As equity markets navigate uncertain economic conditions, a global monetary easing cycle, and significant shifts in global positioning, opportunities are emerging across the ASX200.
WAM Leaders’ Senior Investment Analyst Anna Milne and Investment Analyst Hailey Kim discuss two of their favoured holdings in the investment portfolio.
Anna highlights Spark New Zealand (ASX: SPK) while Hailey spotlights Amcor (ASX: AMC), both citing strong potential for earnings growth and valuation upside.
To hear more on the team’s current large cap stock picks, watch the latest video here.
Spark New Zealand
Spark Infrastructure is to New Zealanders what Telstra (ASX: TLS) is to Australians. It’s the leading New Zealand telecommunications provider, with 44% mobile market share, 34% broadband market share and a significant 118-megawatt data centre development pipeline.
Operational performance has been softer than the market expected, due to New Zealand’s recession as well as reduced Government technology spending. In our view, both these factors are temporary and combined with the cost reductions announced, we expect earnings are close to bottoming and should recover from here.
With the share price trading at decade lows, we believe the headwinds are more than factored in by the market. This is an opportunity to buy a high-quality business at a depressed valuation.
Amcor
Amcor is a leading global packaging company, providing flexible and rigid packaging solutions across a wide range of industries, including food, beverages, and healthcare.
After facing a challenging period due to businesses reducing their levels of inventory amid slowing end-market demand, we believe the company has turned a corner.
The majority of Amcor’s portfolio is now back to growth, and the new Chief Executive Officer has a strong operational track record with the company. Amcor is well positioned to capture additional market share, expand its margins, and continue its strategy of acquiring companies to complement or expand its existing business.
To hear more of the WAM Leaders team’s current stock picks watch the latest episode of Talking Stocks here.
