# WES - Wesfarmers Limited



## sam21poddy (7 August 2004)

Wesfarmers is trading lower today and I would like to buy it to get the dividend but someone told me that if I buy it today I won't get the dividend.  But I can't see the dates anywhere on any of my broker calendars.  Does anyone know if this is true, that I won't get the dividend if I buy it today?


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## stefan (7 August 2004)

*Re: Wesfarmers - Is it trading ex-dividend?*

So far Wesfarmers ex dividend date has always been early september. Don't know if that changed, but why would it?

Happy trading

Stefan


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## sam21poddy (7 August 2004)

*Re: Wesfarmers - Is it trading ex-dividend?*

If you look at the historical dates, it seems that on the dates that the results are announced, the record date (and ex-dividend date) are backdated.  I know this sounds ridiculous but the most recent dates were:
2 March '04 - reporting date for first half results;
16 Feb '04 - ex-dividend date for first half results;
20 Feb '04 - record date for first half results. I haven't seen this with other shares. I suspect that the professional traders know how it works and that is why it is trading so low today.  I don't want to be caught out and buy it if I don't get the dividend.  I am holding too many shares at the moment which will take a while to recover so I don't want to get in any deeper unless I am sure of my facts.


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## stefan (7 August 2004)

*Re: Wesfarmers - Is it trading ex-dividend?*

sam,

I can't follow you there. WES has announced it's results on the 10/2 declaring a dividend to be paid on the 2/3. You normally don't know when a company goes ex dividend much in advance. You can however relay on previous dates to get an idea. So for now, Wesfarmers are scheduled to release full year result and dividend announcement on the 10th of August. Surely they wouldn't be trading ex dividend today then.

Happy trading

Stefan


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## sam21poddy (7 August 2004)

*Re: Wesfarmers - Is it trading ex-dividend?*

OK.  I see where the confusion occurs.  You say WES announced its results on 10 Feb.  My search of past calendars (and ASX) shows that it announced its results on 2 March (after the ex div date).  The next announcement for final year results is 10 Aug (next Tues).  So I will have to listen to the results next Tuesday and see what dates they announce as the record date for paying a dividend.  I currently hold 500 shares so I think I will leave it at that.  Stockmarket is a bit too volatile for me at the moment.  Thanks for replying.


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## Ann (27 December 2005)

*Re: Wesfarmers - Is it trading ex-dividend?*

This is looking a little more positive recently. Just a short time ago I attended a broker presentation, they suggested the the Bunnings 'softness' was overstated.

I noticed the incoming CEO  Richard Goyder gave an open briefing on the 18/11/05 http://www.corporatefile.com.au/doc...ing Day Consolidated Version PDF 18.11.05.pdf

....here is a chart with some comments...


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## Ann (28 December 2005)

*Re: Wesfarmers - Is it trading ex-dividend?*

Tomorrow will be interesting for this stock.


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## RichKid (28 December 2005)

*Re: Wesfarmers - Is it trading ex-dividend?*



			
				Ann said:
			
		

> Tomorrow will be interesting for this stock.




Hi Ann,
Nice charts! I've only just begun to keep an eye on indicators like the 200 day ma that large groups of participants look for, so a sustained break over that hurdle may see those who trade ma's (eg ma crossovers) come into buy and that should push the price higher than that most recent minor top as well. Interesting how one group can trade off the other group- not that all buyers will be trading the ma but it's interesting.


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## mit (28 December 2005)

*Re: Wesfarmers - Is it trading ex-dividend?*

Looks good but today's volume is low though as we are in the christmas break period. It's up on my radar as well as the Dividend is due in mid February. I need to buy it tomorrow to keep the franking credits

MIT


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## RichKid (28 December 2005)

*Re: Wesfarmers - Is it trading ex-dividend?*



			
				mit said:
			
		

> ...Dividend is due in mid February. I need to buy it tomorrow to keep the franking credits
> 
> MIT




Isn't the holding period calculated after the ex-div date (eg 45 day rule? hold for 45 days after ex-div? Isn't that for large amounts of divs?). Sorry a bit of a novice here with this franking stuff.....

silly me, just did a search on the topic, I don't understand the rule properly, Crashy seems to have explained it in a nutshell here in  Rozella's ex dividend thread (post #31)https://www.aussiestockforums.com/forums/showthread.php?t=454&page=2&pp=20&highlight=day+rule. So you just have to hold if for 45 days at risk, can be 45 before or 45 after ex-div date...


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## mit (29 December 2005)

*Re: Wesfarmers WES- Is it trading ex-dividend?*

I sell on the ex-div date, of course you can hold past the ex-div date to make up the 45 days. Another thing is that I don't think the 45 days includes the buy and sell days. 

MIT


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## Dutchy3 (19 January 2006)

*WES - Wesfarmers*

Looking for a BIG WHITE. Will we get one?


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## Dutchy3 (20 January 2006)

*Re: WES - Wesfarmers*

Breakout BIG WHITE's are getting a little scarce in the ASX 200 these days.

Still, took a 'anchor' position in this one today. Will compound if it proves strong.


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## Dutchy3 (30 January 2006)

Market Depth remains strong through the day and at the close is 8.5 : 1.

Gap up on the open a good sign as well. Hold Long


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## Julia (30 January 2006)

Presuming you already hold WES, at what point ($) would you add to your position?  This stock has only just exceeded my cost price.  The yield is good.

Julia


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## michael_selway (30 January 2006)

Julia said:
			
		

> Presuming you already hold WES, at what point ($) would you add to your position?  This stock has only just exceeded my cost price.  The yield is good.
> 
> Julia




Yeah yeild is pretty good about 5-6% + franking. But the risk of holding it is quite high esp in times like this? Also not much upside accodring to the forecasts?

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 163.9 251.3 246.3 226.4 
DPS 180.0 237.7 240.0 228.0


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## 123enen (30 January 2006)

I agree with Michael. Some of the shine has come off this market darling.
Coal prices down and mining costs up.
Hardware stagnant if not a little down.
Insurance margin squeezed.
Still a good company but not outstanding and earthquake proof like before.

Might get back to $40 as it runs towards dividend ex date.


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## Dutchy3 (31 January 2006)

Hi

I have a time frame that can be measured in months. As this is a CFD position I will remain long while I'm convinced the current reaction can take me back to the 4000 - 4150 area, else I pay financing for time not price. Red lines are the point at which I've taken positions.


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## Dutchy3 (16 August 2006)

Hi

Managed to extract capital from this one as it stalled.

Weekly chart tells a better story. Hard to extract much joy from a stock that is failing at longer term support around 3500


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## 3 veiws of a secret (24 August 2006)

Seems like this share is free-falling ....perhaps an interesting stock for the long termed portfolio,any veiws from our technical cohorts.


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## Sean K (24 August 2006)

Golly, next support, way down there!   

The only thing that's going to turn this around is significant change in business model and/or sentiment and/or T/O.


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## 3 veiws of a secret (24 August 2006)

Recently reading the Smart Investor comic August edition and if my memory serves me well, it had a sulky reveiw on WES, seems the comic was correct ....here you go page 20 written by Alan Jury !
I have a habit of picking up shares like this one ,once it has been oversold -take a look at GDY,EOS ,RIN  you see how low I stoop.


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## Sean K (25 August 2006)

You going to wait till it hits $30, 3 Views, or are you bargain hunting now.


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## 3 veiws of a secret (25 August 2006)

kennas said:
			
		

> You going to wait till it hits $30, 3 Views, or are you bargain hunting now.




At the moment I've got a cash flow problem,but once resolve early next week ,I will access.
Patience Kennas ......you never know when the worm turns in todays market ,but WES have some big issues coming their way,I'd rather wait!Dark clouds mate ,getting darker! Need time to think even CSL tempts me.


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## Ken (17 November 2006)

wes....


couple of months on...  still think its in a down trend...

is $34 a share too expensive. the dividend is very handy....

would it be worth adding. its under performed 2006 and 2005 hasnt it...


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## theasxgorilla (11 December 2006)

To my estimation (purely technical) it's consolidating in a downward slopping flag pattern and has found support at the 38.2% fibb. retracement of a previous major range and is within the orb for a primary cycle low.

It's also paying a 5.9% fully-franked dividend against a 3.8% All Ords average.

This all said it's not showing any signs (yet) of resuming an uptrend.


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## Kauri (13 January 2007)

*Wesfarmers tipped as likely target for LBO 
*_12th January 2007, 7:45 WST

_Leveraged buyout firms are now said to be sizing up Wesfarmers for a $14 billion-plus takeover bid with a view to breaking up the WA group. 
With Wesfarmers shares trading at near 12-month highs, traders said yesterday that trading in credit default swaps suggested the company was being stalked. 

Wesfarmers five-year credit default swaps (CDS), financial instruments that are used to speculate on a company’s ability to repay debt, have widened from $US24,000 ($30,670) for each $US10 million of debt to $US45,000 since the beginning of the year. An increase indicates a deterioration in the perception of credit quality and a fall suggests an improvement. 

“There is nothing else that would justify that kind of widening at the moment,” Westpac director of capital markets Phil Miall said. “Someone is expecting its credit quality to deteriorate.” 

Wesfarmers is seen as particularly attractive to LBO groups because of its diverse spread of strong, separate businesses with good cash flows, including the Bunnings hardware chain and Kleenheat Gas, which could be sold as stand-alone companies. 

“Wesfarmers has six separate businesses which can be readily divested,” said Craig Saalmann, a credit strategist at ABN AMRO. “There is no shortage of liquidity chasing good assets.” 

Also, unlike other targets, Wesfarmers shares are trading well off their record highs, having risen just 1.5 per cent last year, against the 19 per cent gain by the S&P-ASX 200 index. 

At yesterday’s close of $37.56, up 36 ¢, Wesfarmers is valued at $14.2 billion. However, on a sum-of-parts basis, it may be worth considerably more. 

The company declined to comment yesterday. However, one senior Perth business figure, who requested anonymity, said he did not doubt Wesfarmers was “vulnerable to a break-up”. 

“I think there is a real chance the company might well be in play down the track,” he said. 

Wesfarmers chief executive Richard Goyder is already on record as saying that the flood of LBO cash into Australia over the past 12 months has hampered growth prospects for listed companies by increasing asking prices for acquisitions 

“The whole private equity thing is interesting, because clearly it’s making some assets more expensive and I can’t see us getting into a bidding war with private equity because we wouldn’t be able to pay the same price,” he said last month. 

SEAN SMITH and ROBERT FENNER with REUTERS and BLOOMBERG


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## doctorj (13 January 2007)

Ever since the offer for Coles I've been saying that old WES would be next.  I agree with the author that the business is worth far more than the some of the parts.  Further more there gearing is easily low enough to support the debt the LBO would bring in.

The outlook for Wesfarmers' Coal division is putting too much downward pressure on the overall shareprice.  Equally, I think the market has overly discounted them for it.  

Interestingly enough, Wesfarmers have very recently split off their Coal operations from the Wesfarmers Energy division in to a division of its own.  WES requires that each of its division's compete internally for capital.  Maybe they're positioning themselves to divest the coal assets?

Incidentally their insurance division is going gangbusters at the moment - the ROC for some of their insurance businesses is off the scale.  That's why they took OAMPs and why it wouldn't suprise me that in the next 12-18 months we see them take a few more insurance companies out.

But the question is - in the event of a hostile takeover (a friendly takeover just won't happen), will they be able to defend themselves?  It's tough.  I think management at WES is conservative enough to make them an easy target.  However, with the right advisers, there'd be plenty of easy arguements to make that no matter what the offer is, it undervalues WES.


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## Sean K (13 January 2007)

I've been watching this too, but not closely enough the past month to notice the breakout. I've always been vary curious of their business model. It seems to be more a shell company for other assets than one homogenous organisation. Insurance and coal?? More like an LIC? With the amount of liquidity in the market this has to be on the radar of MBL and co.


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## doctorj (13 January 2007)

No, just an old fashioned conglomerate.

It was originally a business that served the needs of Western Australian farmers.  They owned a company called Landmark (which they have since sold to Elders I think). When a farmer needed seed, pesticides, or whatever, all he had to do was speak to his local Landmark office.  Wesfarmers expanded into producing the fertilizers and chemicals themselves and added specialist insurance products aimed at Farmers. 

Since then they've added coal, got rid of Landmark and some of their other businesses and also grown insurance thru the purchase of Lumley, some underwriters from farmer's co-ops around Australia and even ventured into NZ.

Their model hasn't been anything like a LIC, its been about growing their existing businesses where they have experience into new markets - gradually stepping out.  It's been very conservative, but it has worked.


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## Sean K (13 January 2007)

Thanks DrJ, Most of the subdivisions I can understand as serving the needs of the WA farmers. The business unit that doesn't make a lot of sence to me is the Coal division. What made them go into this area? Plus, the Curragh mine is in QLD - hardly WA focussed there. Just natural expansion? Do you think they've eventually expanded too much, and therefore would be a target, or was this just their approach to add value to shareholders?


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## doctorj (13 January 2007)

I don't know too much about the advent of Wesfarmers Energy unfortunately.  As for it being in Qld - I think this isn't especially relevent.  WA is where WES started, but it now sees itself as proudly Australian.  It has established close ties with farmers and tradesmens co-ops across the country.  It has especially close ties to Qld, especially after Cyclone Larry in March last year.  It destroyed so much in the farmland up that way and Wesfarmers took the opportunity to build its reputation with its clientele in the area to help get a lot of farmers back on their feet.

