S&P/ASX 200 Index (ASX: XJO) shares are often the leader in Australia or the local region – we can find compelling businesses on the ASX. But, we just need to buy them at the right price.
Banks like Commonwealth Bank of Australia (ASX: CBA) and miners such as BHP Group Ltd (ASX: BHP) often get all of the attention, but every other business is capable of producing good returns. Experts have revealed why the below two ASX 200 shares are buys.
Worley Ltd (ASX: WOR)
Worley describes itself as a global professional services company of energy, chemicals and resources experts. It partners with customers to "deliver projects and create value over the life of their assets." Worley says:
We're bridging two worlds, moving towards more sustainable energy sources, while helping to provide the energy, chemicals and resources needed now.
Writing on The Bull, Toby Grimm from Baker Young said recent Worley share price weakness (see below) presents an opportunity to buy a quality engineering services company at "attractive levels".
Grimm pointed out that major shareholder Sidara, formerly Dar Group, recently sold 19% of the ASX 200 share. The underwritten block trade ends an "extensive and potential takeover play". The expert noted the transaction doesn't impact Worley's operations or valuation.
The ASX 200 share continues to generate growth – the FY24 first-half result saw aggregated revenue increase 22% to $5.6 million and underlying net profit after tax (NPATA) grow 30% to $188 million.
Treasury Wine Estates Ltd (ASX: TWE)
Treasury Wine Estates describes itself as one of the world's largest wine companies, with 11,300 hectares and winemaking facilities in the world's leading wine regions. Its products are consumed in over 70 countries. It has a number of brands, including Penfolds, Wolf Blass, Blossom Hill, Pepperjack, Squealing Pig and DAOU Vineyards.
Jed Richards from Shaw and Partners calls Treasury Wine Estates a buy following the removal of Chinese tariffs on imported Australian wine. Richards notes the iconic Penfolds brand "remains prominent in China". He then said:
As the world's second largest economy, China is a most attractive market for TWE, enabling this wine giant to diversify its revenue base moving forward. Share price weakness provides an attractive entry point.
The ASX 200 share is reallocating a portion of the Penfolds Bin and Icon tiers from other global markets to progressively re-build distribution to China while maintaining the "strong momentum in those other markets where Penfolds has successfully grown in recent years." It intends to expand its sales, marketing resources and brand investment in China.
Thanks to the removal of Chinese tariffs, demand for the Penfolds bin and Icon portfolio is expected to exceed availability in the short term, so it will implement price increases, which are expected to be effective from early FY25.
