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Should You Investigate Origin Energy Limited (ASX:ORG) At AU$10.54?

From Yahoo! Finance

Should You Investigate Origin Energy Limited (ASX:ORG) At AU$10.54?

Let's talk about the popular Origin Energy Limited (ASX:ORG). The company's shares saw a decent share price growth of 11% on the ASX over the last few months. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's take a look at Origin Energy's outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Origin Energy

Great news for investors - Origin Energy is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is A$13.99, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What's more interesting is that, Origin Energy's share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Origin Energy, it is expected to deliver a negative earnings growth of -11%, which doesn't help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

Are you a shareholder? Although ORG is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to ORG, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you've been keeping an eye on ORG for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 3 warning signs for Origin Energy (1 can't be ignored!) and we strongly recommend you look at these before investing.

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