I don't think Wesfarmers have expanded "too much".  They are an incredibly well run and managed company.  In a world of cheap debt, I just feel they are a little too conservative which has cost them in terms of there share price in recent years (lets not forget just how much they've out performed the market in the last 10 though) and will ultimately make them a target for a LBO.


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## robots (13 January 2007)

Hello,

Since Chaney has left their SP has struggled yet NAB's has sky rocketed.

I think their being looked at as an expensive Retail stock primarily from the Bunnings side of things.

Bunnings is now selling household electrical items etc

Will be interesting to see next 5yrs.

thankyou
robots


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## Garpal Gumnut (13 January 2007)

Thank you all for your thoughts on WES

I agree with technical and fundamental opinions that something is afoot with WES.

?$42 + within the next few weeks.

Garpal


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## Sean K (13 January 2007)

Garpal Gumnut said:
			
		

> Thank you all for your thoughts on WES
> 
> I agree with technical and fundamental opinions that something is afoot with WES.
> 
> ...



Garpal, you need to provide some analysis on why this stock it going to your target here. Not just a blind pluck. Can you please inform us of your methodology in coming to this price targe? Cheers, kennas.


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## Garpal Gumnut (13 January 2007)

Thank you for giving me the chance to expand.

Fundamentally  I agree with Kauri and Doctorj. WES is a conglomerate, asset and cash rich and not just a West Australian Co-op run by farmers anymore. It is the sort of operation that Buffet would have looked at 30 yrs ago in the US. Its well run, divisions are each accountable and the company is not shy of shifting direction. It makes money and pays good divies. Every time I go to Bunnings I am astounded at the service and value, and the number of customers. I don't know anything about insurance preferring to buy stock in insurance companies, but they tell me WES are on to a good thing in the financial press.

Technically with which I am more comfortable on the monthly charts  it has been making higher highs and lows since 1990, on the weekly a downtrend since Nov 2005 has been broken and price and 5,15 and 30 EMA have recently crossed to an uptrend. Just before Christmas the daily charts did similar. (I don't watch daily charts much, I'm a long term investor.) The high was $42.45 I think on about St Patricks Day in 2005. I expect the monthly chart to continue as I believe in the power of the trend. 

I may be wrong. Sorry I can't post charts.

garpal


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## reece55 (13 January 2007)

Wow guys, this move from Wesfarmers completely skipped past me. To be honest, I watched it continually decline throughout 06 and really just took it off my watch list. I have always like the business model - it has always been a well managed business and I agree with Kennas in saying that the mix is a bit odd - certainly not a traditional divisional mix, but it has certainly worked in their favour in the past.

Really like this latest move technically -  it appears to have broken that downtrend that has been in place since about March 2005. Additionally, those lows back August - September 06 attracted a lot of volume, suggesting buyers accumulating a cheap stock oversold. Fridays close is an excellent sign - close right at the top with medium high volume. If there is a LBO here on the cards, I would expect that in order to get the directors to sign off, they will need a significant price premium than is presently reflected in its share price. I will be adding this one to my watch list ASAP - I think this one has the potential to move and quickly.

Cheers
Reece


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## theasxgorilla (13 January 2007)

Hi Gumnut (odd name for a trader?!?),

Here is the chart.  I've marked it up to show each consolidation/down trend and  the fibb. level of the retracements.  Moving average is a "simple" 12-month.


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## Garpal Gumnut (13 January 2007)

Nice chart Asxgorilla. What software do you use? Gumnuts wait and wait for fire or rain then grow. Your name equally is peculiar for a trader.
Garpal Gumnut


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## Sean K (13 January 2007)

theasxgorilla said:
			
		

> Hi Gumnut (odd name for a trader?!?),
> 
> Here is the chart.  I've marked it up to show each consolidation/down trend and  the fibb. level of the retracements.  Moving average is a "simple" 12-month.



Great chart Gorilla, thanks. 

My 5 year chart is a little more bullish that yours. Just turned the corner on a long term wave 5 perhaps. Plus, MACD just about to break though signal line and diverging....


Time for a CDF perhaps...  

Must say, I'm still bearish about the general market right at this point. Wouldn't want to commit overly to something that will be effected by a general market correction - like this - perhaps...


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## Garpal Gumnut (13 January 2007)

I agree Kennas with 5th wave EW. Meant to mention it in my post. Where does the 5th wave go to? I could look it up but you probably know. Probably a fib type extension from the high.   Garpal Gumnut


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## theasxgorilla (13 January 2007)

Garpal Gumnut said:
			
		

> Nice chart Asxgorilla. What software do you use? Gumnuts wait and wait for fire or rain then grow. Your name equally is peculiar for a trader.
> Garpal Gumnut




Haha, touche Gumnut   

I use Market Analyst (version 4).


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## reece55 (13 January 2007)

kennas said:
			
		

> Time for a CDF perhaps...
> 
> Must say, I'm still bearish about the general market right at this point. Wouldn't want to commit overly to something that will be effected by a general market correction - like this - perhaps...




Kennas

Agree that the XAO is presently showing strong bearish divergence, so in regards to the market in general, I am generally looking for shorts as opposed to longs, as I think that will be our next move. But in saying that - WES looks like a great opportunity here. You could always set your stop at about 37.00 and go long here - to me it looks to have the potential at least to $40.00 (highs in August 05) and potentially 42 per Gumnut, provided the bullish move remains intact. Good risk/reward here IMO - I wouldn't gear too much here as on that kind of a setup, I the risk would be about 3.2%, so maybe warrant may be a goer. Haven't looked at options, but I would assume IV would be high due to LBO talks.

Cheers
Reece


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## Garpal Gumnut (13 January 2007)

Thanks Theasxgorilla., and all other posters. a great venue for sharing ideas which I use too infrequently.
Lets all expect good trading fortune from WES. My buys have been executed. No exciting CDF's, Warrants or Options. A div in feb and a rise above $42 will satisfy me.
Garpal Gumnut


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## theasxgorilla (13 January 2007)

Garpal Gumnut said:
			
		

> I agree Kennas with 5th wave EW. Meant to mention it in my post. Where does the 5th wave go to? I could look it up but you probably know. Probably a fib type extension from the high.   Garpal Gumnut




Typically Wave 5 is between a 50% and 78.6% extention of Wave 3 (taken from the bottom of Wave 4) but can be 100% or more.  See below (monthly chart of WOW) for a good example of a Wave 5 going _more_ than the distance...150% so far.

I think WES is a good trade.  It's in the mother-of-all long term up trends and has a habit of doubling in price when it moves.


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## noirua (16 January 2007)

WES have an interesting write up by Aireview:  http://www.aireview.com.au/index.php?act=view&catid=8&id=4845&setSub=1

 Worth looking at on break-up rumours alone.


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## noirua (18 January 2007)

Still looking good at $39.52, up 29c today.

The approval by ACCC of the purchase of Linde Gas Pty., by Wesfarmers and completion by Feb 2007, will have had nothing to do with the share movement. This will have been, continuing thoughts on reports of a buy-out by a Private Equity Buyer.


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## Julia (18 January 2007)

theasxgorilla said:
			
		

> Typically Wave 5 is between a 50% and 78.6% extention of Wave 3 (taken from the bottom of Wave 4) but can be 100% or more.  See below (monthly chart of WOW) for a good example of a Wave 5 going _more_ than the distance...150% so far.
> 
> I think WES is a good trade.  It's in the mother-of-all long term up trends and has a habit of doubling in price when it moves.




Gorilla:

I'm a bit puzzled by this post.  The thread is about WES and the chart is for WOW?

Julia


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## Sean K (18 January 2007)

Julia said:
			
		

> Gorilla:
> 
> I'm a bit puzzled by this post.  The thread is about WES and the chart is for WOW?
> 
> Julia



Hi Julia. I think it was just to give an example of where a wave 5 could go. Sean


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## noirua (18 January 2007)

Something odd is going on with WES trading. Having hit a high of $39.80 they fell abruptly to $39.11, and then rebounded to $39.35 a few minutes ago.


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## Garpal Gumnut (18 January 2007)

As you would be aware Noirua a stock like WES is traded by large funds as daytraders trade penny dreadfuls. A variation such as their price today I would accept as the market deciding that is its fair value at that price at that moment in time. The chart on a daily basis after today will get the candle guys going into a high spin.(or a turning one)(or a spin) (or just a turn) (or stargazing) .
Garpal Gumnut


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## TheAbyss (8 February 2007)

I have just joined the WES holders ranks for a while. Garpal, love your style.


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## TheAbyss (15 February 2007)

Any thoughts on what impact the report due today will have?


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## theasxgorilla (15 February 2007)

TheAbyss said:
			
		

> Any thoughts on what impact the report due today will have?




Hopefully a rapid move with extreme volume to the high side of $40


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## TheAbyss (15 February 2007)

Well it is certainly a rapid move. Wrong way though.

Dividends up 30.7%. Profits decrease 12%.

4 of the 6 divisions were up though. Yet another opportunity to buy shares at a cheap price in a quality company. The market hates any news that is less than spectacular doesn't it.


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## noirua (15 February 2007)

I'm still banking on a break-up of Wesfarmers as this could prove interesting as well as profitable.


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## TheAbyss (15 February 2007)

It is a chance. The private equity funds are causing some waves at the moment. I see CSR is on the rise again this week. What are the odds of speculation resurfacing shortly?

Wes are a solid stock whether they break up or not IMO. I have no intention of parting with them and picked up a few more at a good price today. The SP is kicking back up a bit already. At one stag eit went to 37.45 but back to around the 38.00 mark now.


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## Garpal Gumnut (15 February 2007)

TheAbyss said:
			
		

> Any thoughts on what impact the report due today will have?




I would guess the funds will sell WES down on small volume for a few days and then reaccumulate before it goes ex-div. If it goes to $35 ?I'll be back in for some more. Long term I agree its a $40+ stock.

Garpal


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## UMike (16 February 2007)

Won't go anywhere near $35.


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## Garpal Gumnut (16 February 2007)

UMike said:
			
		

> Won't go anywhere near $35.




as Pauline said  "Please Explain"  not that I disagree , but this is a forum of ideas not statements.

Garpal


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## Garpal Gumnut (16 February 2007)

Sorry I lost all my data due to a computer crash this week, I just had a look at WES on Comsec charts. The next support is $37 and then it is air to $35. I think Ill put an order in around there.

Garpal


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## UMike (16 February 2007)

Garpal Gumnut said:
			
		

> as Pauline said  "Please Explain"  not that I disagree , but this is a forum of ideas not statements.
> 
> Garpal



 More a feeling than anything factual.
But some could be.....
1. Takeover rumors.
2. Strong sound business.
3. Strong cashflows.

Mate if it gets to $35, I'd have bought a large parcell at $35.01.


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## Garpal Gumnut (16 February 2007)

UMike said:
			
		

> More a feeling than anything factual.
> But some could be.....
> 1. Takeover rumors.
> 2. Strong sound business.
> ...



 feel.,

I'd accumulate at or slightly above $35 but feel it will take off on t/o news or just good management before then.

thanks for your ideas and opinions.

Garpal


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## Garpal Gumnut (21 February 2007)

UMike said:
			
		

> More a feeling than anything factual.
> But some could be.....
> 1. Takeover rumors.
> 2. Strong sound business.
> ...




Sluckingood, closed today a squeeze above $37.

Just loading my data tomorrow, let me know what you think?

Garpal


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## UMike (21 February 2007)

Garpal Gumnut said:
			
		

> Sluckingood, closed today a squeeze above $37.
> 
> Just loading my data tomorrow, let me know what you think?
> 
> Garpal



You do know they went Ex dividend.

They ended up 85 cents down. I believe the dividend was 85 cents with franking so really the stock was up today.


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## Garpal Gumnut (21 February 2007)

UMike said:
			
		

> You do know they went Ex dividend.
> 
> They ended up 85 cents down. I believe the dividend was 85 cents with franking so really the stock was up today.




Dear UMike, 

My left brain tells me a stock is never up when it ends down, div or no div.

Lets wait and see. You may be right though.

If not, lets get our orders in for $35.01

Garpal


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## theasxgorilla (21 February 2007)

Garpal Gumnut said:
			
		

> My left brain tells me a stock is never up when it ends down, div or no div.




Something tells me we'd all like to keep the dividend AND yesterdays share price .


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## Garpal Gumnut (21 February 2007)

theasxgorilla said:
			
		

> Something tells me we'd all like to keep the dividend AND yesterdays share price .




Dear Gorilla,

Something tells me this sob is a $54 stock. I've got no evidence for this. There are talks of t/o. Its a complex well run show. Technically it is in a trading range.
I'm not dewey eyed about it, I'll accumulate at $35, sell at $29 and smile at $42+.

Garpal


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## Garpal Gumnut (28 February 2007)

UMike said:
			
		

> More a feeling than anything factual.
> But some could be.....
> 1. Takeover rumors.
> 2. Strong sound business.
> ...




Dear UMike,

I reckon it will get to $35, not that todays action would have anything to do with it!!

Garpal


----------



## UMike (28 February 2007)

Garpal Gumnut said:
			
		

> Dear UMike,
> 
> I reckon it will get to $35, not that todays action would have anything to do with it!!
> 
> Garpal



Didn't go close.

