Saw this in my daily from Macca's - thought you might be interested
Southcorp (SRP) $4.63
Short term Hold, long term Buy, risk factor Low/Medium
Southcorp yesterday released AC Nielsen data for the Australian, US and UK markets and its major wine brands within those regions. The Australian data is new information and highlights that the market is growing strongly and, for the previous quarter, at a faster rate than last year. Southcorp has underperformed the market over the last 12 months but has achieved a significant turnaround in the quarter, more than doubling the 12% growth of the market. The data includes sales for Coles and Woolworths and the turnaround has been due to increased business with these major retailers. This suggests the growth has come at the cost of higher promotional spend, a shift in mix to lower $/case brands and possibly some discounting activity. The US and UK data are less reliable estimates of shipment growth in the first half given long lead times between shipment and subsequent sale to consumers due to time spent on the water and in customs (and the distribution network in the US) of approximately 10 weeks.
We maintain our short term Hold, long term Buy for Southcorp and our valuation of $6.42 per share.
