2 ASX shares ripe to buy at current prices: expert

With finance and mining dominating the S&P/ASX 200 Index (ASX: XJO), agriculture and related sectors hardly get a look in from investors.

But UBS Group AG (SWX: UBSG) just named a couple of such ASX shares among its “best ideas”.

Market Matters portfolio manager James Gerrish agree with UBS’ picks, so let’s take a look at why he rates them as buys at the moment:

You must be nuts to ignore this stock

Falling almond prices have punished the Select Harvests Limited (ASX: SHV) share price, to the tune of a 33% drop since September 2021.

The shares went into the Easter long weekend at $5.96.

Gerrish likes the risk-reward balance for the stock if you can pick it up for less than $6.

“As we know, agriculture is a very cyclical game, and low prices tend to work themselves out,” he said in his newsletter.

“Major almond growing regions in California are now in the grips of a tough drought, and while global supply chains remain an issue, improvement here would be a positive catalyst.”

UBS and Gerrish aren’t the only ones bullish on the almond grower.

According to CMC Markets, all four analysts surveyed rated Select Harvests shares as a “strong buy”.

You must be drunk to ignore this stock

What a crazy couple of years Treasury Wine Estates Ltd (ASX: TWE) has had.

Just as the share price was recovering from the March 2020 COVID-19 market crash, it was hit by a negative force beyond its control.

Australia challenged China to allow an independent study on the pandemic’s origins, and China retaliated with punitive trade tariffs.

It brought local businesses that export to the biggest market in the world to their knees.

Gerrish remembers it well.

“Treasury Wines has had its challenges over the past few years, largely a result of its reliance on the Chinese market that saw the company caught up in a diplomatic spat that quickly whipped ~60% off its share price.”

The company has since sought to diversify its geography, and the latest reporting season showed this was successful.

“In February, they reported improved trends, particularly in America — while their high margin, premium brand business did particularly well,” said Gerrish.

“Since then, the market has lost some interest. However, we think Treasury Wines will emerge from a difficult period with a stronger business overall that will enjoy better returns as the world gradually gets back to normal.”

The Treasury share price is now just 13% down from its pre-China crisis high.

It went into the Easter weekend at $11.10.

Gerrish likes it as a buy at around the $11 mark.

“While it doesn’t ‘scream value’ on an estimated P/E of 24x, earnings have been depressed and [year-on-year] growth from this new base of 20% is very achievable.”

The post 2 ASX shares ripe to buy at current prices: expert appeared first on The Motley Fool Australia.

More reading

• Top broker tips Treasury Wine share price to rise almost 25%
• Leading brokers name 3 ASX shares to buy today
• Why Boss Energy, GrainCorp, Pro Medicus, and Select Harvests are pushing higher
• Can the Treasury Wine share price have a better month in April?
• 3 more of the ‘best’ ASX 200 shares to buy this month: Morgans

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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