Although it had a great recovery.


----------



## Garpal Gumnut (1 March 2007)

UMike said:
			
		

> Didn't go close.
> 
> Although it had a great recovery.




Dear UMike,

Have you got your order in for $35.10??

Garpal


----------



## UMike (1 March 2007)

Garpal Gumnut said:
			
		

> Dear UMike,
> 
> Have you got your order in for $35.10??
> 
> Garpal



35.01   

Fully Invested. If CBH gose up a fair margin and WES stays about where it is I might go for it.

I gotta find out why WES is dropping a disproportional amount before jumping in.

I have previously held WES and did very well outta them.


----------



## Sean K (2 March 2007)

If   the market stabilises then WES should still be breaking up from down trend established from Jul 05. On the way back up, even more resistance at $40.00 now. 

(not holding, yet)


----------



## Sean K (16 March 2007)

Still broken up from long term downwards movement. Respected support lines. Interesting to compare to above post. Going as expected so far.


----------



## noirua (16 March 2007)

Hi kennas, All I want is a decision to break the company up as this choppy sideways trend seems to be going nowhere. Maybe, the chartists have spotted something I can't see?


----------



## Sean K (16 March 2007)

noirua said:
			
		

> Hi kennas, All I want is a decision to break the company up as this choppy sideways trend seems to be going nowhere. Maybe, the chartists have spotted something I can't see?



It's gotta be on the list of KKR et al you'd think. Volume might be an indicator for that....Can't see it yet.


----------



## doctorj (3 April 2007)

http://www.news.com.au/business/story/0,23636,21492615-462,00.html

Wesfarmers, in a consortium with MBL have taken a 10-15% in Coles Group.

This just does my head in.  Obviously, WES has shown its capabilities in retailing with the success of Bunnings, but will these skills translate to success in food? To my mind, this is a big step for WES and will be a big challenge.  Most lucrative of all the elements of a food retailer is their fresh produce range which is far more challenging (ie. it has a very limited shelf life) than hawking nuts & bolts to home reno junkies.

That said, food & booze is a defensive industry and as such fits in well with the WES business model.

Let me say again, this just does my head in - I'll have to think this through much more.  I like it, but it does have the potential to make or break WES.


----------



## 56gsa (3 April 2007)

perhaps they'll sell off the fresh produce and keep the liquor arm which will be merged with bunnings so you can have a beer while contemplating what colour shovel you'll buy?


----------



## ROE (3 April 2007)

*WES surprise the market?*

I was surprise by WES bid for Coles, anyone else got caught up by it?

Man WES is in trading halt and last check there is a bid in for $45?? what the??


----------



## noirua (3 April 2007)

*Re: WES surprise the market?*



ROE said:


> I was surprise by WES bid for Coles, anyone else got caught up by it?
> 
> Man WES is in trading halt and last check there is a bid in for $45?? what the??





Hi, Something interesting is happening to WES at last. Worth a lot more in pieces are Wesfarmers.


----------



## doctorj (3 April 2007)

*Re: WES surprise the market?*



noirua said:


> Hi, Something interesting is happening to WES at last. Worth a lot more in pieces are Wesfarmers.



Depends what your investment objectives are.  Sure if Wesfarmers was subject to a LBO and split up and relisted, the offer would be for a good whack more than its current market cap.  If the takeover of coles is successful, it should take WES off the market for a little while as higher debt levels will make WES appear less cheap and the implications of the Coles takeover is processed.

I have to be honest, I like Wesfarmers, a lot.  Their greatest asset is their culture and management.  Their goal is simple, to get a good return on shareholder's funds. 

I've had the opportunity to process the idea more over the course of the day and I believe that I was accurate earlier when I said it is likely to be a good thing for WES holders but not without significant challenges.  The success of Myer after being bought suggests that experienced retailers with good supply chain management can extract significant value from the old CML businesses.  WES has both in buckloads in their proven success with Bunnings.


----------



## noirua (4 April 2007)

Hi doctorj et al, WES seem to have a mix of interests now that vary from selling a loaf of bread to a tonne of thermal coal. It seems, imho, that seperating the mining operations could advantage shareholders.


----------



## doctorj (4 April 2007)

noirua said:


> Hi doctorj et al, WES seem to have a mix of interests now that vary from selling a loaf of bread to a tonne of thermal coal. It seems, imho, that seperating the mining operations could advantage shareholders.




They've had the variety of business lines for some time, but I agree coal should go.  It wouldn't surprise me if it does either.  Coal was split from their energy division several months ago (refer to their website).  Distinct reporting lines/management and performance assessment makes it not only easier to sell, but easier to justify the sale now its poor results aren't diluted by the rest of the energy division.


----------



## noirua (5 April 2007)

The market appears happy with the Wesfarmers tie up and moves above $39. Interest could stick around for quite sometime.


----------



## Garpal Gumnut (5 April 2007)

noirua said:


> The market appears happy with the Wesfarmers tie up and moves above $39. Interest could stick around for quite sometime.




I agree.
I believe WES to be in the beginnings of a wave 3 which will take it well above its high of $42.


----------



## Sean K (15 June 2007)

Garpal Gumnut said:


> I agree.
> I believe WES to be in the beginnings of a wave 3 which will take it well above its high of $42.



Great call. Looks like it's about to breakout, or already has broken out on the 3yr weekly. Indicators are looking good. 

The Coles buy must be seen to be a good thing here. 

Any EW updates on this?


----------



## theasxgorilla (15 June 2007)

Kennas, we must be watching a number of the same shares!

I'm not sure about the E/W count on this one, but the trend is UP.  Breakout from consolidation into new all-time-high territory probably suggests that we've seen a Wave 4 and the manoeuvring of the last few weeks has been a wave i, ii, and now a wave iii of one lesser degree.

On a weekly and monthly chart WES has never closed this high.  We're still around the middle of the month, so it will be interesting to see if it can maintain this strength over the next could of weeks.  Super bullish if it can.


----------



## noirua (16 June 2007)

The recent $3 jump by WES may have more to do with the likelyhood of getting CGJ at a cheaper price than was first thought. The Bunnings sale and leaseback probably helped the joy a little.


----------



## Kauri (16 June 2007)

Todays West Australian... Southern cross at it again...


*Wesfarmers surges on coal price, good outlook 
*

_16th June 2007, 9:15 WST

Wesfarmers shares soared to a record high yesterday amid resurgent coal prices and a bullish research note predicting they could top $60 if the $20 billion takeover of Coles Group succeeds. 

The shares jumped $1.50 to $42.39, outpacing a firmer all ordinaries and in the process eclipsing Wesfarmers’ twoyear-old record close of $42.37. 

Already WA’s biggest industrial stock, Wesfarmers’ market capitalisation has soared by $1.5 billion this week to last night value the company at $16.5 billion. 

Whereas most of this week’s gains were attributed to stronger coal prices (coal contributes about 40 per cent of Wesfarmers’ gross profits), broker Southern Cross Equities helped fuel investor interest by claiming that “Wesfarmers is the natural owner of Coles”. 

In a note to clients, the broker said a successful takeover of Coles could add $5 to Wesfarmers’ longer-term share price, which should be boosted in any case because of an improved 2008 profit outlook for the WA company’s inherent divisions, including coal and Bunnings. 

“This could support upside valuations of Wesfarmers above $60 a share,” Southern Cross said. 

Wesfarmers and its private equity partners have already flagged that any offer for Coles would include a sizeable Wesfarmers scrip component. 

Bids are due in the week starting June 25. A Coles spokesman said yesterday the timetable remained unchanged, despite the Texas Pacific Group-led consortium rivalling Wesfarmers asking for a bid deadline extension. 
PETER KLINGER 
_


----------



## Garpal Gumnut (16 June 2007)

kennas said:


> Looks like it's about to breakout, or already has broken out on the 3yr weekly. Indicators are looking good.
> 
> The Coles buy must be seen to be a good thing here.
> 
> Any EW updates on this?




Yes I would be interested in EW updates on WES.

Have been in $34-35 over last 6 months and am looking to pyramid up on it.

I have read that :
    it has been more aligned to coal price, 
    funds are low on it and are now getting in as if WES gets CGJ they will be     underweight, 
    it is the frontrunner for CGJ

However it is not a done deal that it will get CGJ and WOW is a powerful competitor and may increase the ante for CGJ.

I tend to long term accumulation of upward trending stocks and am more of a chartist than a fundamentalist. I'm more excited by its punch up through last few months consolidation on increasing volume, than anything else ,as per your above charts. 

Garpal


----------



## Sean K (16 June 2007)

Garpal Gumnut said:


> Yes I would be interested in EW updates on WES.
> 
> Have been in $34-35 over last 6 months and am looking to pyramid up on it.
> 
> ...



I think there's some private equity/break up premium factored into the price also at the moment, which leaves me a little cautious, but that certainly might be the play which would add 30% (approx) to it's current sp. Maybe.


----------



## Sean K (18 June 2007)

Oustanding breakout I think on the 3 yr chart. Was a short term break a few days ago on the daily. Touched $44.00 today. Anyone actually own this? 

I don't. I've been spectating.


----------



## chops_a_must (18 June 2007)

kennas said:


> Oustanding breakout I think on the 3 yr chart. Was a short term break a few days ago on the daily. Touched $44.00 today. Anyone actually own this?
> 
> I don't. I've been spectating.




I do.

Traded the breakout and looking at a target of around $48. Might be one to trade to free carry kennas, as it pays good dividends... Nicely run company and I'm not exactly sure why it hasn't joined in the run since the end of last year...

The $48 is the 261 extension of the recent low to its previous high.

ORG looks good as well while we're talking blue chips kennas. Not holding yet though.

Cheers,
Chops.


----------



## theasxgorilla (18 June 2007)

kennas said:


> Oustanding breakout I think on the 3 yr chart. Was a short term break a few days ago on the daily. Touched $44.00 today. Anyone actually own this?
> 
> I don't. I've been spectating.




Yes, since the initial breakout (my definition) in December last year.  Given confirmation of new high and blue sky, I may add to my position.


----------



## CanOz (18 June 2007)

theasxgorilla said:


> Yes, since the initial breakout (my definition) in December last year.




Thats interesting...your B.even stop must have just held on...assuming you use one...that was quite a retracement after the  channel breakout.

Cheers,


----------



## theasxgorilla (18 June 2007)

Not even!

I had no new major low, so I never moved my initial stop.  As far as open equity is concerned on this trade, back then, I was in the red-ink.  But there were a few factors to consider...

. most of the time when I buy a breakout I wait quite a while for confirmation that its the McCoy.  When you buy at this point you have to expect a retracement and an initial stop must accomodate this.

. second I had no new major low to use as an intelligent next stop level.

. third, we had Feb 28 shenanigans putting excessive (artificial/distorting) downward pressure on the market.

. at the bottom of that low, on a daily chart, we had a big outside bar (respect the outside bar...at tops and bottoms)

. on a weekly chart a tail formed...probably all those clever people who said, "if it gets down to $35.00 again I'm buying".

As chops said, this one pays a great dividend yield (not as good as it did in December  ), although it's an ASX20, $40 share, so my expectations are realistic.   To have a 16% price gain in 6 months is still only matching the XJO for the same period...hardly staggering.


----------



## Garpal Gumnut (18 June 2007)

theasxgorilla said:


> Not even!
> To have a 16% price gain in 6 months is still only matching the XJO for the same period...hardly staggering.




Mate,

If I could have a 16% gain in six months, every six months over a trading lifetime I'd be more than comfortable with it. 

It is a staggering return over six months.

Live through a good bear correction like 87, see the market go nowhere for 5-6 years and you wouldn't be so dismissive of 16% in six months.

Garpal


----------



## CanOz (19 June 2007)

Great reply G'rilla, incidently was that a CFD trade?

I think i would have got stopped out...probably went too tight with it.

Many thanks.

Cheers,


----------



## theasxgorilla (20 June 2007)

CanOz said:


> Great reply G'rilla, incidently was that a CFD trade?
> 
> I think i would have got stopped out...probably went too tight with it.
> 
> ...




Cash and margin trade, not CFD.  I think that time for a swing trade with CFDs has passed for now.

As for being stopped out, psychologically its not easy to give your positions 10-15% _wiggle_ room, but its seemingly necessary to participate in the big trends.


----------



## chops_a_must (28 June 2007)

*Re: WES surprise the market?*



doctorj said:


> I've had the opportunity to process the idea more over the course of the day and I believe that I was accurate earlier when I said it is likely to be a good thing for WES holders but not without significant challenges.  The success of Myer after being bought suggests that experienced retailers with good supply chain management can extract significant value from the old CML businesses.  WES has both in buckloads in their proven success with Bunnings.



I may be wrong... but didn't WES own FAL at one stage? I seem to remember something about that.

Anyway... it appears WES are now a shoe in to get Coles:


> Ownership review update
> Coles Group said that TPG, Carlyle and Blackstone have advised today
> that they will not be submitting any offer or proposal in relation to the
> company on Saturday June 30, 2007.
> ...




As Homer would say, "the two sweetest words in the English language, de fault, de fault!"

Hard to see how the coles board or shareholders could refuse now. WES would have the power to block any splitting. And I wonder if WES are buying anymore on this weakess below their offer? I'd say yes. What a savvy and intelligent board. Another coup for WA. We can't do anything wrong at the moment.

