scroll

Treasury Wine (TWE), Lynas (LYC) and Hybrids

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 09/08/2025

Treasury Wine (TWE), Lynas (LYC) and Hybrids

Hi Shawn Three brief questions in 1 if I may . 1. TWE wondering whether you could comment on the thought that TWE should be advantaged going forward by Trumps tariffs especially as they have a US domestic arm and Australian products will have a significant tariff advantage over other imports esp. European, -will this in your opinion lead to an improved performance in TWE from here? 2. Lynas are shooting the lights out at the moment; would this be a situation of "sell the strength" approach that you have been advocating for other stocks or better to enjoy the ride at this point ? 3. Following the maxim that there are no dumb questions - can you please clarify that when reading the hybrid chart that the score of "trading margin versus fair margin" should be interpreted as; the higher the figure ie .52% the lower the relative attractiveness of the value and vice versa- and would this be (all other things being equal ie: length of time to maturity and security of the backing company etc) be the main consideration when deciding in relative terms which one to purchase ? (In other words ..how to interpret these figures provided) Many thanks as always for your excellent product. Don

Answer

Hi Don,

Treasury Wine (TWE): We looked at TWE in another question today. The company stated the levy is unlikely to have a material impact, as only about $35 million of its U.S. business comes from Australian or New Zealand-produced wine, largely in bulk form. The 10% is slightly better than the 15% on European wine. However, TWE’s U.S. operations face headwinds from deamand weakness and distribution challenges. The stock looks good value ~$7.70 but it appears in need of an operational catalyst to reverse its underperformance – much lower and it will be on people’s M&A radar.

Lynas (LYC): Lynas, like most rare earth stocks, looks great. If we were long we could consider trimming our position but not exiting.

Hybrids:

Trading Margin = The current margin (or yield) that the hybrid security is paying right now in the market.
Fair Margin = The theoretical or “fair value” margin that the hybrid should be paying based on credit risk, market conditions, and other factors.

A higher positive “trading margin versus fair margin” score (like 0.52%) means the hybrid offers a yield above its fair value, indicating potentially better income but possibly higher risk. Conversely, a lower or negative score suggests the hybrid is priced closer to or below fair value, implying lower yield but possibly safer. All else equal, a higher positive score generally signals more attractive value for income-focused investors.

chart

Lynas Rare Earths (LYC)

LAST UPDATED 08/08/2025 16:16

Latest Reports

Afternoon report 12/08/2025

The Match Out: RBA rate cut pushes stocks to another new high

Another new all-time high for the ASX today, buoyed by the expectation that today’s rate cut will be followed by several more; markets now expecting another 3-4 cuts in the next 12-months.

Morning report 12/08/2025

What Matters Today: Is yesterday’s jump a “Get out of Jail Free card” in lithium stocks?

The ASX200 closed up +0.4% on Monday, driven to new highs by a resources sector enjoying a new lease of life; it's already surged +6.7% so far in August. The lithium stocks led the charge following the news that CATL shut down one of the world's largest mines, but on the index level, it was BHP that added the most points, around 30% of the day's 38-point gain. Outside of the gold stocks, the Materials Sector was hot, from lithium to copper, and iron ore.