Orchard Funding Share Discussion Threads

[97peter] 08/12/2021 10:29

The growth, cash flow and no debt, plus divi are great! Plus it has a decent order book and forecasts for 2022, plus with a share price 12p under the NAV price and trading at a discount, what is not to like and invest in medium and long term, with a 5-6% divi and a 22% growth over the next 2 years!

[belfry17] 07/12/2021 13:24

It looks like the tide may be turning again. There are profits, a low share price, a dividend and good management to go with it.

[rainmaker] 14/9/2021 15:09

Lol, a good old fashioned "Tree Shake" by market makers at Orchard Funding today, a small volume of sales, I think some £11k in five trades at circa 55p and the dealing spread has gone from 57p/60p yesterday to 52p bid, 60p offered. The mid price is now showing as 56p -2.5p

regards

[brucie5] 02/7/2021 14:57

Excellent, thanks Rainmaker. Currently no room in the inn, but should one become available, this will certainly be on my list.

[brucie5] 02/7/2021 14:28

Thanks, Rainmaker, duly noted, and I will be taking more interest in your posts henceforward, having crossed wires already on CNKS. Of your two pick above, ORCH look of interest to me, from chart perspective and because it actually gains a citation on Stocko as a Free Cash flow Cow. Finally, a dividend of 5% is not to be sneezed at.

Do you have a target?

[rainmaker] 02/7/2021 11:19

Hi Ben,I know that you have already bought both but for your reference a copy of my original message on the Value thread posted on 20 May 2021.Although both share prices have subsequently risen, Orchard Funding(ORCH) is now 59p bid,62p offered, up 15.24% and Vector Capital is now 59p bid, 61p offered,up 23.71% IMHO there're both still very cheap and IMHO there should be plenty more upside. Orchard Funding is still trading at a discount to its net working capital and Vector, at a small premium.





A Value Investing forum, I can't resist, I have to make a quick "pit stop".Heres a couple of IMHO impressive "net nets" that I recently bought and haven't seen mentioned on this thread-


Orchard Funding(ORCH)
Market Cap £11.2mln
Number of shares 21.4mln
Share price 52.5p
Spread 50p/55p
p/e 8.13
Dividend yield 5.71%
Trading at 6.75 times, 7 year average earnings.
Net Working Capital-£15.43mln or 72.11p a share
Bargain Ratio 1.37


Vector Capital(VCAP)
Market Cap £20.4mln
Number of shares 42.0mln
Share price 48.5p
Spread 46p/51p
p/e 8.69
Dividend yield 2.94% but forecast to increase to 5.36%
Trading at 12.37 times 3 year average earnings.
Net Working Capital-£21.297 or 50.7p a share
Bargain Ratio 1.04

The reason I've bought both shares is that they are not only both very cheap, Ben Graham "bargains" but also they are both good businesses and consistently profitable,with great margins, making returns on capital employed in double digits. There're also long established and proven businesses. I believe that Vector Capital was founded in 1978 and Orchard Funding has been around some 23 years. Both pay dividends so effectively you are being paid to wait for an increase in the share price.

Both are involved in the funding business, effectively they borrow money to lend at a higher rate. Its a simple and easy to understand business model.Orchard provides customised financial fee funding solutions to accounting firms, professionals and small businesses. Through their subsidiary Bexhill, there are also involved in insurance premium funding so rather than a Customer having to pay the whole annual premium in one go, they arrange instalments say quarterly or even monthly. I read that they have never had a customer default on a payment.

I'm holding both for at least a couple of years and expect to do well.

AIMHO, DYOR

I'll try to update more on Vector Capital later.

[ben value] 07/6/2021 18:20

Hi Rainmaker I hope you are well. Good to see you are still around! I am interested in this share but I am not sure if I have missed the boat now that it has risen to 57p. Regards

[rainmaker] 21/5/2021 10:32

"slammed" is a bit of an unfortunate pejorative term with negative connotations. For anyone unfamiliar with Stockopedia/piworld, the Investor has a favourable view of Orchard Funding and believes that at the current share price, the Company is undervalued.

I note that over recent months there have been a 25k clip seller unwinding his holding without which I believe the share would have risen. He waits for 25ks of purchases then sells another 25k at 50p. However he may have finally sold all his holdings as there were approx 50k worth of purchases yesterday and just a solitary 25k sale at 51.5p

[tomps2] 21/5/2021 09:20

Orchard Funding (ORCH) was ‘slammed’ by William Woodard in the Stockopedia/piworld Stockslam held on Wednesday 19th May. Listen to William's pitch at 53m13s

Video:

Podcast:

[mach100] 09/3/2021 11:30

Solid HY in the circumstances. Divi of 1p shows confidence. Off-radar to investors and will most likely stay that way. I intend to add more.

