ORG has enjoyed a strong rebound over the past 12 months, with the stock rallying from below $4 to almost $7. At their March investor day, ORG announced a $250m on-market buy-back which commenced this month with more likely to follow, the board also announced a strategic change to their operations which was focused on lowering their cost base, expanding products (internet via Aussie Broadband an example of this) and accelerating renewables & clean energy which combined with investments in batteries creates a big change in emissions.
This is a definite turnaround stock which is already getting noticed and on a projected P/E of 14.5x assuming the execute on point the stock can enjoy the combination of higher earnings and a re-rate of the multiple the market is prepared to pay for those earnings. Also helping the sector AGL was the focus of takeover attention from billionaire Mike Cannon-Brookes which never hurts, we like the stock into a pullback which might unfold if we see a bounce in tech i.e. a few weeks of “risk-on” could see some switching from traditional defensive names like AGL and ORG.
MM now likes ORG around $6.30-40, only 4-5% lower
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