1. Treasury Wine Estates (TWE)
Treasury Wine Estates has been clobbered by China/Australia challenges but that hasn’t stopped Peter from soaking up more of the stock. “This was an $18 stock before it came off the boil,” Peter said to a group of Switzer’s financial advice clients who are members of his Shareman’s Lounge. “Its price has halved yet it’s one of the best wine companies in the world,” he added.
Peter went on to say that “odd” things like this tariff and Covid came along but these things won’t last forever. “Will the business be good again?” he asked and a firm YES! was his response. “There is a suggestion that tariffs could be lifted in 6-9 months,” he said.
TWE has $1.3 billion of wines in this end of the market with a long shelf life, but $0.7 billion of wines that need to be consumed within two years, which is part of the concern that this wine may go off. But analysts still say the stock has 25% upside.
At the Shareman’s Lounge meet, Paul (Rickard) aligned with Peter. “TWE will develop new markets, he said. “And if it stays cheap, someone will buy it,” he added in support of TWE’s plan to combat the China impasse. “ And it has had challenges in the US where it fell from fame there but the currency was high,”
TWE has a great stable of wines, owning Penfold’s (including Grange!), many of the high-end wines like St Henri, Bin 389, as well as other strong brands like Wolf Blass, Seppelts, Lindemans, Rosemount Estate etc. These make good drinking and according to our duo the stock could be worth tasting or topping up on.
TWE
2. MEGAPORT (MP1)
Peter also likes Megaport, a ‘cloud’ company that has the same founder as NextDC and many other IT companies – Bevan Slattery. “Its share price has been on the slide and probably won’t move any time soon. But it’s like NextDC in terms of being a company of the future and it’s in a space where there aren’t many competitors,” Peter said.
When Peter interviewed Slattery recently he said that not one big telco in the world has done well in the cloud because they don’t want to share with any of their rivals! Hence Megaport’s lack of competitors.
Megaport allows anyone to increase their capacity without having to lock into a big carrier e.g. during retail sales period like Black Friday or Christmas. Also the high demand for photos on mobile phones is growing and these are cloud stored. “It’s a volatile stock,” Peter said. “This reopening trade rotation explains some of its volatility as lots of tech stocks lost friends as other stocks gained support because they will do well as the world becomes normal,” he added.
You can watch Peter’s interview with Bevan Slattery here [1].
MP1
3. PUSHPAY (PPH)
This company has most of its revenue coming out of the US because a lot of churches there have tithing operating. It has done really well out of that. The analysts think it has 154% upside. Both Tony Featherstone and James Dunn have recently nominated it. Peter thinks the company has potential but accepts it’s in the speculative stock space.
PPH
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