History tells us that people drink more in tough times even if we don’t need it to survive although some would say we do! The company has struggled courtesy of their exposure to China however constructive repositioning of the business and a timely focus on higher-margin areas we believe has TWE well-positioned for the coming years. We like this $8bn global wine business and while it isn’t a standout cheap stock on an Est P/E of 24x, earnings have been depressed and potential year on year growth from current levels of 20% is very achievable.
For added spice, we think TWE is a very real takeover candidate for the likes of French luxury goods brand Pernod Ricard who would be eyeing the company’s assets with parts of the businesses candidates to be sold off – watch for alerts.
MM likes TWE around $11
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