Packaging stock ORA fell 6.75% on Monday, the most in 7 months on large trading volume. The issue: bottles and cans manufacturer ORA operates a factory in Mexico that supplies tequila makers selling into the US. An Orora spokeswoman said this factory accounted for less than 5% of its revenues, adding it was “working through the implications” of the new trade restrictions. In FY24 the company generated over 60% of its revenue in the US, not ideal in these uncertain times although $US earnings are one beneficiary of Trumps actions at this stage due to the weak Aussie.
- We see no reason to chase ORA but value is presenting itself into weakness and remember last August Lone Star Fund XII Acquisitions attempted to takeover the company at $2.55, another rejected takeover that sees shareholders worse off in the short term.
MM is neutral to bullish towards ORA
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