Greg Galton Patersons
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.