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#PriceAction
Last edited 2 months ago

ORG - 10th Feb 2021 trading  day with 20m volume seems to also include 5m Shorts being closed

Just going back over the price swings in the last week or so and according to Shortman there were 5m fewer short positions over ORG compared to the prior day which was 14m short positions.

So the close price around $4.36 seems to have found some sentiment as being "a good low" by roughly 1/3 of those open posiitons.

It's a bit of a pattern being noticed across a few stocks of late.

 

 

 

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#Financials
Added 2 months ago

ORG - Expected Dividend Yield 4.7% (Unfranked for several years)

On the back of anticipated FY2021 net Interest Savings of $60m - $70m, the following dot points are made in the Half Yearly report:

 

  • Unfranked dividend of 12.5 cps determined
  • 34% of Free Cash Flow and annualised dividend yield of 4.7%1
  • Insufficient franking credits due to high 2020 tax deductions from Browse accelerated amortisation and realised FX losses.
  • Several years before franking restored
  • Going forward, Board continues to target 30-50% Free Cash Flow payout, and will consider a combination of dividends and/or on-market share buybacks

so a goal to return 30%-50% of Free Cash Flow back to investors, interestingly which may include on-market share buybacks too.

 

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#Top20
Last edited 2 months ago

Top20 - to further expand upon @Bear77's explanation of those Direct invest Options under the banner of Australian Super (and others) for example

Absolutely those are valid point made by @Bear77 the main point I took away from them was that not all that appears as "Smart Money" flows are initiated by professional Institutional Investors, and yes that is the case for these Direct invest offerrings

I would say though, that these are still money flows into the stocks (or out of as appears to be the case with JIN) that eventuate into the overall holdings as reported.

And couldn't agree more, that the second level assessment of Top 20 is also to take a look into the "Skin in Game" level of management and board memmbers as Insiders.

But in the interest of explaining these Direct Invest options that exist in large super funds like Australian Super and QSuper which is experience,   is that this platform is one offered by UBS and is simply "Branded" by those super funds.

Refer to below screen grab, being QSuper and specifically for Origin too.   If you have this feature enabled for Australian Super you will see exactly the same look and feel trading platform, and you will also see EXACTLY the same UBS recommendations for stocks with BUY / SELL / HOLD and price targets where relevant.

The platforms also enfocre (much like StrawMan paper trading) that only maximum %s of your portfolio can be allocated into a single stock and yes that may be only an ASX200 participant too.

So my slant on it is, yes maybe retail investors may be taking positions larger than and or holding them longer than a nimble Institutional Investor may themselves be, but I'd like to give credit to those people retail people making their decisions that they are still doing so under the broad recommendations that exist throughout the platform and are published by UBS.

So maybe best to think of those money flows as "smart influenced money" rather than "smart money" specifically as such.

But some fantastic points raised by @Bear77 and hopefully some further insight into those Direct Platforms and what they really are in terms of a turn key offerring for these large Super Funds.

Currenlty the attachment below of the platform is showing both Aus Super and QSuper (and whoever else Super that has signed up to it)  that ORG is a BUY for Price Target of $5.75

 

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#Bull Case
Added 2 months ago

ORG - and Electricity sector

I don't know why I hadn't connected these dots previoulsy, but it was just mentioned during a segment on Ausbiz TV that the whole shift towards Electric Vehicles is a bullish thing for the electricity market.

The other theme of that conversation was that even for a bit more traditionally structured energy players the whole pivot out of olders fuel sources to generate electricity is going to take al lot longer to convert across to clean sources of electricity production with the demand for electricity remaining strong and likely to have a new source of demand.

That thinking certainly resonates with me now I've heard it put that way.

 

 

 

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#Top20
Added 2 months ago

14-Feb-2021:  Just to add to @Scherobi's "Top20" straw on ORG, AustralianSuper has been Australia's largest industry super fund for some years, and now claim to be Australia's largest super fund (of any type).  They have an option for their members called "Member Direct" where you can invest up to 80% of your superannuation balance in a range of ASX300 companies and/or in a range of ETFs, which you can choose yourself.  It's basically a SMSF (self-managed super fund) option, without the compliance headaches, because AustralianSuper look after all of the compliance, paperwork, reports, and tax for you.  They charge a little more for that option than they do for their managed options, but they are still very competitive compared to non-industry funds or traditional SMSFs. 

A growing number of AS members use that "Member Direct" option.  I did, when I was an AustralianSuper member.  I managed to grow my account balance at a good clip for a few years, then rolled that entire balance into my second industry super fund, Cbus, after Cbus started to offer a similar service which they call "Cbus Self Managed" - and I now have only one super fund - so no longer use AustralianSuper.

