Flagged this one up on another board thread the other day and said it was one to watch very carefully. It more or less as a momnopoly position within the growing IPTV market. It has a good management, is moving into a profit making company , now has positive cash flow and has around 13 million cash in the bank, enjoys margins of around 80% yes 80% and works with some of the biggest Tech companys on the planet.

Contracts should be announced very soon which should lead to a pushing of the price upwards. The spread is an off puter but you can normally deal within side it. Citywire have tipped this one so I will post their findings below.

DYOR

Orca could be a whale of an opportunity

By: Joanne Wallen, Associate Editor Citywire 3/02/2005



Orca Interactive is off to a good start as a separate company having spun off from Emblaze in October and with the might of HP and now IBM behind it, Orca should be a force to be reckoned with.

Shares (ORCA) in the AIM-listed company are unchanged at 126.5p today, well above the 93p flotation price and valuing the business at 43.2 million.

The Israel-based company, which states its earnings in US dollars, saw revenues for the year to December grow by 106% to $5.2 million while losses decreased to $1.8 million (953,000) from $4.9 million. The company had $24.5 million of cash on the balance sheet.

Orca offers a complete suite of applications to fixed line telecoms companies, enabling them to offer television services over their telephone networks (IPTV). The software covers everything from the user interface (every click on a remote control), to integration with a telcos back-end billing and customer interface systems.

IPTV is just starting to take off as telecoms operators upgrade their networks to IP (internet protocol) or data networks. The telcos, losing out from declining voice revenues and competition from the cable operators, are now looking to offer services such as video on demand and full broadcast television over their networks.

Orca has already announced relationships with Hewlett-Packard, Lucent, Nortel, Nokia and Siemens, and today added IBM to the list. These companies will resell its software and act as systems integrators.

Chief executive Haggai Barel told Citywire he expected to be able to announce deals with these partners very soon. At present, Orca still has to provide a considerable amount of professional services to customers, but in the longer term Barel hopes that its partners will provide all of this and Orca will revert to being a pure software players, with margins to match. Gross margins are already nearly 80%.

The companys main competition comes from Alcatel, which has its own software but is also looking to be the systems integrator for that software. This is likely to inhibit any of the major systems integrators from dealing with it, and leaves the rest of the market open for Orca.

Citywire Verdict:
It is clearly still early days, but Orca is in there ready for what looks like being an explosion in IPTV. Few network operators will have a choice. They will have to compete for customers television and internet business, or lose out in a big way.

The fact that the two major competing hardware manufacturers and systems integrators, IBM and HP, have chosen to work with Orca sounds like very compelling endorsement both of the technology, and of the fact that there are few viable competitors out there. Well worth a punt for those that like the risks inherent with IT stocks.

cheers GF.

Now up 5p and on a break up.

cheers GF.

How can you be so confident when the moving averages look so strange?Has anyone given a medium term price target for this one?

No on both counts ethel. Its got a fantastic customer base and contracts /deals are due anytime. Its in a market dominating position with little if any competition and growth is quite staggering. The early bird catches the worm.

cheers GF.

Nice rise today puts me comfortable in profit. All this rise with no news, I guess there must be strong rumours going on in the background. I wouldn't be surprised to see the MMs shaking the tree in the next few days.

Doug

Bit early for that dont you think dclinton?

Not sure. The price is up on not a lot of volume (161,000 today) which suggest the MMs know something is going on. If contracts are soon to be announced, then I would expect them to shake out some of the more jittery investors soon beforehand.

Of course, this is all just a guessing game in the end. The whole MM system is quite ropey. Roll on electronic trading books for all stocks.

One day.

Doug

Onwards and upwards I say, LOL.

cheers GF.

Just ticked up, NICE.

cheers GF.

Up 15% in a week. That's the kind of share we like.

Another move up, really hot at the moment this one, dont forget 80% margins and 13 million cash on the books, super.

cheers GF.

This year is going to be dominated by voice over IP (VOIP), but I think that IPTV is not going to be far behind. The growth of broadband should start to make this a truly viable proposition.

doug

Certainly will Doug and just look at the breakout on the chart.

SUPER.

cheers GF.

What's your target on this one GF?

Great tip pick GF. Glad i got in in time for the break out.

Good article in Shares mag yesterday too.

The skys the limit Chiva20, Ill let the market decide the target, Ive just added again.

Chad thanks for that I will get a copy hopefully tomorrow.

cheers GF.

Buyers still coming in, offer now up to 150p.

cheers GF.

Its been an excelent week for this one.

cheers GF.

Chad what did the article in shares mag basicaly say?. Run out at my local smiths.

cheers GF

GF. Basically good results and in a young niche market. "One to watch". One to buy I'd say and then watching it go up is much more fun.