Given Treasury Wines exceptional exposure to two ATM core thematics (Allying Aussie & Dinning Boom), it was added to ATM’s model portfolio on the 1st September 2015 at a price of AU$5.96. Its share price has now climbed to AU$8.26 in the space of little over 3 months and represents almost 39% return to our members.
Treasury Wines (TWE) is set to continue to benefit from two crucial ATM portfolio thematics. The company sources over 75% of earnings from its offshore markets. ATM continues to hold its bearish stance on the AUD (believes AUD will continue to fall against the USD) and therefore as the AUD falls it should result in higher offshore earnings for the company when converted back to AUD’s (translation gain). Additionally, a falling AUD makes TWE’s exports relatively cheaper than its international competitors and therefore it is likely to lead to a higher volume of international sales (transaction gains). We estimate a 1 cent fall in either the...
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