Orbital Corporation Limited (OEC) - LONG

21 déc. 2020

OEC

Orbital Corporation Limited (OEC) - LONG

Orbital Corporation engages in the design, manufacture, and sale of unmanned aerial vehicle (UAV) propulsion systems and flight critical components in Australia and the United States. It also focuses on the manufacture, assembly, and delivery of engines and propulsion systems for unmanned aerial vehicles.

Technicals:
OEC has been basing since July into a nice pennant pattern with a suspected move imminent on tight volume. It had a strong bounce off the 50% over this period indicating strength. It offers a great RRR because of these decent support levels and TL support, with some possible fantastic upside. Trading a BO of the pennant through R1 & R2 around $1.185 would look favorable.
A break below $1.11 would render this trade void for me.

Fundamentals:
Orbital’s intellectual property which helps the UAV fuel burn cleaner and create less contaminants to clog up their engines is really cool. They're targeting militaries which require higher reliability and functionality. OEC had a total return of 224.6% over the past year which would have left most Orbital Corporation Limited shareholders smiling. It completely outperformed the Aerospace & Defense industry which returned -21.4% over the past year; aswell as the Australian market. It’s board of directors have a 3.5 years average tenure which is considered experienced, and they have managed to reduce the debt to equity ratio from 77.4% to 47.6% over the past 5 years. Their debt is very well covered by their operating cash flow (43.3%) and their short term assets (A24.8M) exceed their long term liabilities (A6.8).
OEC’s earnings growth 59.9% per year is above the savings rate @ 2%, and their earnings are expected to grow significantly with revenues growing faster than that of the average in the Australian market at over 20%.

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