Oh... and also... the WES SP is going ok. 

Cheers,
Chops.


----------



## chops_a_must (2 July 2007)

Both WES and CGJ are in a trading halt.

You would expect that this means the coles board have accepted the offer, as WOW aren't in a trading halt. Shall be interesting none the less.


----------



## Bluebeard (2 July 2007)

Anyone reckon that 12 months down the track Woolworths will line up with a bevy of private equity groups and try and knock over Wesfarmers now. For Woolworths theyd have the opportunity in one grab to nail Bunnings, Target and Officeworks whilst letting the private equity teams take over the rest of the Westfarmers group including the supermarkets, Kmart, the gas, coal businesses and the other bits and pieces theyve got.


----------



## morlock (2 July 2007)

Bluebeard - How would woolies benefit from doing so? If they were interested, why not bid for Coles?

I doubt Wesfarmers would sell.


----------



## CanOz (2 July 2007)

Bluebeard said:


> Anyone reckon that 12 months down the track Woolworths will line up with a bevy of private equity groups and try and knock over Wesfarmers now. For Woolworths theyd have the opportunity in one grab to nail Bunnings, Target and Officeworks whilst letting the private equity teams take over the rest of the Westfarmers group including the supermarkets, Kmart, the gas, coal businesses and the other bits and pieces theyve got.




I think the ACCC might get a bit cranky about that one. There's far too little competition in the retail food industry as is, i can't even imagine the two fo them together...those poor suppliers.

Cheers,


----------



## Buster (2 July 2007)

Hey Fella's,

I'm no expert but it seems to me that WES may be paying a little too much for Coles etc..  The blogs all call the hedge fund mess in the US the reason why many of the Private Equity mobs walked away, but there were quite a few interested parties sniffing around initially and they all turned thier nose up..  

I'm tipping that the WES SP will soon return to the levels prior to the announcement that they were bidding for Coles, and may even slip further if  the real reason the Private Equity mobs shunned the deal was because the books contained some creative accounting with some wishful thinking thrown in..

Just my .2c anyway..

Regards,

Buster.


----------



## reece55 (2 July 2007)

Well, we will only know in due course......

And in reality, if they are paying too much, it's majority scrip, so it shouldn't be a problem.

Put it this way, they are the private equity group on the ASX that you can actually buy - great brands and who knows, maybe there are synergies here that WES can capture by co branding, rationalization, etc.

Still, love it how the guys painted the spin - first page "it's value accretive". Yep, ok, based on your DCF model, a tad subjective don't you think? At the moment, it is definitely value destructive in the interim (i.e. they are paying a much higher multiple based on future maintainable profits IMO).

This is likely to dampen WES's share price performance till at least October IMO until the scheme meeting goes through. However, in the future, they could really turn the old Coles Group around. I mean, how bad can you really do with the number 2 position in supermarkets in Australia - it's really a recipe to make money if you strategically manage it right!!!

Cheers


----------



## Sprinter79 (2 July 2007)

Coles needs more shopfronts, more exposure. WES can use some the land associated with Bunnings and the mob that looks after that holding can free some up. Just around my place, there is a huge Bunnings with a massive carpark PLUS an underground carpark that doesn't get used. I can see a Coles getting put there, considering that there are 4 Woolies and only 1 Coles in a stone's throw of where I live.


----------



## ROE (3 July 2007)

WES is paying too much for this dog and I think Goyder makes a big mistake
and this would be the beginning of the end for him.

to make Coles profitable they have to growth it by 15% a year for a while
retailing is a very competitive in order for them to growth that fast they have to steal Woolies customers and I dont think they can do that in any time soon. 

it has to be some sort of price war going on to steal customers plus according to Woolies ex-CEO Coles and WES dont have an efficient IT and Logistic system in place and they are far behind Woolies in that area.

I work in IT and I can tell you it's a very very difficult job to integrate IT systems and make them work efficiently ..it takes many years of hard work and trial and errors...and I think Goyder may think it's an easy job to undertake but he will soon find out it's a daunting job and with IT skills shortage nation wide where is he going to find the people?


----------



## Garpal Gumnut (8 July 2007)

I'm a bit more bullish on WES than many on this thread. I'm thinking of adding to my holdings at the 50% retracement from the Aug 2006 low to the recent high. Any ideas from a technical viewpoint on this strategy. 

Garpal


----------



## theasxgorilla (8 July 2007)

Garpal Gumnut said:


> I'm a bit more bullish on WES than many on this thread. I'm thinking of adding to my holdings at the 50% retracement from the Aug 2006 low to the recent high. Any ideas from a technical viewpoint on this strategy.
> 
> Garpal




The strategy has merit, in the sense that if you buy a confirmed low at around the 38.2% to 50% retracement level you are probably entering at a good R/R level.  But volatility is way up in this giant ATM and the price action of the last few days has been volatility in the wrong direction, representing risk to my position! 

I'm fully loaded on this one...and got in early with the large part of my position, but if i wasn't loaded already I would not be adding to my position.  WES is a battleground and its not difficult to see who won the last round.

IF prices stablised and went sideways around the 38.2% or 50% level you describe, then took off again I might add to the position (if I were you) as it takes off and confirms the low...but I'd need to see a confirmed low around these areas before committing more to this one.  *Buying blindly at this level regarless of confirmed lows, comfirmed holding of support and a confirmed strong upward movement (through signficiant resistance???) out of the low would not suit me.*

Key (as always) are the _real_ support/resistance levels.  In this instance the 50% level co-incides with real major support/resistance at $40.10 (represented by the pink line).  It will be interesting to see if price pulls up at this level...as it clearly has not respected the two prior levels, one of which included the previous ALL TIME HIGH...and the all time highest daily close.  Price below the red line is terminal IMO, but I'll be out before then!


----------



## Garpal Gumnut (8 July 2007)

theasxgorilla said:


> Key (as always) are the _real_ support/resistance levels.  In this instance the 50% level co-incides with real major support/resistance at $40.10 (represented by the pink line).  It will be interesting to see if price pulls up at this level...as it clearly has not respected the two prior levels, one of which included the previous ALL TIME HIGH...and the all time highest daily close.  Price below the red line is terminal IMO, but I'll be out before then!




Thanks asxgorilla,

I did a semilog chart on WES back to 1990 on monthly data. 

It seems to have travelled in a channel as per attached chart. Its spent over 2 years recently travelling nowhere in a consolidation pattern, and in the process moving "down" this channel. 

The lower parallel line may be a good indicator of when to get out if it doesn't continue its upward trajectory. 

Interestingly it seems to respect "zero" numbers 10, 20, 30, 40 where they function as resistance and support for WES.

Trade well.

Garpal


----------



## Garpal Gumnut (21 July 2007)

I continue to look at WES and for a few moments last week on all the negative fundamental news considered selling out. 

Then I looked at the charts again. 

Its now at a 38% retracement from Aug 2006 and approaching a previous resistance level. 

The first chart below shows this.

The second continues on my theme of channels with WES, on a weekly chart.

I've a longer term view on trading/investing than many on the forum., so my view is skewed to longer term.

The 50% retracement would be about $39, at which it has previously shown resistance. I may add to my holdings between $37 and $39.

Garpal


----------



## theasxgorilla (21 July 2007)

For a giant like WES to breakout like it did was a God-send IMO.  So in one sense this retracement ought not be that much of a surprise.  Yet no matter which way you cut it the current price activity is negative.  My positions are still in the black, but it doesn't help psychologically that they were _really_ in the black before!


----------



## Julia (21 July 2007)

I suspect their will be some hesitation about buying in WES until it becomes clear that the Coles takeover is going to be definitely advantageous.
If WES can indeed turn Coles into the sort of success story that is Bunnings, then both should be worth having.  In the meantime, I'll stick with WOW.


----------



## clowboy (21 July 2007)

Julia said:


> I suspect their will be some hesitation about buying in WES until it becomes clear that the Coles takeover is going to be definitely advantageous.
> If WES can indeed turn Coles into the sort of success story that is Bunnings, then both should be worth having.  In the meantime, I'll stick with WOW.





To early really yo be factoring coles into the eqation, I mean at this stage the deal isnt even a go.  The CEO of westfarmers seems dead set on it though, think there will be much turbulance with the westfarmers share price over the next few years.

One thing I hold against wesfarmers is I dont BELIEVE they have factored the true amount of time and money needed to turn coles around, however they are the kind of company to be in it for the long haul.


----------



## ROE (28 July 2007)

clowboy said:


> To early really yo be factoring coles into the eqation, I mean at this stage the deal isnt even a go.  The CEO of westfarmers seems dead set on it though, think there will be much turbulance with the westfarmers share price over the next few years.
> 
> One thing I hold against wesfarmers is I dont BELIEVE they have factored the true amount of time and money needed to turn coles around, however they are the kind of company to be in it for the long haul.




I don't think WES can pull the deal off at the current closing price.
Both party can pull out at any time if WES trading at the current level or below in near future and the reprice of debt risk may make WES reconsider


----------



## GRaeN (15 September 2007)

Hi guys, my first post!

What do you think about buying into WES now? 

To my novice eye I think it is about to improve in share price, especially with the ex-dividend date approaching, and the Coles purchase seeming to near completion.

Interested in hearing your thoughts.

GRaeN


----------



## Fool (1 November 2007)

hey Graen,

yeah I im long on WES with a cfd. the dividend will be nice, especially considering cfd's get it the day after ex date 




GRaeN said:


> Hi guys, my first post!
> 
> What do you think about buying into WES now?
> 
> ...


----------



## ta2693 (2 November 2007)

Fool said:


> hey Graen,
> 
> yeah I im long on WES with a cfd. the dividend will be nice, especially considering cfd's get it the day after ex date




I do not get it. would the price of CFD be decreased after ex date. and the difference is same as the dividend you get?


----------



## Fool (2 November 2007)

yeah it drops but its all about timing, when you get in and when you get out, i think watch tomorrow for a good chance to get it, US futures are falling...

i will be watching for about $43.40s


----------



## greenfs (8 November 2007)

My broker is in Shanghai, China at present on business where today he with others  received a presentation from the head of Citigroup regarding this share.

The presentation included a projection that the share price may make $80 within 2-3 years with one of the key driver being the expected increased revenue and profit from coal sales, which I understand make up 35% of income sources pre-Coles takeover. His visit to China has confirmed that spot prices in China are in the process of increasing 20% as we speak with more to come later.

Given the sp dipped substantially today to <$40, this to me now looks like a good buying opportunity. In this regard, I note that another financial planner has separately indicated that he had clients buying up big under $40. The same financial planner had his clients also buy substantially when BHP bottomed at $31 in mid August 2007.

I am presently only a small investor in this company but will tomorrow increase my portfolio's exposure from 2% to more like 20%.

A copy of the graph is provided for information purposes.


----------



## doctorj (8 November 2007)

Is the presentation available?  I'd love to know where they find all that extra value in the near term with coal.  Seems a little suss to me.


----------



## michael_selway (8 November 2007)

greenfs said:


> My broker is in Shanghai, China at present on business where today he with others  received a presentation from the head of Citigroup regarding this share.
> 
> The presentation included a projection that the share price may make $80 within 2-3 years with one of the key driver being the expected increased revenue and profit from coal sales, which I understand make up 35% of income sources pre-Coles takeover. His visit to China has confirmed that spot prices in China are in the process of increasing 20% as we speak with more to come later.
> 
> ...




35% is still not much % wise!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 208.1 203.8 233.1 233.9 
DPS 225.0 200.0 214.5 216.5 *

thx

MS


----------



## noirua (13 November 2007)

A test now for Wesfarmers as they move to test the $40 level and hopefully don't descend back to the all important $38 level.  May be a little more upside as the Coles Group situation continues to be evaluated and talk of better times on the booming coal front may help sentiment. Hopefully, may move back to test the 2007 high point.


----------



## Garpal Gumnut (21 December 2007)

Much as I abhor fundamentals, I must relate the following inside information on WES.

I have long been a Woolies shopper but decided today to get a few xmas essentials from the local Coles. 

The change since I was last in there 6 months ago was phenomenal. The check out chicks were alert and plentiful and there were back store staff actually in the aisles, something which distinguished Woolies from Coles in the past where the latter were presumably previously having durries and discussing their sick leave in the carpark. 

Has WES started applying some hot iron in the local stores? or had someone put some speed in their water.

If this continues , I might let WES settle back towards $34 where it looks to be going chart wise and head into it again.

Any info would be appreciated.

gg


----------



## clowboy (21 December 2007)

What store?

Somewhere in townsville?

So far no changes have been made at store level, christmas out the way is the number one priority ATM.  Rumors of middle managment changes are plenty ATM.

Only change in terms of morale is HOPE, people are expecting alot from new ownership.

WES have announced a christmas "bonus/gift" to all permanent (long serving) employees of $25 which has been seen as a "start" and more than Coles ever done.

Like I said alot of people hoping for a brighter future


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## Garpal Gumnut (21 December 2007)

clowboy said:


> What store?
> 
> Somewhere in townsville?
> 
> ...




