Greg Gal­ton Pater­sons

The Sunday Times - - BUSINESS -

BUY APA Group (APA) $8.88 With the CKI con­sor­tium’s bid for APA re­jected on “na­tional in­ter­est” grounds, the APA share price has come back to where it rep­re­sents an at­trac­tive op­por­tu­nity for in­vestors. APA owns and op­er­ates an ex­cel­lent port­fo­lio of long-life gas in­fra­struc­ture as­sets with de­fen­sive rev­enue. At cur­rent lev­els, it of­fers a mostly un­franked 5.3 per cent dis­tri­bu­tion yield, with good or­ganic growth po­ten­tial from the ris­ing de­mand for LNG. We would not be sur­prised to see an­other bid from in­sti­tu­tional in­fra­struc­ture in­vestors. BUY Trea­sury Wine Es­tates (TWE) $15.34 Trea­sury Wine Es­tates is lever­aged to the ris­ing wine con­sump­tion trends in Asia, par­tic­u­larly China, given the fo­cus on lux­ury and mid-range wine, and should con­tinue grow­ing at high rates. While to­tal global wine con­sump­tion has proved slug­gish, high-priced wines have bucked this trend, grow­ing at mid to high sin­gle-digit rates in de­vel­oped re­gions, such as Aus­tralia and the US. Trea­sury’s fo­cus on higher-priced wine puts it on trend in global wine, and should drive sub­stan­tial earn­ings growth as prof­itabil­ity ex­pands.

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