Treasury Wine Estates Ltd (ASX: TWE) shares are up 58% during the last 12 months and currently trading on a trailing P/E of 45x. Treasury has vineyards in Australia, New Zealand, Italy and the United States – exporting its wines to more than 70 countries around the world.
Exports to China are material to the company’s growing success, with management expecting to add new customers and reduce lead times through supply chain improvements in FY2018. For FY2017, Treasury’s earnings rose 55% on the previous financial period.
Carsales.com Ltd (ASX: CAR) shares are trading near their 52-week high, rising 43% from its yearly low in February. Carsales lets you trade cars, trucks, motorcycles and other vehicles and machinery primarily through its online network in Australia, but also has operations in parts of Latin America and Asia.
In late November, Carsales announced it would purchase the remaining 50.1% of South Korea’s top online automotive classifieds business, Encar.com. The move will give Carsales 100% ownership and is expected to cost approximately $244 million.
Insurance Australia Group Ltd (ASX: IAG) is a general insurer with core operations in Australia and New Zealand. The company’s share price has increased 23% over the course of the past 12 months and currently trades on a trailing P/E of 19x.
In mid-2015, Warren Buffett’s Berkshire Hathaway entered into a long-term strategic relationship with IAG and paid $500 million for an approximate 3.7% stake in the Australian insurer.
A key part of the insurance business is investing. Insurance premiums paid by customers are invested by the insurer, which earns a greater rate of return under a high interest rate environment. With interest rates at record lows in Australia and expected to eventually rise, IAG believes it can deliver 10% compound annual growth in earnings over the next 3-5 years.
Challenger Ltd (ASX: CGF) is an investment firm benefitting from the growing popularity of annuities. Challenger’s assets under management grew 17% in FY2017 and the firm had a positive start to FY2018, driving its share price almost 30% higher over 12 months.
Challenger is partnering with some of Australia’s largest financial services firms to raise annuity sales and expects to increase pre-tax earnings by 8%-12% in FY2018.
Ansell Limited’s (ASX: ANN) share price hasn’t moved much from where it was a year ago, but is still trading near its 52-week highs. The protective gloves manufacturer is up 20% though from its lows in August and there appears to be some uncertainty in the market as to what the company is worth.
The uncertainty is likely related to the recent US$600 million sale of its sexual wellness division and the fact that the company is undergoing a major transformation program to enhance growth and improve return on capital. Ansell is also buying back up to 29.465 million of its ordinary shares which equates to around 20% of the company float.
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Motley Fool contributor Ian Crane has no financial interest in any company mentioned. The Motley Fool Australia owns shares of Challenger Limited and Insurance Australia Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.