Yes mate,

The Annandale Central  store in Townsville, near Lavarack barracks. Its a big growth area and Woolies are putting in a huge development about 2ks down the road, and Myers are opening up about 2k the other way in 18 months in a Stockland redevelopment with another Woolies already there, so the Coles mob will need to get the proverbial finger out.

gg


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## clowboy (21 December 2007)

Although no one would ever admit it, 95% of coles problems are not store fault

It's a case of **** rolls downhill and the store is the bottom of the list so it is a cespool.

things will change, the question is, how quickly?


----------



## Garpal Gumnut (21 December 2007)

clowboy said:


> Although no one would ever admit it, 95% of coles problems are not store fault
> 
> It's a case of **** rolls downhill and the store is the bottom of the list so it is a cespool.
> 
> things will change, the question is, how quickly?




A very valid point, all those Age readers working out of that compund in Melbourne, the head honcho Fletcher stated he'd never been in a supermarket, or some such silly statement,  prior to taking on the job. The trolley boys today could have run the joint better than its been done.

Roll on WES thats what I say.

gg


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## 2020hindsight (29 December 2007)

just for the record 
here's WES for the last 2 years (High Low Close) + averages 
Also WES vs XAO for last 12 months (candlestix) + ditto (percent indicates relative preformance campared to datum of XAO)

PS I plan to do this to a few stocks - please feel free to either 
a) help out and divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)


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## Smurf1976 (29 December 2007)

Went to Kmart to buy a microwave recently. Sounds simple enough but the bottom line is that no way was I going to be allowed to buy the only one of that type they had in the shop. 

Nope, that one's to sit on the shelf and I'll have to wait for the stock to arrive if I want to buy one. When will it arrive? The staff didn't seem to know.

A quick check revealed that 50% of all microwaves, 100% of washing machines and 100% of clothes dryers were out of stock. And plenty of other "out of stock" items elsewhere in the store too. This was checking 2 separate stores by the way too so it's not isolated to a single store.

Went to Big W and bought a better microwave for less. In stock and they had plenty of them.

I'll give Coles credit where it's due though. It's always a quicker trip through the checkout there because there isn't a queue. But then it's easy to not have a queue when your customers have gone elsewhere.

Wesfarmers have a LOT of work to do to fix this. Getting products in the shops being a good place to start.


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## robots (29 December 2007)

hello,

the thing that is killing coles is price, I can get good natural milk $2.20/2lt at safeway/woolies, coles closest is $2.68/2lt, and translate similar differences thru to other products and presto no-one walks thru the door

wes is looking for product for the Bunnies stores though, in 5yrs or so, groceries will be walking out the door, maybe not everything but a lot of stuff

thankyou

robots


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## dalek (30 December 2007)

There should be little doubt that WES has the ability to turn the Coles organisation around after it's outstanding performance with the BBC Hardware basket case. More valid questions may be about to their ability to control the many other influences of economy, debt, shareholder/market patience, but their skills in merchandising, marketing and building a culture are beyond doubt.
When you look at what the market is prepared to pay for unrealised potential
 in some cases (see FMG) it is astonishing that the biggest retail transaction in AUS history and it's available upside, is treated so sceptically. 

Yes, I am a former WES / Bunnings member and shareholder but make no mistake, I would sell tomorrow if I thought there was no value.
No sentiment here !!


----------



## greenfs (31 December 2007)

I am looking for someone willing to give me odds about WES share price as at 01/01/2010. I would like to back the price at being at or above $70. Who will offer the best odds on the other side of the equation and how much is the stake?

To keep it civilised, we could make the wager in Crownie's rather than $$$.


----------



## noirua (31 December 2007)

I've held this stock since buying back in January last and am wondering whether it is worth holding on. If it gets back to $46 I'm out, as it appears to be a bit like a lumbering elephant these days.
All the old talk a year ago about a break up seems to have gone out of the window now.


----------



## robots (31 December 2007)

hello,

its interesting to note that since Mr Chaney left WES has struggled, yet NAB over that time has done reasonably well

coles needed to be snapped up by a "quality management team", think many still think a dog but just in a new company structure and therefore WES is coping that mantra

thankyou

robots


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## reece55 (20 February 2008)

*WES - Wesfarmers*

Big move today on reasonably high volume today - WES is not normally a big mover like this, any news up ahead.....

They have the unfortunate issue of having to re-negotiate the debt they have taken on to acquire Coles shortly, perhaps interest rate issues????

I note CBA have ceased to be a sub holder, perhaps re balancing in light of lower earnings post the Coles acquisition....

Cheers


----------



## reece55 (23 February 2008)

Not a bad little result from WES, with strong coal prices clearly offsetting the initial dilution of Coles..... There is no doubt that Wesfarmers have big ideas in how to turn the Coles business around and if anyone can do it, WES can...

I tell you what though, the slide on their interest cover really showed that they have been on a spending spree and need to bed down their acquisitions. WES started 2004 with 22x interest cover, now they are at about 5x..... not the best environment to dramatically increase gearing, is it!

Cheers


----------



## Kauri (19 March 2008)

A story I heard... can't find anything solid... yet... but ...
 Wesfarmers may have to pay a hefty credit premium to refinance $A4 bln in debt for its Coles Group takeover.
Cheers
...........Kauri


----------



## sassa (19 March 2008)

Kauri said:


> A story I heard... can't find anything solid... yet... but ...
> Wesfarmers may have to pay a hefty credit premium to refinance $A4 bln in debt for its Coles Group takeover.
> Cheers
> ...........Kauri




As reported in Money Morning-

Wesfarmers (ASX:WES) could be the latest victim of the downturn in the credit cycle. The massive conglomerate has businesses ranging from coal mining to insurance, to supermarkets. No-one has ever thought the companys assets to be anything less than blue-chip quality. 

But that doesnt matter, does it? 

No. In a credit contraction, assets are assets and debt is debt. Further distinctions are a bit blurry. In the end, creditors dont care what type of assets you have. They care about the quality of your assets. The just want their money back. If you cant refinance your debt, it wont matter if you have all the tea in China on the top end of your balance sheet. There is, in fact, no caffeinated beverage on the planet that can save a company from the debt collector. He doesnt drink muchjust squeezes blood from stones. 

Wesfarmers has stumbled. To buy out Coles last year, it coughed up a record AU$18.2 billon. Now its having trouble finding someone who wants to refinance part of the AU$10 billion in loans it took out for the deal. The companys lenders have raised their interest rates. The going rate will now be as much as 2% higher than what Wesfarmers thought it would be. That adds up to a total of AU$280 million. 

Heres the problem. Wesfarmers hasnt agreed to the terms yet, so it has to decide whether to cough up extra cash...or look elsewhere for funds. Its really not a great choice to have to make.


----------



## sassa (19 March 2008)

Sorry,forgot link on last posting.Here it is-

http://www.moneymorning.com.au/20080319/debt-problems-spread.html


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## josjes (17 April 2008)

Wesfarmers requested trading halt due to media speculation about a potential equity capital raising.

The Australian Financial Review newspaper today reported Wesfarmers was planning a multi-billion dollar equity raising to refinance short term debt. 

That would be bad news for current share holders wouldn't it ? Dilution of capital base etc. 

Does anyone know snippet of the capital raising and what's it likely to be ?


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## Kauri (17 April 2008)

Kauri said:


> 19 March...A story I heard... can't find anything solid... yet... but ...
> Wesfarmers may have to pay a hefty credit premium to refinance $A4 bln in debt for its Coles Group takeover.
> Cheers
> ...........Kauri




 Maybe it's coming together?? 
$4bln at least is potentially needed from somewhere, as I haven't heard of them refinancing... yet..

Cheers
..........Kauri


----------



## reece55 (21 April 2008)

Kauri said:


> Maybe it's coming together??
> $4bln at least is potentially needed from somewhere, as I haven't heard of them refinancing... yet..
> 
> Cheers
> ..........Kauri




Well, looks like WES decided the cost of equity would be a lot cheaper than that of debt - a sensible decision, especially with their interest cover at the moment! Here is what we have all been looking for (taken from WES's announcement this morning):

The $4.0 billion refinancing will be completed through a combination of:
•
A $2.5 billion equity issue to be conducted as a 1 for 8 accelerated pro-rata entitlement offer to shareholders at an Offer Price of $29.00 (“Entitlement Offer”). The Entitlement Offer has been fully underwritten;
•
New commitments on customary terms to refinance the remaining $0.8 billion of the Coles acquisition bridge loan until December 2009, which has been secured at average margins of approximately 100 bps including fees; and
•
The US$650 million (A$0.7 billion) 5-year bond issue announced on 4 April 2008.
In addition, Wesfarmers has taken the opportunity to secure commitments to renew its $1.0 billion working capital facility. The average margin on all one to three year debt financing is less than 100bps including fees.

In the end, this is a positive way of dealing with their issues. But the equity is at a substantial discount to the last trade of about $37.....

Cheers


----------



## SenTineL (22 April 2008)

this is for existing shareholders only?

so no new shares to new investors.......................??


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## reece55 (22 April 2008)

SenTineL said:


> this is for existing shareholders only?
> 
> so no new shares to new investors.......................??




Yep, very sensible little strategy on behalf of the WES board......

Do you really think they would open up a placement to non people who weren't already shareholders when the pricing is 20% below market...

I expect the share price to open up and watch the shorters squeal..... It will be interesting..

Cheers


----------



## ROE (23 April 2008)

I stay away from WES for now .. too much risk for little rewards.
what sort of company initially want to buy Office works, k-mart and a bit of food and liquor all up $4-$5 Billion ..then the private equity walk away because of higher credit ..WES decided to add another 12B to take on the whole lot.

They are clearly not in the financial position to do so and do it any way
they are getting away from their conservative approach and that got me worry
and they are getting away when higher credit hit left and right.

plus Coles is going backward... sale rose 3% and inflation at 4%? aren't they going backward by 1% ??

ACCC also announce today they going to make it easier for oversea chain to setup supermarket to counter Coles and WOW dominant, the environment going to get tougher going forward not easier.

Until WES can show me the money they can run Coles and pay down substantial debt I'm not backing them 

my 2 cents.


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## hangseng (26 April 2008)

ROE said:


> I stay away from WES for now .. too much risk for little rewards.
> what sort of company initially want to buy Office works, k-mart and a bit of food and liquor all up $4-$5 Billion ..then the private equity walk away because of higher credit ..WES decided to add another 12B to take on the whole lot.
> 
> They are clearly not in the financial position to do so and do it any way
> ...





Climes 'Stockval' agrees with you. Latest out has Wesfarmers potemtially valued at around $27 in 2009 if it keeps tracking as it has been of late.

It will be interesting to see what the market does when the $29 issue comes out. I can't see the current $36 holding.


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## butterchops (12 May 2008)

So given what hangseng and ROE have mentioned, whats the verdict on the 1 for 8 share offer? Worth the investment or too risky?

Not sure whether WES presents a sound long term investment at the moment.  Current share price is $38.12 so it seems there has been some short term boost from the share offer.  At the very least this offer could give reasonable short term returns?


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## questionall_42 (12 May 2008)

hangseng said:


> It will be interesting to see what the market does when the $29 issue comes out. I can't see the current $36 holding.




SP has held above $36 since it came out of the trading halt. Strong vindication for the 1 for 8 entitlement offer - no tanking in the SP.



butterchops said:


> So given what hangseng and ROE have mentioned, whats the verdict on the 1 for 8 share offer? Worth the investment or too risky?
> 
> Not sure whether WES presents a sound long term investment at the moment.  Current share price is $38.12 so it seems there has been some short term boost from the share offer.  At the very least this offer could give reasonable short term returns?




The concept of a long-term investment is so incredibly dependent on how you define "long".  One year, 5 years, forget it and hold it forever... Wesfarmers have a great record and I for one believe that Coles will turn around under their direction. However, the only reason why I am going to take this offer up is that it offers immediate returns - the sp will not tank after the issue; if it does decrease, it won't be below $29 - you have an immediate "risk free"(?) return on investment.

Good luck.


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## ROE (14 May 2008)

I'm thinking of shorting WES once it reach $40 ...they have massive interest bill and I cant see they grow Coles more than 10% a year with WOW keep stalking them. 

I cant say for anyone else but I personally hardly shop at Coles knowing their dirty tactics about price manipulation and discount, and the stuff about Coles express fuel last week certain re-enforce my believes all along and I think a lot of people treat Coles with caution.

Until WES can change the whole Coles culture (it could take years or never will) it going to be tough for Coles to take on WOW and reclaim market share.

I reckon WES may underestimate how hard it is to turn around the culture
and building an IT logistic system that can rival WOW.


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## ROE (22 August 2008)

Man Coles performance is shocking despite all the talk up.
nearly $17 Billion in Revenue and cant even make 500M of EBIT
it's like 2-3 cents Coles make in a every Dollar turn over before interest & tax

How much did WES pay for Coles? $15 Billion or something
let see if interest was at 8% on 15B it's like 1B plus in interest payment alone
but lucky for WES it didn't borrow that much so down goes the return on equity rate... they wont have much equity left if Coles keep performing like this. 

That $29 buck in equity raising start to look real shaky ...


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## ROE (26 September 2008)

Let me keep you guys inform on WES and not broker 

I smell fishy 

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=97BE9F03-1871-E587-E118FD73DA3E6E40


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## bellenuit (27 September 2008)

Can anyone suggest why the Wesfarmers Partiallly Protected Shares (WESN) are trading only marginally above, or even sometimes at a discount to, the Wesfarmers Ordinary Shares (WES). For instance, today they closed at a discount: WES = $29.28 and WESN = $29.11.

