Following on from my previous post on Galleon Holdings (GON), I thought I’d share another company that I’ve been following.
Orchid Developments Group Limited (LON:OCH) are a company with property interests in Bulgaria. Â I’d been following their progress for a while and just lately they’ve had a hard time financially. The short story is that during 2012 the price has dropped from around 11 pence to around 2 pence, and at the beginning of this week when the official news stories were released regarding a court case that they lost, the share price took nose dive and is now sitting at around 1.3 pence.
Why does this look like an interesting proposition? Â Well it does and it doesn’t. Â There’s every chance that Orchid could never recover and any shares bought could be lost, however…
The company has no money, yes, but it does have assets and promises from the directors of further investment to keep the business afloat. Â One asset in particular is a shopping mall in Varna (pictured), which is now fully occupied, and some other reasonably valuable interests. Â Based on this, the shares have a potential 30p value.
The other mentionable prospect is that the company could get bought out, which could result in quite a substantial rise in share price leading up to, and following, any potential takeover.
Bearing in mind this is an incredibly brief overview of Orchid, I think it could be a stock to watch. As with any share on the AIM, I only invest what I’m prepared to lose, but with this one I’m only using a small percentage of my portfolio; it’s pretty high risk.
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