ORG value, page-32

ORG was one of the stocks I had a look at when the oil price crashed. I checked out sto, org, wpl, bhp, osh and some smaller players like sxy. I steered clear of org due to their high debt levels and low return on equity, ended up going with wpl thus far, though I'm not convinced about their osh takeover attempt.

Even post cap raising the debt levels of org would be on the borderline of high risk imo. However combined with their other cash preservation initiatives org should be able to survive this oil bear market. Starting to get tempted, not because it is a good company, but as a balance sheet medium term trade. I put their post cap raising net assets per share at $8.77. Probably need to allow for some more write offs, so have assumed a $7 future net assets per share. When the oil price turns I would expect org to trade at least at its book value, so keeping an eye on an entry point now. I still consider it medium to high risk so will only enter if it goes below $5, which I think is possible.

I do feel for shareholders who have been burnt with this one.