Considering that WESN have exactly the same entitlements as WES in every respect (dividends, voting rights etc.), can be converted at the option of the shareholder to WES shares at anytime at no cost, but additionally have a variable degree of price protection when WES is trading under $43.92, they should command a substantial premium IMO. These are the key terms:

_If the two month VWAP for Wesfarmers Ordinary Shares is greater than $35.14 but less than $43.92 at the date of the Lapse Notice, holders of Wesfarmers PPS will receive a bonus issue of Wesfarmers Ordinary Shares (up to 0.25 Wesfarmers Ordinary Shares per Wesfarmers PPS) such that the total value of Wesfarmers Ordinary Shares received will be $43.92. If the two month VWAP for Wesfarmers Ordinary Shares is greater than $43.92, holders of Wesfarmers PPS will not receive any bonus issue.

However, if the two month VWAP for Wesfarmers Ordinary Shares is below $35.14 on the date of the Lapse Notice there is no additional price protection and Wesfarmers PPS Holders will receive the maximum bonus issue of 0.25 Wesfarmers Ordinary Shares per Wesfarmers PPS._

As I read the above and it corresponds to the examples in the prospectus, you are guaranteed a minimum $43.92 in WES shares for each WESN at the lapse date when WES is between $35.14 and $43.92. When WES is trading under $35.14 then you will get 1.25 WES for each WESN at lapse date conversion. So at today's closing price of $29.28 for WES (assuming that at conversion time that was the two month VWAP for WES) each WESN would convert to 1.25 WES, or $36.60 in share value. Yet it is only commanding $29.11 in the market. 

I don't understand why it doesn't command a premium of 25% of the WES price, when WES is trading under $35.14 and a gradually reducing premium when WES is above $35.14, cutting out when WES reached $43.92. 

The Lapse Date is about 4 years following the WESN issue (so 3.5 years from now) and may be extended if the ASX200 index sits under 6,500 around that time. So there is a timing issue, but that should be immaterial to the premium it should command. The only clause in the Ts&Cs that worries me is the following, but I can't see how that might override the conversion terms mentioned above.

_In the event that additional shares are issued in respect of Wesfarmers PPS, the total number of additional shares to be issued will be up to approximately 38.5 million Wesfarmers Ordinary Shares._

Thoughts, anyone?


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## bellenuit (27 September 2008)

I should clarify that the conversion to WES shares at the discretion of the shareholder (2nd paragraph) prior to the Lapse Date is a 1 to 1 conversion. The conversion rates in italics from the Ts&Cs related to conversions initiated by Wesfarmers at the Lapse Date.


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## 3MT (28 September 2008)

ROE said:


> Let me keep you guys inform on WES and not broker
> 
> I smell fishy
> 
> http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=97BE9F03-1871-E587-E118FD73DA3E6E40




here's another perspective on the Coles acquisition. they are getting the right team on board.

http://www.insideretailing.com.au/articles-page.aspx?articleType=ArticleView&articleId=3709

You can only steer a big ship slowly. There is much more potential in coles than woolworths only because coles has so much more to improve on. 

interest on debt is a concern though.


----------



## noirua (28 September 2008)

I've been holding on to Wesfarmers for a few years and just look at this mixed up giant as being several years away from sorting the Coles situation out.
Meanwhile, they pay a $2.05 fully franked dividend which works out as good interest at $29.28 a share, stock price.


----------



## Moneybags (28 September 2008)

noirua said:


> I've been holding on to Wesfarmers for a few years and just look at this mixed up giant as being several years away from sorting the Coles situation out.
> Meanwhile, they pay a $2.05 fully franked dividend which works out as good interest at $29.28 a share, stock price.




Exactly, which is why I bought another swag on Friday, could go lower of course but anywhere around $29.00 (recent entitlement price ) is fair value IMO.

MB


----------



## chops_a_must (28 September 2008)

Moneybags said:


> Exactly, which is why I bought another swag on Friday, could go lower of course but anywhere around $29.00 (recent entitlement price ) is fair value IMO.
> 
> MB




I wouldn't be surprised at all if they have to cut their divvy to pay down debt. I think that would be prudent.


----------



## Moneybags (28 September 2008)

chops_a_must said:


> I wouldn't be surprised at all if they have to cut their divvy to pay down debt. I think that would be prudent.




Fair comment chops, I wouldn't be surprised either......but I'm happy with my purchase for now.......not quite bottom drawer material in this climate.

MB


----------



## noirua (28 September 2008)

chops_a_must said:


> I wouldn't be surprised at all if they have to cut their divvy to pay down debt. I think that would be prudent.



Maybe they hope the dividend reinvestment plan will draw the crowds.  The 1% discount is very mean as CSR used to give 5% in the 1990's.


----------



## chops_a_must (28 September 2008)

Moneybags said:


> Fair comment chops, I wouldn't be surprised either......but I'm happy with my purchase for now.......not quite bottom drawer material in this climate.
> 
> MB




I prefer it to WOW certainly, for my own reasons.

But I'll be looking below sub 25 for bottom draw purchases. If it doesn't get there, no big deal.


----------



## ROE (29 September 2008)

chops_a_must said:


> I prefer it to WOW certainly, for my own reasons.
> 
> But I'll be looking below sub 25 for bottom draw purchases. If it doesn't get there, no big deal.





$20 is where I'm seeing it heading... with their high debt position any movement in resource price will impact them pretty hard.

PE of 16 is fairly high for bear market and with a dog flea like Coles


----------



## dan-o (11 October 2008)

This is heading toward the $20 mark mentioned in the previous post. Do people think this is great value or just good value because of the market drop?


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## michael_selway (11 October 2008)

ROE said:


> $20 is where I'm seeing it heading... with their high debt position any movement in resource price will impact them pretty hard.
> 
> PE of 16 is fairly high for bear market and with a dog flea like Coles




lol good point

*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS 179.5 260.9 264.0 260.0 
DPS 200.0 210.0 228.5 219.3 *

thx

MS


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## ROE (11 October 2008)

dan-o said:


> This is heading toward the $20 mark mentioned in the previous post. Do people think this is great value or just good value because of the market drop?




I have my eye on WOW rather than WES  .. I look at WES when they can prove to me they can change the Culture of Coles.

Speaking of culture I run into a building maintainable guy at one of the Coles building (owned by Coles) a few weeks ago.  The door has been broken for months (3 months or more) and they stick a piece of paper said close the door after you enter and exit and make sure it close.

One day I walk out and forgot to close it cos something was on my mind and I didnt pay too much attention to the notice, the guy hassle me and said why don't you do what the sign said. 

He had me fire up and I response, I said dude you got a problem here it been happening for months and you don't fix it and you try to pass the buck to someone else and make them close the door? we argue for five minutes and I keep repeating, it's your building, it's your problem, fix it, take ownership.

He walked away wasn't too happy and curse the hell out of me 

And the door still broken last time I check 2 days ago
So the culture still as bad as ever.

Company cant be doing good when you have work force that doesn't give a damn about their job.

WOW is still expensive in my book so until they dropped further I rather buy WOW.


----------



## blinkau (12 October 2008)

I think your quite right with Coles ROE but at what price is WES so low that it discounts the Coles businesses. You could argue that as WOW trades at such a premium that its price in fact makes it a speculative investment.  I agree that at say $45 Wesfarmers was expensive and had no real room for error with its high interest bill and the fact that it still had yet to turn around the business. 

You can now buy Wesfarmers at a discount to its book value. With commodities coming off, the Coles purchase receiving negative publicity and the general market trending downwards wouldn't this be a decent time to take a closer look at it. This is not to say that it will turn around or that even at its current value its cheap but it might be worth an in depth look.


----------



## ROE (12 October 2008)

blinkau said:


> I think your quite right with Coles ROE but at what price is WES so low that it discounts the Coles businesses. You could argue that as WOW trades at such a premium that its price in fact makes it a speculative investment.  I agree that at say $45 Wesfarmers was expensive and had no real room for error with its high interest bill and the fact that it still had yet to turn around the business.
> 
> You can now buy Wesfarmers at a discount to its book value. With commodities coming off, the Coles purchase receiving negative publicity and the general market trending downwards wouldn't this be a decent time to take a closer look at it. This is not to say that it will turn around or that even at its current value its cheap but it might be worth an in depth look.




I see it differently, WES was a good company before they took over Coles.
Coles can be a massive liability to them if they don't do it right and could even bring WES down.

Because of Coles they have massive interest Bill, their share holders is diluted
their return on equity is decline at a rapid pace.

and Coles distract them away from their other business that are doing well.

To me Coles is a liability not an asset so unless it trades around PE of 10 or below in this market it's too risky .

So unless WES is run by Jack Welch, Goyder is a bit of a gamble


----------



## chops_a_must (12 October 2008)

ROE said:


> I see it differently, WES was a good company before they took over Coles.
> Coles can be a massive liability to them if they don't do it right and could even bring WES down.
> 
> Because of Coles they have massive interest Bill, their share holders is diluted
> ...



I agree.

WES was a great company, and still may well be, before they took over Coles.

It's pretty clear they well and truly over paid for Coles. It has left them with a lot of debt, and doesn't allow for the fact Coles may need significant capital in the future to turn it around. There was no margin for error with the take over, and now there is no margin for error with the turn around.

By the way, what is, and how do you calculate its book value? Doesn't make a whole heap of sense to me as future liabilities are not very clear at this stage.


----------



## blinkau (12 October 2008)

It appears true that they overpaid and that I agree can damage them. However they have also stated that the turn around plan is 5yrs isn't it? I mean its hard to judge their success so soon. I do see that they have wrecked their return on equity and have diluted share holders while pulling up a huge bill and overpaying for a business. They have made a mistake however the interesting thing will be to see where the company is in say 6 years from now. 

Its difficult to infer that because a door is damaged in a Coles shop and there are some cranky people that the business is doomed. I mean how many people complain about the employees at supercheap, the service at CBA etc. Each business has its own problems. 

I haven't done an in depth analysis and I do agree it doesn't appear to be a good investment but I think the frequent Wes/Coles debate may at some stage be overdone. I will be very interested to see if and how it corrects itself only time will tell. 

Isn't Costco due in Australia at some time as well?


----------



## ROE (13 October 2008)

chops_a_must said:


> By the way, what is, and how do you calculate its book value? Doesn't make a whole heap of sense to me as future liabilities are not very clear at this stage.




Book value are crap these days I wouldn't put too much faith into them unless they have a lot of cash to back it up.

look at seven last week  it trades below the available cash it has on hand in the bank now that what I called a below book value stock 

company trades below 1.2B and it has 1.3B CASH in the bank.

Accounting over the year has change and book value now account a lot of it to goodwill (Premium you pay for take over or brand name)

all is good if you have a decent brand like Coca Cola or Porsche where the brand carries a premium on the price you sell and stands for quality...

but majority of goodwill I call them wasted money  and shouldn't be in the book value at all.


----------



## ROE (13 October 2008)

blinkau said:


> It appears true that they overpaid and that I agree can damage them. However they have also stated that the turn around plan is 5yrs isn't it? I mean its hard to judge their success so soon. I do see that they have wrecked their return on equity and have diluted share holders while pulling up a huge bill and overpaying for a business. They have made a mistake however the interesting thing will be to see where the company is in say 6 years from now.
> 
> Its difficult to infer that because a door is damaged in a Coles shop and there are some cranky people that the business is doomed. I mean how many people complain about the employees at supercheap, the service at CBA etc. Each business has its own problems.
> 
> ...




I predict Coles will do more harm to WES than good, I give credit to Coles Chairman to extract the most values for Coles share holders from WES knowing it's a dog of a company and there is company stupid enough to pay a high premium for it and that stupid company is WES and its CEO/CFO and Chairman. 

Remember WES couldn't refinance(or the lender want high teen for their interest) last year so they go to share holders for more money in equity raising and look what happen to that $29 

..more share holder value is destroyed..they got a few more Billion to go toward 2009

and look like who ever want to refinance wants more than 11% they charged last year for 600 Mill they borrow because the company is getting worse each day..

so they may force to go back to share holders for more money
but who the hell stupid enough to give them the cash? knowing $29 bucks you gave them last year now worth $22 bucks.

Unless their share price goes back to Mid 30s they facing a prospect of much higher debt and bugger all extra equity raising with existing share holders.

do you see the risk now ...better stick to proven WOW if it drops to $20 or below 

and the broken door and simple trip to the Coles store is sometimes the best information you
will ever get into the running of a company and whether they run a good ship or not.
you may not use it but I do a lot  and it works extremely well for me over the year

I give you an example sometimes 1 or 2 years ago DMP was doing crab, everyone discard them, analyst doesnt like it.. then one day I went to a DMP store to pick up some pizza, the damn store was full of people queuing buying pizza, then a few weeks later I went to the coast damn I saw the same thing there, came back to the store I bought a week later still chock block full.

Well enough for me to discard the bad news around Dominos and start to look at the number
I bought in at $2.27 but nothing but good news since then


----------



## Garpal Gumnut (13 October 2008)

Woolies is better to shop at than Coles, I hold both WOW and WES. 

