Origin – Breakout

Origin Energy has broken out of a prolonged downtrend as the negative earnings cycle appears to be nearing the bottom.

The market has low expectations for FY22 earnings with EBITDA down almost 40% on FY21 and DPS falling from $0.14 to $0.10 placing the stock on an expected yield of 2.2%.

We see upside for Origin and suggest a stop loss below the recent $3.87 low.

Origin Energy 1Q21 Production

Nat Gas prices continue to rebound from the historic lows reached mid this year.

Origin share price remains under selling pressure but is likely to soon find buying support.

Origin’s September quarter revenue of A$374m was down 39% from the prior quarter. Lower prices were in part offset by higher production volumes.

Origin Energy – Earnings Update

Origin Energy is a holding in our portfolio, based on the strong anticipated earnings coming from the group’s investment in the Australia Pacific LNG project.

The result announced today shows an increase in profit from the APLNG of 40% plus. Overall group earnings are ahead of market consensus at $1bn and the company declared a $0.15 dividend.




Origin Energy – Valuation Review

Origin Energy is under Algo Engine sell conditions, however, we see value emerging from a  fundamental analysis perspective. This should lead to a switch in the algo model from sell to buy in the near future.

The key positive is the strong cash generation from the APLNG project, which has led to the de-gearing of the company balance sheet. The next key driver will be the reinstatement  of the dividend policy which will have the stock trading on a forward yield of 4.5%.

We expect the future dividend payments to steadily increase, which will help support the share price.


Within the Energy sector we like Woodside Petroleum and Origin Energy as our preferred exposures.

WPL offers 5% franked dividend yield and when combined with a covered call option, we’re generating 10% cash flow whilst allowing for a moderate level of capital growth.

ORG offers appealing capital growth prospects as the company pays down debt and reinstates a more progressive dividend policy.

Strong oil prices and increasing LNG production numbers are tailwinds that are likely to continue for ORG. Capital expenditure is also tracking  lower than guidance and these factors combined are helping to add to group cash generation.


Origin Energy – Get Ready to Take Profit

Origin Energy is under Algo Engine sell conditions, however, we’ve been expecting stronger earnings to support another leg in the share price rally.

ORG reported its 1H19  with EBITDA of $1.73bn, which is ahead of market consensus. The dividend was reinstated at $0.10 per share.

We see the balance sheet improving which will lead to ongoing increases in the dividend. Based on FY20 earnings we have ORG now trading on a 5.5% yield.

We’re sellers “short term” on a push above $8.00 in ORG.


Earnings Calendar

Amcor reports on Monday, we expect the earnings result to support the  current share price rally. AMC has been a high conviction call, expressed on the blog and in the “Opportunities in Review webinar”.

Bendigo Bank, (BEN)  reports on Monday, we’re cautious of this name and see the money being made on the short side.

Origin Energy (ORG) reports next Friday, we feel the LNG related income will surprise on the upside.

For more detail on the earnings season, register for Monday’s Opportunities in Review webinar.





OZL and Origin Removed From The Model Portfolio

Over the last 24 hours, our ALGO engine has triggered sell signals for both Oz Minerals and Origin Energy. 

Both OZL and ORG have been longstanding components in our ASX model portfolio.

As illustrated in the summary below, ORG returned a respectable 30.93% over the 584 day holding period and OZL returned a whopping 144.21% gain, including dividends, since July of 2015.

Both of these names have been popular with investors and we’ll update with current ALGO signals in the near-term.

Oz Minerals

Origin Energy