

Purple XS2 said:

OEC looks like it's breaking into the US military drone market. Huge rise over the last few trading days.
Its investor presentation yesterday was remarkably well-received -
https://www.asx.com.au/asxpdf/20200203/pdf/44drny3ft2q5xh.pdf

I jumped on the bandwagon for a quick day-trade, jumped off for a quick buck (too soon, but can't complain). Today's close $0.665, virtually double what it was a week ago.

Ahhh, OEC: it was my first-ever share acquisition in the early 2000's, but I long since dropped it off my watch list. Time to put it back on, though I wonder if the current SP isn't a bit of a spike.

Orbital has a long and fascinating history - a lot of people have heard of them, although they weren't anybody's January 2020 competiton pick.
They may just be on the cusp of bigness, at last. (or not )

Regards,
P

Click to expand...

The last I remember of them, was the direct injection for two stroke engines, from memory Mercury used it in some of their outboard engines.
Reading your link, it sounds as though they are still into the fuel injection space.

The Sarich orbital engine is a type of internal combustion engine, invented in 1972 by Ralph Sarich, an engineer from Perth WA, which features orbital rather than reciprocating motion of its internal parts. It differs from the conceptually similar Wankel engine by using a generally prismatic shaped rotor that orbits the axis of the engine, without rotation, rather than the rotating trilobular rotor of the Wankel.

goes on to say: Sarich orbital engine has a number of fundamental unsolved problems that have kept it from becoming a usable engine. Some key components cannot be cooled and others cannot readily be lubricated, so it is very susceptible to overheating.

probably why it was suited to outboards (from memory). 50th Anniversary coming up!!!

Purple XS2 said:

OEC looks like it's breaking into the US military drone market. Huge rise over the last few trading days.

Click to expand...

I watched Ralph Sarich describe his orbital engine on the ABC Inventors program back in 1972 and bought shares in OEC over 30 years later but I think Sarich was gone by then.
Anyhow, over the next 5 years OEC's Boeing contract alone is worth an average $70m/year and only last week the company's valuation was under $30m.
So it looks like they are finally in the game with big profits on the horizon.
The really good news is that OEC has a long track record in the products it has developed so it knows it has a technical edge over all current competitors.
I will not be surprised to see OEC double its share price after releasing its end FY results as its revenue will double again in FY2021.
(I hold OEC shares.)

After having taken a hit (-10%) today along with much of the ASX, question is: which stocks offer the best rebound prospects?
I don't know this company's supply-side well enough to know if they're dependant on Chinese (or South Korean?) components, but one thing I don't expect to recede anytime soon is the military drone market and engines therein, which as discussed above, is Orbital's current focus.

So it's my stock tip for March 2020. Last close $0.505.

Dona Ferentes said:

The Sarich orbital engine is a type of internal combustion engine, invented in 1972 by Ralph Sarich, an engineer from Perth WA, which features orbital rather than reciprocating motion of its internal parts. It differs from the conceptually similar Wankel engine by using a generally prismatic shaped rotor that orbits the axis of the engine, without rotation, rather than the rotating trilobular rotor of the Wankel.

goes on to say: Sarich orbital engine has a number of fundamental unsolved problems that have kept it from becoming a usable engine. Some key components cannot be cooled and others cannot readily be lubricated, so it is very susceptible to overheating.

probably why it was suited to outboards (from memory). 50th Anniversary coming up!!!

Click to expand...

The orbital engine was a failure, never got off the ground from memory, they turned their development to direct fuel injection for two stroke engines.
Well that is my memory of it.
Ralph got out years ago and got into property development, his family company is Cape Bouvard Investments: http://www.capebouvard.com.au/home

OEC (aka Orbital UAV) is now in the military "drone" (UAV) market, which is one of the few market sectors unlikely to be impacted by COVID-19 in a pure economic sense.
Despite that, bearish sentiment has gripped its investors and it was very recently heavily sold down.
My take on its medium term is exceptionally positive.

Over the second half of FY2020 revenue from operations is expected to be between $5M-$10M higher than the first half, and that was already 400% higher than the pcp.
OEC's long term agreement with Insitu has a value of up to $350M to 2023, so on the basis things run to plan, revenue is anticipated to double again in 2021.

In this bleak month of March 2020, a recent MOU with a Singaporean defence contractor -
https://www.asx.com.au/asxpdf/20200319/pdf/44g61yyg999s02.pdf
- helps to soothe the nerves.
Trading over the last couple of weeks has seen some sell-offs in small volumes, but there would appear to be sufficient True Believers to be willing to buy into the lows, and keep the SP in the mid-to-high $0.40's:


Last trade for today (Friday 27th) at $0.45.

I maintain my True Belief. Should such a thing as stability return to the ASX, Orbital should romp along nicely.

Regards,
P

OEC was truly one of the "unloved" smallcaps for a very long time before it grew wings in late January this year.
OEC has today broken above resistance and now looks destined to reach a price in the dollar range by next year at latest. Below charts its price action over the past 2 years.

Signed with Northrop! Hope you are making a fortune Purple rederob.
It's amazing, should have paid more attention.
Last time I looked they were doing boat motors.

The below chart is the "hourly" continuation of the one I posted on 20 April.
As you can see, the strong uptrend has been given impetus from a new contract with Northrop Grumman:


Trading volumes on this stock are typically low, due in part to having only 78M shares on issue.
Even though I hold about 15K shares, if the gap is filled in the near term, I will be adding more.