I still think its too early to count WES out yet. Coles was stuffed by Fletcher and Co , so it may take a bit longer to turn things around.

gg


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## Pager (14 October 2008)

Next on the chopping block ?, or nothing to worry about ?


http://www.bloomberg.com/apps/news?pid=20601081&sid=aewy5nxLTAjI&refer=australia


Oct. 14 (Bloomberg) -- Wesfarmers Ltd., Australia's second- largest retailer, owes A$1.26 billion ($878 million) in borrowings that are due for repayment in less than a year and remains within all its debt covenants. 

Wesfarmers needs to repay or refinance the bank loans, commercial paper, bank bills and bonds as part of more than A$9.5 billion of total borrowings as of June 30, the Perth-based company said today in an investor presentation filed to the Australian stock exchange.


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## drsmith (28 October 2008)

Looking at the Wesfarmers balance sheet recently I noted the high level of goodwill. It will be interesting to see how debt refinancing plays out and whether like some property trusts new equity has to be raised at a deep discount to the current share price.

I don't hold Wesfarmers shares directly but I do have an indirect interest through ownership of shares in Milton Corporation.


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## ROE (28 October 2008)

Coles is just too big and too bad for WES, I said game over man, game over.

When a good company takes on over a sh*t company, what left over is usually
the sh*t  and nothing else.


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## blinkau (29 October 2008)

ROE I think you are making some very bold statements in relation to the future of Wesfarmers upon what appears little analysis of the companies financial position. I haven't thoroughly analysised Wesfarmers and hence wont make any strong statements for or against it. I do believe the Coles part is overdone and yes it appears they have overpaid for it just as Suncorp overpaid when they took on their new insurance business. I would be very keen to know why they paid what they did for Coles and on that date it appears they where victim to speculation. If anyone purchased at $40~ when they had Coles it was now in hindsight foolish to hold on however I believe it would be wise to take another look at the company as at some price it must become 'cheap' Lets hope so anyway! 

Its very easy to make a strong argument against Wesfarmers however in five years I will be very interested to see if they did manage to turn it around. I most certainly wouldn't make it the only stock in my portfolio.


----------



## ROE (30 October 2008)

blinkau said:


> ROE I think you are making some very bold statements in relation to the future of Wesfarmers upon what appears little analysis of the companies financial position. I haven't thoroughly analysised Wesfarmers and hence wont make any strong statements for or against it. I do believe the Coles part is overdone and yes it appears they have overpaid for it just as Suncorp overpaid when they took on their new insurance business. I would be very keen to know why they paid what they did for Coles and on that date it appears they where victim to speculation. If anyone purchased at $40~ when they had Coles it was now in hindsight foolish to hold on however I believe it would be wise to take another look at the company as at some price it must become 'cheap' Lets hope so anyway!
> 
> Its very easy to make a strong argument against Wesfarmers however in five years I will be very interested to see if they did manage to turn it around. I most certainly wouldn't make it the only stock in my portfolio.




Dont mind me too much I go off sometimes  I like WES a lot and that was before Coles  this my takes on comic WES. 

With all their business is firing (boom, bang, slam) with exceptional profit, along comes the Joker Coles and ruin the party and drag WES down... along with its debt.

Because it's other business is doing so well, what happen if Joker Coles partying Culture has not stop and the ship is too heavy to turn and WES fatherly love give too much attention to Coles and start desert other good kids in the family. 

Other business may start to lag and then wham bam comes holy batman WOW and take on sidekick Mitre 10 and start implement their batman magic culture on Mitre 10.

Mitre 10 then send off to fight the Gotham's Penguin Bunnings who just about to own the hardware business. 

It could be a good fight  and when WOW fight someone they like to win
(due to their culture of breeding exceptional in house executives)

people shop at bunnings may go to WOW's Mitre 10 knowing it's low price every day  where WES slogan is lowest price is just the beginning and that all there is just the beginning, not every day 

with debt heavy on there WES side, WOW has little debt it's going to be one hell of a battle and WOW may turn the tides with Bunnings

like with they did with their fore father Coles some decade earlier. History tend to repeat itself in business like the stock market bust and boom.

good bedtime comic story and wouldn't it be funny if it was true 

PS: this is another true scuttle butt ... I was at Bunnings over the weekend picking up some garden hose, in the garden section. This nice old gentleman was a bit lost with all the selection so he grab a Bunnings employee walking by for help..she said I cant help you I don't work in this section and walk off... The Gentleman make the point that even if she doesn't work in this section she should at least help him or get someone to help him...she refuse to help and walk off.

I feel sorry for that gentleman and was pissed off myself at that attitude as well...maybe Coles cancer catch on, who knows.


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## sammy84 (30 October 2008)

Whilst coles is a dog, its still a dog in a duopoly. I'm would be happy to have a horse come second in a two horse race if second prize still pays well


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## chops_a_must (30 October 2008)

sammy84 said:


> Whilst coles is a dog, its still a dog in a duopoly. I'm would be happy to have a horse come second in a two horse race if second prize still pays well



I think you'll find MTS is beginning to feast off the carcass that is the Coles market share, in certain areas.

So no, I don't think it really is a duopoly any more.


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## sammy84 (30 October 2008)

chops_a_must said:


> I think you'll find MTS is beginning to feast off the carcass that is the Coles market share, in certain areas.
> 
> So no, I don't think it really is a duopoly any more.




Is that in relation to food works? I know little about them. I am from metropolitan melbourne, and most of there stores are regional. Is the buisiness model similar to that of coles, and how does it have an adv?

Thanks


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## michael_selway (31 October 2008)

ROE said:


> Coles is just too big and too bad for WES, I said game over man, game over.
> 
> When a good company takes on over a sh*t company, what left over is usually
> the sh*t  and nothing else.




*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS 179.5 251.0 249.7 233.7 
DPS 200.0 200.0 207.0 200.0 *







Yeah not 100% sure which way its heading etc

thx

MS


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## UMike (4 November 2008)

Well its up over 13% the past few days....

Still slightly under valued imo.

Even with the current price the dividend is 8.2% fully franked.


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## noirua (4 November 2008)

UMike said:


> Well its up over 13% the past few days....
> 
> Still slightly under valued imo.
> 
> Even with the current price the dividend is 8.2% fully franked.



The chart sort of shows a double bottom, though it looks like a cup and bottom, not sure that's quite so encouraging.


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## sammy84 (11 November 2008)

Can anyone shed light on what just happened to the price of WES? In the last hour it has taken a little dive whilst the ASX has been gaining. I cant seem to find any information out there why


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## ROE (11 November 2008)

Market correct price as information come available ...

some food for though, America in 30 years in boom and bust, people did not spend less on food and non-durable goods (drink,food etc..)

but this time around, there is a massive cut back on non-durable goods
I say Australia will follow the same path due to massive house hold debt.

now WES holding Coles and paying a massive price for it you can only guess what happen to WES when we hit recession 
not only that it's up against the juggernaut WOW ...


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## Mr Capital (19 November 2008)

Can anyone provide any insight as to how the retail sector, in particular Wesfarmers may go as the lead up to x-mas begins, given these interesting times. 

Thank you.


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## noirua (25 November 2008)

Analysts views on the future of Wesfarmers from the ft:
http://markets.ft.com/tearsheets/analysis.asp?s=AU:WES


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## Johno (27 November 2008)

*Why no WES?*

Was just looking through the "Whats in your portfolio thread" and I see that im one of very few whos holding Wesfarmer.

Im aware that they have a bit of debt and the Coles thing is going to take some work, but still, i would have thought at the current prices of less than $20 that this would be a fairly low risk good buy?

Any thoughts?


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## noirua (27 November 2008)

noirua said:


> Analysts views on the future of Wesfarmers from the ft:
> http://markets.ft.com/tearsheets/analysis.asp?s=AU:WES




The above gives views on the now depressed shares of Wesfarmers. A bad case of indigestion swallowing Coles.

More important at the moment with just 8 days to go, yes, it's voting for Aussie stock Forums http://www.thebull.com.au/the_stockies/forums.html


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## ROE (29 November 2008)

*Re: Why no WES?*



Johno said:


> Was just looking through the "Whats in your portfolio thread" and I see that im one of very few whos holding Wesfarmer.
> 
> Im aware that they have a bit of debt and the Coles thing is going to take some work, but still, i would have thought at the current prices of less than $20 that this would be a fairly low risk good buy?
> 
> Any thoughts?




Don't under estimate the burden of debt, you may have some great asset
but if your debt is greater I be more worry about debt.

As you can see company goes broke because of debt not because they make little profit 

There is rarely any company that goes broke because of no debt, in fact most of these company prosper much faster... Takes WOW, awesome balance sheet and in time like these they prosper where their competitor may dies off and they continue to gain market shares and when the next bull arrive they are ahead of the pack.

debt isn't a bad thing but when you use it badly that is a poison pill for you and WES use their debt very badly


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## Johno (4 December 2008)

Just sold all of my Wesfarmer shares. I was just losing too much sleep over them. The job they have ahead of them with Coles is going to be massive. 

Every time I go shopping at Coles, im amazed at the lack of service and the standard of the shops and staff. It really was a broken buisiness when they bought it at an inflated price. Although the debt isnt anything spectacular, in these times, its a little more than id like. This will be a good one for me to jump on board later on, but for now im looking elsewhere.


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## noirua (10 December 2008)

Wesfarmers report that production is back on target for 6.5 to 6.9 million tonnes of metallurgical coal in 2008/9 at the Curragh mine in Central QLD. Holdup was due to dragline and winch failure.


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## hotbmw (11 December 2008)

I read this on todays Marcus today report:

There is talk of Wesfarmers looking at a $1bn placement at $12 per share – would be a 26.6% discount.


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## Colonel Klink (18 December 2008)

Just wondering what thoughts are re future WES debt refinancing. With US rates heading toward zero or thereabouts, I would have thought this would be fairly positive, assuming someone is still lending!

Coles is seen as this great burden, and maybe it is, but I'm a shopper and as far as a supermarket goes, I don't give a rat's re basic groceries, if I'm at Coles or Woolworths. It is just about which is most convenient at the time.

This whisper about another capital raising at $12 seems a bit ugly, though. Any other sources on that ?
I hold both BTW
Cheers Klink


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## prawn_86 (18 December 2008)

Colonel Klink said:


> Coles is seen as this great burden, and maybe it is, but I'm a shopper and as far as a supermarket goes, I don't give a rat's re basic groceries, if I'm at Coles or Woolworths. It is just about which is most convenient at the time.




I wonder what % of people are like yourself, it would make for an interesting study.

Personally i think all coles stores are absolute ****e and will not go to one unless i absolutely have to. We buy all our fruit and veg from a grocer, meat from the local butcer, and the rest from Woolies. Coles has never impressed, poor quality and higher prices


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## Colonel Klink (18 December 2008)

Prawn.. agree with you. I am talking about your basic grocery lines. I go to specialty butcher , growers market for fruit and veg etc. it's all the stuff you sadly can't eat, but still seem to have stuff your cart with that I'm less fastidious about.

For example I live in Leichhardt, go to local shopping centre where said butcher and fruit and veg resides, not to mention excellent fish shop, grog and so it goes. There is a Coles there so I am not going to make a separate trip to another shopping centre just for the pleasure of shopping at Woolworths.

Not a chance

So I think,with absolutely nothing to back it up, it is about the location and what other shops that surround said store offer that makes the difference( to me)
Klink


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## nomore4s (18 December 2008)

prawn_86 said:


> I wonder what % of people are like yourself, it would make for an interesting study.
> 
> Personally i think all coles stores are absolute ****e and will not go to one unless i absolutely have to. We buy all our fruit and veg from a grocer, meat from the local butcer, and the rest from Woolies. Coles has never impressed, poor quality and higher prices




We have just moved house into a new suburb which has both a Coles and Woolies in close by (old suburb only had a Woolies).

We have tried Coles a few times now and the only thing better than Woolies is the fact we don't stand in line at the checkout for as long.

The fruit and veg, meat and general range is no where near as good as Woolies and it seems to cost us about an extra $20-$40 per shop. So it looks like we'll be standing in line from now on.

Will be looking to short WES if it can't get above $18.00 and then $20.00


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## ROE (18 December 2008)

Colonel Klink said:


> Just wondering what thoughts are re future WES debt refinancing. With US rates heading toward zero or thereabouts, I would have thought this would be fairly positive, assuming someone is still lending!
> 
> Coles is seen as this great burden, and maybe it is, but I'm a shopper and as far as a supermarket goes, I don't give a rat's re basic groceries, if I'm at Coles or Woolworths. It is just about which is most convenient at the time.
> 
> ...




dude look at the Coles number it's doesnt stack up...
It doesnt matter if million people shop at Coles, if they dont make much money out of those people what the point?

I rather have 100 customers and make $100 
then a thousand customers and make $70 bucks.

and you know why they go back to share holders for more cash at a massive discount ?

1. Company is crab, the lender wants a massive interest bill to cover their risk so cheaper to go to share holders

2. No one will lend them the money

3. Shareholder wont buy unless they give massive discount as the risk is too high.

Last year WES borrow money they pay 10%-11% for interest bill.

Until Coles can make some serious money, its a very very painful road for WES shareholder with their ROE going down the toilet each year and if Coles
turn out to be a real dog it's will takes WES down with it.


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## johenmo (19 December 2008)

DISC:  Hold none of these.  But work in an industry which sells to these guys.

