Orica

Orica is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

ORI expects FY20 EBIT to be around $600mn which represents a 10% fall on the same time last year.

The full-year results will be announced on 20 Nov.

Orica – Valuation Review

Orica is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

FY21 revenue is likely to remain flat at $5.8bn and EBIT is forecast to increase 3-5% to $630mn. This supports a forward yield of 2.8%.

Earnings are likely to be well supported due to higher volumes and the strength in the mining industry, especially from the gold mining market.

Earnings may surprise to the upside and we continue to hold ORI into the next earnings release.

Orica – Buy Signal

Orica is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

Goldman Sachs raised $500 million in acquisition funding for ORI via an institutional placement.

The funds will be used for the acquisition of Exsa, Peru’s No. 1 manufacturer and distributor of industrial explosives and provide greater balance sheet flexibility.

We see strong buying support at $20.

 

Algo Update – Orica Short

Last week on the blog we looked at the short signal on Orica leading into their earnings result.

1H18 earnings were announced yesterday and they disappointed, with a 37% drop on the same time last year.

NPAT of $124m where as consensus was looking for $149m.

The share price dropped over 5% and reached an intra-day low of $18.70 before recovering to $19.00.

This was a very popular “short” CFD trade on our SAXO Go trading platform;  we suggest taking profits on the short ORI position near the $19.00 area.

 

Orica

 

 

Short Orica

We recommend the short side of Orica heading into 2H18 earnings announcement on 7th May.

The market is looking for significantly stronger 2H performance and is likely to be disappointed. Orica is trading on stretched valuations and offers a 2.6% forward yield.

Look to sell within the range displayed below.

Orica

 

 

Orica Slips On Lower Earnings

Orica Limited has reported that their 1H17 net profits after tax was $195 million, which beat the expectations of $185 million.

However, ORI shares are down close to 2% at $18.26 as revenues fell and guidance on key Ammonium-Nitrate prices are pointing lower.

An oversupply of Ammonium-Nitrate will likely act as a drag against future earnings and cap the share price below $19.25.