Thoughts on markets, investing, and equity research.
Six ASX stocks yield between 6% and 8.5%. Three offer genuinely durable income backed by contracted revenues and hard assets. Three carry sustainability questions the headline yield conceals.
Five ASX stocks show the widest price-to-fair-value gaps in the Feb 2026 reporting season. Our analysis asks what the market knows or fears that the models do not, and whether the scepticism is justified.
Four ASX mining services companies earn 10-45% ROIC without commodity exposure. Our analysis finds only Lycopodium (LYL) trades below fair value at A$14.98 vs A$16.26. GNG and PRN are fairly priced, while IMD carries a 27% premium.
Three ASX defence stocks ride the same spending cycle but carry vastly different valuations. EOS trades 50% above our $2.41 fair value on unproven delivery scale. Austal is 17% over at $5.61. Codan at $34.69 is 64% above our $12.56 estimate.
Four ASX housing supply chain companies, all in trough-cycle earnings, all waiting for the same recovery. GWA is the only one priced at fair value (A$2.61). Reece trades 32% above our A$10.71, James Hardie 27% above A$27, Fletcher Building 41% above NZ$1.96.
Three ASX defence supply chain companies that do not make the shortlists but sit where spending actually flows, offering between 31-163% upside to fair value.
Wesfarmers, GYG, and Breville have management credibility of 8.7, 9.0, and 8.1 out of 10. All are 24-27% above fair value. The quality premium has absorbed the margin of safety.
HUB24 has grown to 9.3% platform share and is 57% above our A$42.23 fair value. Magellan has compressed from 63bps to 55bps in fees and is 35% above A$6.13. Insignia is priced at CC Capital scheme value. AMP is at equilibrium earning below its cost of equity.
IAG (8.3/10 credibility) and Suncorp (8.0/10) look worst in reporting season yet both are at or above through-cycle targets. IAG's underlying ex-RACQI margin is 16.3%, its highest on record. Suncorp's UITR of 11.7% came in within the 10-12% target despite A$453m of above-allowance nat-cat losses.
Transurban, Telstra, and APA are executing flawlessly. But with the 10-year bond yield at 4.86%, their yield spreads have collapsed to zero or negative. Quality infrastructure at the wrong price.
Spodumene crashed 87% from US$5,000 to US$672 per tonne. Three ASX lithium companies were fully exposed. Their fates diverged based on one factor: where they sat on the cost curve.
Gold is at record highs above A$6,000/oz. Regis Resources made A$323 million profit. St Barbara made A$1.3 million. The difference is hedge book positioning, balance sheet strength, and jurisdiction.