Morgans Best Ideas: November 2020
About the author:
- Author name:
- By Andrew Tang
- Job title:
- Analyst - Equity Strategy
- Date posted:
- 03 November 2020, 8:30 AM
- Sectors Covered:
- Equity Strategy and Quant
Our refreshed Morgans Best ideas list highlights standout opportunities following the FY20 reporting season. These stocks represent our most preferred sector exposures and companies that offer the highest risk-adjusted returns over a 12-month timeframe.
We add Jumbo Interactive (JIN) and Regis Resources (RRL) this month.
We remove Coca-Cola Amatil (CCL) following the takeover offer from Coca-Cola European Partners.
Looking for more on the Coca-Cola Amatil (CCL) takeover?
After strong material growth and Cashflow in June, followed by the announcement of a dividend in August, Morgans Senior Food and Beverage Analyst Belinda Moore upgraded the Australian division of Coca-Cola, Coca-Cola Amatil's (ASX:CCL) price target evaluation from $8.93 to $10.39.
Such strength in earnings recovery, amidst a crisis saw Coca-Cola European Partners (CCEP) recognise an opportunity for a potential TAKEOVER. The European business made a non-binding proposal via a scheme of arrangements, to acquire 100% of the shares in CCL from independent shareholders for cash consideration of A$12.75 per share.
The Eurpean Partners offer continues a trend of consolidation among the Coca-Cola bottlers given the synergies and geographic diversification benefits. The takeover would broaden the CCEP's operations beyond the Eurpoean operations in Australia, New Zealand, Indonesia, PNG, Fiji and Samoa.
Coca-Cola European Partners is the world’s largest Coca-Cola bottler by revenue, with 48 bottling sites across key European nations including Germany, Spain and Great Britain. Coca-Cola European Partners was created from the three-way merger of Coca-Cola Enterprises, Coca-Cola Iberian Partners and Germany’s Coca-Cola in 2015.
CCEP has a market cap of A$25bn (pre-takeover).
Interestingly, the current proposal also follows CCL receiving a ‘number of previous proposals’ from CCEP – suggesting our previous August analysis of CCL was absolutely correct.
For further information, Morgans clients can read our latest Coca-Cola Amatil (CCL) research report here.
View our Best Ideas list for November 2020
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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
Disclosure of interest: Morgans may from time to time hold an interest in any security referred to in this report and may, as principal or agent, sell such interests. Morgans may previously have acted as manager or co-manager of a public offering of any such securities. Morgans affiliates may provide or have provided banking services or corporate finance to the companies referred to in the report. The knowledge of affiliates concerning such services may not be reflected in this report. Morgans advises that it may earn brokerage, commissions, fees or other benefits and advantages, direct or indirect, in connection with the making of a recommendation or a dealing by a client in these securities. Some or all of Morgans Authorised Representatives may be remunerated wholly or partly by way of commission.