Spark – Valuation Review

Spark Infrastructure is under Algo Engine buy conditions following the higher low support at $2.10.

1H20 earnings delivered slightly better growth than expected with full-year DPS guidance unchanged at $0.135. EBITDA increased 4% to $430m.

Cash flow was weaker than expected and we see slight downside pressure on the dividend in FY21 & FY22.

Spark Infrastructure – Algo Buy Signal

Spark Infrastructure is under Algo Engine buy conditions following the higher low formation at $2.20.

Spark Infrastructure has a long history of owning and investing in essential service infrastructure. Their networks deliver electricity to more than 5 million  Australian homes and businesses.

This enters our radar and we’ll continue to review the earnings outlook and business fundamentals.



APA & SKI attract buying interest

Following the recent takeover offer for APA at $11 per share, (subject to FIRB review), we  see a reasonable risk/reward opportunity to buy both APA and SKI.

A soft backdrop for global bond yields should provide downside protection as investors seek out defensive yield opportunities. Added upside exists in APA if the takeover is given the green light by regulators.

APA Group

Spark Infrastructure (SKI)





APA Takeover Offer – 30% Premium

APA received a non-binding takeover offer at $11 per share, implying a
value of almost 15x earnings.

 APA has granted access to due diligence and the offer will remain subject to regulatory approval from FIRB.

With the share price trading below the takeover offer, we’ll be weighing up the arbitrage opportunity in the week ahead.

We feel other stocks within the infrastructure sector will continue to get a boost from takeover interest and medium term support from the bond market’s tepid outlook.

One example we’re attracted to within this theme is Spark Infrastructure.