Packaging business ORA slipped -3% on Thursday; the stock has been under pressure since it raised $1.2bn to purchase bottle maker Saverglass in August when it issued shares at $2.70. We had the stock on our Hitlist for a while, for both the Income and Growth portfolios, but we remained patient as the capital raise played out. While we are now less optimistic about ORA from a growth perspective in the near term, we did buy it in the Income Portfolio ~$2.55 on the 16th of November, transitioning out of Wesfarmers (WES) at the time.
As we wrote in ‘The Match Out’ report, yesterday’s update was not negative per se, there was simply a belief in the market that they were talking down the Saverglass earnings during the acquisition process, providing a better opportunity for higher revisions post the purchase, but for now, that hasn’t happened. We see no reason to rush into ORA in today’s “risk on” market environment for growth investors, however, we do think the acquisition is a good one, and ORA is at or near a low point in its earnings cycle.
This is a stock in the ‘defensive’ camp that we continue to like and will look at for the growth portfolio as/when we de-risk the portfolio.
- We are adding ORA back onto our Growth Hitlist, having bought it recently for the Income Portfolio.
MM likes ORA as a defensive play ~$2.50
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