MENU

Is Orion Health Group Ltd a blockbuster stock?

The Orion Health Group Ltd (ASX: OHE) share price traded mostly flat this morning despite the innovative health care technology business announcing a robust half-year report.

In the six months to 30 September 2015, Orion, a newly-listed New Zealand cloud information business, reported a 27% jump in revenue, to $104 million, and a loss after tax of $26.8 million.

Although nobody likes to see a loss, Orion announced a number of key operational highlights, invested heavily in research and development (R&D), and experienced growth in targeted overseas markets.

“We are continuing to invest in R&D to maximise the huge opportunity we have identified for Orion Health,” CEO Ian McCrae said. “Increasingly, the focus is moving from treating conditions, to treating individuals and when it does Orion Health will have the modern, scalable technology to deliver and enable it.”

In the North American market, Orion achieved a 37% rise in revenues and signed a number of big customers, such as the United States Department of Defense and state governments. Orion’s software now manages over 90 million patient records around the world.

The company reported a net operating cash outflow of $19.3 million for the period, compared to $13.5 million in the same period last year, but recurring revenues rose from 30% to 41%.

“We are really pleased with our progress in the first half of the financial year,” Mr McCrae added. “Our business is growing and new market segments are emerging that have a need for our scalable platform.”

Buy, Hold or Sell?

Much like XERO FPO NZ (ASX: XRO) and to a lesser extent Freelancer Ltd (ASX: FLN), Orion Health is a lightweight, scalable, information technology business in the making. It’s unprofitable, sure. And it’s burning through cash. However, if in 10 years Orion is still operational, and investing in itself like it does today, I’d be willing to bet it’s a much bigger and more profitable business than many expect it to be.

Unfortunately, a valuation of any of these types of stocks is very subjective. Therefore, investors considering buying Orion shares must first complete thorough qualitative due diligence. Nonetheless, it’s certainly worthy of a spot on your watchlist.

Ask yourself this question: Do you like BIG dividends? Of course you do!

Then you'll love what Scott Phillips, lead advisor of Motley Fool Share Advisor, has just announced as his #1 dividend stock of 2015-2016 - I think it is a GREAT BUY today! Best of all, for a limited time, Scott is giving away its name and stock code free in his brand-new investment report! Simply click here, enter your email address and we'll send you his report.

Motley Fool contributor Owen Raskiewicz owns shares of Xero.

Forget ANZ, I'd rather buy this dividend stock…

I'm not a buyer of ANZ shares today, but that's okay because Scott Phillips, lead advisor of Motley Fool Share Advisor, has just announced his #1 dividend stock of 2015-2016 – and I think it is a GREAT BUY today! Best of all, for a limited time, Scott is giving away its name and stock code free in his brand-new investment report! Simply click here, enter your email address and we'll send you his report.

 

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.