The point however is that the reason for the regular changes in the substantial holdings of companies by large industry funds like AustralianSuper is purely down to the movements within their individual members' "Member Direct" portfolios, so whenever there is a net movement of -1% or +1% across the entire AS membership, AS is required to lodge a notice to notify of the change.  This does not reflect that AustralianSuper themselves are more or less bearish or bullish on the company (in this case, on ORG), just that enough members had either added more ORG or sold down ORG to warrant a change notification.

Outside of that "MemberDirect" option (where members are choosing themselves exactly which companies they want to hold within their own super portfolio), AustralianSuper have around 170 in-house investment professionals working for them, and they also use external well-respected fund managers to manage some of their other investment options, such as their "conservative", "balanced", or "growth" options. 

Sometimes when you view a "Top20" list, it's hard to work out whose money is ultimately being represented by the names you see.  For instance, when you see HSBC or Citicorp popping up across the Top 20, it's not always clear who they are managing that exposure for.  Sometimes it is, sometimes it's not.  It's an interesting thing to monitor, but it's sometimes hard to draw much in the way of useful inferrences from the data.  I tend to focus more on what management and board members hold, and particularly whether they are reducing or increasing their exposure to the company.  With larger companies, those guys won't always make the top 20 list, but all board members have to lodge notifications of their holdings, no matter how small.  Also, watch out for directors or management who are only increasing their exposure via free shares or vested options, rather than buying shares on-market - at market prices.  On-market purchases are the things I look out for the most.

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#Top20
Added 2 months ago

ORG - Getting to know your Top 20

Straight off the bat I have to say I have never reviewed a YoY comparison of Top20s with such little movement in the composition of that list.

In a word "Super" (pun intended) because I had to form the conclusion that what we see here in the Top20 holders is a list of who's who of fund mangers who IMO are channelling superannuation contributions into this behemoth of a company as a bit of a steady investment with great dividends.

Some interesting observations of the list itself, 8 of the 20 holders from 2019 increased their holdings during 2020.  There were another 2 additional holders who maintained the size of theirholdings.  So 50% of the list same or better committment to the shares of the company.

There appears to only be 3 holders (although it looks like really 2 as HSBC holder is just a specific purpose nominee account by the looks of things) from 2019 who are not top 20 in 2020,  but I would expect they've simply slipped out of the list rather than having quite their positions (but that's only a guess on my part)

The Top20 have maintained a steady holding in excess of 70% of the issued shares, and there has not been any new shares issued via capital raisings etc

So at this point I think we need to blur the review a little bit given the nature of the participants and look at some of the headwind issues impacting both the company itself and funnily enough the Top20 constituents too over the period:

  • Bushfires - impacted company performance in some regards to discontinued services as a result of the fires themselves until able to be restored
  • COVID lockdowns - impacted the company performance with respects to lower than anticiated corporate electricity consumption
  • COVID early release of super ** - in my opinion the 2 x $10K pandemic eligible withdrawls from super accounts may in some degree have impacted the "smaller" constituents in the Top 20 list here, a bit of a theory but a smaller fund having a large rush on funds will take a longer time for future constributions to square things off and/or may even have had to (as it appears) sell down their holdings to meet those $10K withdrawl requests.  We dont really know but the thing is there are 4 of the top 6 holders who cumulatively dont come close to #2 or #1 holder in size of shares held.
  • we still have the pandemic impacting some parts of Australia getting back to 100% work at work arrangements as a bit of a headwind to Corporate Electricity consumption
  • we still have large numbers of people out of work on Jobseeker arrangements who it is fair to say would not be making super contributions at this point in time.

All in all I think as a comparison as at September 2020 this list represents quite a positive story.  But given the recent Dec 2020 Quarterly Activitiy report with some downward guidance from the Company, the Annual Report 2021 will itself be quite interesting too and given there are so few Substantial Holders >5% we have no visibility from market announcements to look to for clues before then.

 

The few Substantial Holder reports there are include:

  • 10th Feb 2021 - Australian Super increasing up to 10.43%
  • 27th Jan 2021 - Australian Super increasing up to 9.39%
  • 25th Sep 2020  -Australian Super increasing to 8.39%

To my understanding with Original Energy being both profitable and dividend paying with quite reasonable yields I beleive this Company will remain quite attractive for these already large Top20 shareholders when things return to "normal"

please DYOR and confirm or otherswise, I guess there's a bit more of thesis in this review of the Top20 activity by the nature of the list itself.

 

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#Company Updates
stale
Added one year ago
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