[mach100] 22/11/2019 12:59

Moved quickly on a few trades including mine in the last few days. A similar retrace can be expected on sales but hopefully the banking license will come shortly and give this Orchard the Vit C it needs.

[topvest] 31/10/2019 21:00

Well its all very quiet on this BB. It's probably a positive sign that I am talking to myself....and resident troll!

[topvest] 31/10/2019 08:57

Some fairly solid results and much better than 5p EPS consensus. Still optimistic about this one, but they need to break-out of their current low growth phase by getting a banking licence.

[topvest] 05/8/2019 06:25

Great to have Gresham House and Chris Mills as shareholders. Obviously a lemming institution baling out. Bodes well as I respect these two new holders: they are good at spotting value.

[topvest] 30/7/2019 19:28

A shareholder has baled out at 70p today with over 3m dumped. Doesn't bode particularly well, but maybe just a bored institutional investor clearing out losers at any cost. Not long until we get an update I suppose. It's been slow progress here unfortunately, but could still eventually come good.

[topvest] 15/2/2019 19:55

Yes, I was thinking the same. Looks like someone selling a few. I'm sitting tight.

[asagi] 15/2/2019 08:38

why has this sold off so hard last couple of sessions? Bored holders?

Asagi (no position)

[topvest] 13/11/2018 08:08

Results a tad disappointing. £290k single bad debt due to a fraud at a customer appears to have taken the edge off the numbers. Results in line with expectation, but would have been well ahead without this. Banking license delayed until Q1. Hopefully, 2018/19 will be better. Still a growth company, but slow growth at this stage.

[topvest] 29/8/2018 07:41

Trading update is OK then albeit I would question whether 8.5-9% growth is significantly higher than last year. Nice little company though and happy to hold. Markets appear to be more competitive, but seems to be run by an intelligent fanatic.

Quite liked this bit......"During the year we have also developed market leading software to further enhance our product offering. We move into our new financial year with great confidence and fully expect to continue our growth trajectory. The banking application process is going according to plan and we remain hopeful of receiving the bank licence by the end of this calendar year."

[topvest] 10/8/2018 12:05

Today's drop is due to someone selling just 5k shares. Not much volume here is there. Anyway, lets see what the trading update shows.

[topvest] 18/11/2017 07:45

All looks positive here now nearly 18m from the profit warning. Should triple its loan book over the next 3 years. Run by an Intelligent Fanatic. Sensible business strategy. Forecasts look readily achievable and may be beaten as they were in FY17. Looks like they have probably learnt their lesson and are now having cautious forecasts. Market cap only £22m so capacity to add material shareholder value. Book value about 62p so not a frothy valuation. May consider adding more on a pull-back. Only negative is that returns are steady and not stellar with returns on equity only about 10% at this stage. That being said its low risk lending given they have never had a default. Another big positive is that there is virtually no posting on this Billboard!

Two other thoughts. The new Chairman looks a real win for Orchard as a background of Secure Trust and Arbuthnot is nice to see, so he is a successful banker. Bodes well. Then a comment on what one of the big 2 has to say on their market...

Interestingly this is what Close Brothers say about Premium Finance in their Annual Report. "The Retail Finance loan book grew 8% to £2.7 billion (31 July 2016: £2.5 billion). Premium finance accounted for most of this increase with new broker wins, increasing volumes from existing brokers and premium inflation all contributing to loan book growth of 17% to £0.9 billion (31 July 2016: £0.8 billion). Premium finance continues to be well positioned competitively, benefiting from the multi-year investment programme in its infrastructure aimed at improving both broker and end customer experience."

[wjccghcc] 19/3/2017 20:37

I think it might be the direct premium finance product from Bexhill. They set it up a few years ago for brokers who wanted a third party rather than an in-house solution.

[topvest] 18/3/2017 11:56

Good to have some company. Quick question for you - the Direct Insurance segment which is growing massively. Is this the Orchard Lending Club platform or something else?

[wjccghcc] 16/3/2017 22:06

I just bought a few at 86p. Originally sold them at 105p when it was clear the original targets were a stretch. I use premium financing for my insurance policy and it is a convenient way of doing it, so hopefully these are nimble enough to outgrow the two market leaders.