WOW are a clear leader in the grocery wars.  Coles are being challenged by Metacash (IGA, Foodworks etc).  These three hold about 80+% of the market.

Doing business with them, WOW seem to have it more together.  Coles should get out of the mire but it's going to take some time.  As others have said, the debt is holding them back.

FYI - Woolworths in the UK (not related at all) have gone into receivership.


*Woolworths set for administration  *

Woolworths has had a presence on the UK High Street for almost a century 
High Street legend Woolworths has buckled under its debt and is set to go into administration, BBC business editor Robert Peston has learned. 

The move will put tens of thousands of jobs at its 815 stores under threat. 

The board of Woolies - one of the UK's oldest store groups - is meeting to take the formal decision. 

Deloitte will be appointed as administrators to the store chain and also to Entertainment UK, which supplies DVDs to supermarket groups. 

However, Woolworths joint venture with BBC Worldwide, publisher 2 Entertain, will not go into administration as it is owned by Woolworths' parent company. And all stores will remain open and keep trading, at least for now. Money has been ring-fenced so that salaries will be paid to staff as normal on Friday, a spokeswoman added. 


What is the point of Woolworths?
Robert Peston's analysis


Our business editor says that Woolworths has been something of a lame duck retailer for years, losing market share against intense competition. 

The company's weak position was also the reason why the government did not intervene to rescue it. 

"Government policy is not to prop up lame ducks," our business editor said. 

Peter Mandelson, the business secretary, had been in contact with the company on Wednesday, to ensure that if it went into administration, it would minimise the anxiety to its employees. 

The company has been asked to do what it can to protect its pension fund, and keep its stores open if possible during the vital Christmas period. 

The UK's Woolworths has no connection with several retail chains around the world that carry the same name.


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## Garpal Gumnut (3 January 2009)

I am not a funnymentalist and can only go on my own observations of some of WES Retail outlets.

Coles : Could do better
Officeworks  : Going gangbusters
Liquorland :  Could do better
KMart : absolute crap, cheaper to close it down
KMart Tyre and Auto  :  going gangbusters
Bunnings : Absolutely gangbusters, flogs the opposition, what opposition ?

gg


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## tigerboi (3 January 2009)

Colonel Klink said:


> Prawn.. agree with you. I am talking about your basic grocery lines. I go to specialty butcher , growers market for fruit and veg etc. it's all the stuff you sadly can't eat, but still seem to have stuff your cart with that I'm less fastidious about.
> 
> For example I live in Leichhardt, go to local shopping centre where said butcher and fruit and veg resides, not to mention excellent fish shop, grog and so it goes. There is a Coles there so I am not going to make a separate trip to another shopping centre just for the pleasure of shopping at Woolworths.
> 
> ...




just wondering if you grew up in leichhardt ck?i grew up there & went to leichhardt primary & high...the good old days of amco cups & the swimming pool...great memories

oh by the way reckon WES with its debt & coles is the short of 2009...tb


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## michael_selway (3 January 2009)

Garpal Gumnut said:


> I am not a funnymentalist and can only go on my own observations of some of WES Retail outlets.
> 
> Coles : Could do better
> Officeworks  : Going gangbusters
> ...




Hi Not bad







*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS 179.5 231.2 160.0 189.6 
DPS 200.0 200.0 140.0 170.0* 



> Date: 17/12/2008
> Author: Hannah Tattersall
> Source: The Australian Financial Review --- Page: 7
> Australian retailers are promoting pre-Christmas specials to offset a a bleakDecember 2008 trade. Myer is offering one-day specials. Kmart is giving 50% offChristmas trees and video games. Sales growth in 2008 is at 0.2%, whereas in2007 it was 7.4%. Analysts see the discounting as a panic reaction. Some smallerretailers are not so concerned




thx

MS


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## Colonel Klink (4 January 2009)

tigerboi said:


> just wondering if you grew up in leichhardt ck?i grew up there & went to leichhardt primary & high...the good old days of amco cups & the swimming pool...great memories
> 
> oh by the way reckon WES with its debt & coles is the short of 2009...tb




Yep ..still a good spot but I am a comparative blow in (1990). Helps if you don't mind the odd jet(or 20) over your roof. 

As for WES ...well, looking to the future there, you might say, because it's no fun at present! ..klink


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## gerg (5 January 2009)

Michael

Where do you get those nice graphs you always seem to include in posts?

Why do you always have then tagged as Director Activity Report, and whose predictions are they for WES earnings in 2009/10/11. They show a marked dip in 2010.

Gerg


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## gfresh (14 January 2009)

Update out today, puts into question the ability to pay out the their nominal 11% yield..

How are they going to fund that $1bn due in October? and then the $5bn  due next year? Some large dilution coming up ..

_The FY2009 interim and final dividend will depend on a number of factors. The company’s ability to pay dividends for FY2009 at the previous guidance level of $2 a share will be impacted by, particularly, the finalisation of the half year accounts, full year results (which will be impacted by the factors noted above) , the outcomes of the impairment testing process, and the structure, conditions and timing of the company's refinancing programme, all of which will potentially impact on the companies retained earnings, franking credit position and dividend capacity.

In the event of a negative impact from these factors, the company may not be in a position to pay dividends for FY2009 at the previous guidance level.

Wesfarmers expects to announce its interim dividend and results for the half year, following eview by the company’s external auditors, on 19 February 2009._


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## tigerboi (16 January 2009)

gerg said:


> Michael
> 
> Where do you get those nice graphs you always seem to include in posts?
> 
> Gerg




the directors charts come from top stocks but i think you got to pay up to get...

down about 10% since i caned it as the short of 2009...tb


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## ROE (22 January 2009)

http://business.theage.com.au/business/wesfarmers-in-halt-pending-capital-raising-20090122-7mz4.html

first $29, now could be $12 value destroying stock.
Like I say Goyder is a bit of a gamble.


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## noirua (22 January 2009)

An ASX announcement says Wesfarmers are in trading halt pending an announcement by the company on capital raising.


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## investorpaul (22 January 2009)

Garpal Gumnut said:


> I am not a funnymentalist and can only go on my own observations of some of WES Retail outlets.
> 
> Coles : Could do better
> Officeworks  : Going gangbusters
> ...




I work for a property development/investment firm that owns a number of shopping centres with Coles as the anchor tenant. Compared to Woolworths they just cant get anything right. Their stores look old and tired (even though one has been recently refurbished). They fresh produce is below standard and I cant see it lifting in the short term.

Woolworths have maintained their fresh and "exciting" image, they consistently achieve better sales out of their stores and as a result any developer wants them as a major tenant, thus allowing them first pick for new stores. Their liquor division is obviously closely tired to supermarket performance and hence liquorland could also do better.

We dont have any other the other retailers as tenants but I would say your summary is pretty spot on.


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## deadset (22 January 2009)

another one doing a capital raising.... once one does it, they all want to do it, be careful.

No wonder they do a trading halt when they announce it, as if you wouldn't dump any company about to capital raise.  From what I can tell, capital raising guarantees that the stock price will stay below a limit until its all over and it hurts current shareholders no matter what.  

Capital raising = dirty dogs IMO


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## nomore4s (22 January 2009)

deadset said:


> another one doing a capital raising.... once one does it, they all want to do it, be careful.
> 
> No wonder they do a trading halt when they announce it, as if you wouldn't dump any company about to capital raise.  From what I can tell, capital raising guarantees that the stock price will stay below a limit until its all over and it hurts current shareholders no matter what.
> 
> Capital raising = dirty dogs IMO




Problem is they don't really have a choice due to the huge debt levels they have. It's either raise capital or get into more trouble which would then hurt shareholders even more.

It looks like the capital raising will be at a fair discount too. The share price could get smashed when it starts trading again. 
I have trying to get a short entry on WES but couldn't find a set up I liked to justify it - oh well you win some and you lose some.


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## drsmith (22 January 2009)

$13.50 per share although a 3 for 7 entitlement offer. Institutional component of $1.9 billion fully underwritten. 

$An additional $900 million placement at $14.25 per share so a total of $2.8 billion garanteed.

Interim dividend expected to be $0.50 fully franked. Full year dividends not expected to be greater than $1.00 (fully franked). None of the new shares noted above will be entitled to the interim dividend.

http://www.asx.com.au/asxpdf/20090122/pdf/31fnrhq0jqkhz0.pdf

I suspect it will initially trade above entitlement offer of $13.50 (those taking shares at $14.25 obviously think so) but where it goes from there in the short terms will obviously depend on overal market performance.

$13.50 ($14.25) ex div implies $14.00 ($14.75) cum div. I'll guess $15.00 when trading resumes.


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## ROE (22 January 2009)

They need to get rid of the gambler and bring back Michael Cheney.. He make careful takeover and make sure share holder interest was always at heart and it pay off for WES big time over the year.. 

it doesn't take long for an idiot to un-do all the hard work.


----------



## tigerboi (22 January 2009)

tigerboi said:


> the directors charts come from top stocks but i think you got to pay up to get...
> 
> down about 10% since i caned it as the short of 2009...tb




you can also get them from hc looks like wes are headed much lower as i thought they would this year,reckon the coles gamble was a no brainer up against such a well run competitor  as woolies,more pain & lower prices coming shareholders way...tb


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## ROE (9 February 2009)

More nightmare could be heading WES way
http://www.theaustralian.news.com.au/business/story/0,,25009354-643,00.html?from=marketwatch_rss


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## UMike (10 February 2009)

This is an already over saturated market with so many players involved that it'd be very difficult to start up from scratch and be profitable straight away.

WES need only to improve their existing businesses and reduce debt to become a better performer.


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## oldblue (11 February 2009)

Yes, I'd be surprised to see WOW try and start anything from scratch. If they can't takeover some reasonably sized current player I'd expect them to scrap the idea.


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## rodmel (14 February 2009)

*Wesfarmers WES (Renounceable)*

I would apreciate members opinions regarding this issue,
as to whether to attempt to obtain more than my allotment
at $13.50 as against Fridays close of well above $15.00


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## skc (15 February 2009)

*Re: Wesfarmers WES (Renounceable)*



rodmel said:


> I would apreciate members opinions regarding this issue,
> as to whether to attempt to obtain more than my allotment
> at $13.50 as against Fridays close of well above $15.00




I think you will quickly get a message from the Mods saying you can't ask for, and no one can give you, specific recommendation or advice. Unless they are licensed etc etc.

But let's just say if you buy at $13.5 and sell at $15, you make a $1.50 profit.


----------



## Bill M (15 February 2009)

*Re: Wesfarmers WES (Renounceable)*



rodmel said:


> I would apreciate members opinions regarding this issue,
> as to whether to attempt to obtain more than my allotment
> at $13.50 as against Fridays close of well above $15.00




There is another way of tackling this. Lets say you don't want anymore WES shares, what you can do is sell some of current holdings at $16 on market and then with the proceeds buy your new stock for $13.50. You might lose the lousy 50c dividend but you still come out $2 a share in front. 

Not advice but just another way attacking the issue and benefiting. Oh and yes I am going to take all my issues, good luck.


----------



## rodmel (15 February 2009)

Sorry SKC and others I will be more careful as to how I phrase a question but many thanks for your input


----------



## Bill M (19 February 2009)

Just a quick reminder to all WES holders, you have until 5 PM on Monday 23rd to take up your rights issues at $13.50

That means you must BPay Friday (or earlier depending on your bank) to get these.

Today they are trading at about $16.50, that makes it a $3 difference that could work in your favour should you wish to sell, good luck to all WES holders.

Not a recommendation, just a reminder.


----------



## Bluebeard (19 February 2009)

I havent really followed Wesfarmers, I had a quick look before the Coles Transaction, so for people following this stock, Is Wesfarmers going to become a retailer or will they hold onto all there other divisions such as chemicals and fertilisers etc etc.


----------



## Judd (19 February 2009)

Bill M said:


> That means you must BPay Friday (or earlier depending on your bank) to get these.




A small correction Bill M, under the BPay terms and conditions, as long as you make a payment before your financial institution's cut-off time (this is the time at the end of the business banking day when you need to make a payment by for it to be processed overnight), the biller will acknowledge the payment as having been made that day and should process the payment the next banking business day.

http://www.bpay.com.au/consumers/bpay/bpay_qa.aspx#qa130

So you can still make payment via BPay on 23/2 and the biller (Wesfarmers) is required to accept it as having been received on that day.

But I'd make payment the business day before just to be safe.


----------



## Bill M (19 February 2009)

Bluebeard said:


> I havent really followed Wesfarmers, I had a quick look before the Coles Transaction, so for people following this stock, Is Wesfarmers going to become a retailer or will they hold onto all there other divisions such as chemicals and fertilisers etc etc.




Hello Bluebeard, at the moment WES is hanging on to everything and have no intentions on selling anything as far as I know.

The capital raising has reduced their gearing by about 33% and now the share price is on the rise from extreme horrible lows.

I personally think this is a great company and I continue to build on my original shares, particularly when they offer me new ones through the rights issue at a substantial discount to the market.

There are 3 big negatives, coal prices are going down, too much debt and Coles is dragging the chain and needs a major turn around.

The only decision here is can they achieve the turn around? I think they can and I will hold for the long term. Good Luck with your decisions.


----------



## Bill M (19 February 2009)

Judd said:


> http://www.bpay.com.au/consumers/bpay/bpay_qa.aspx#qa130
> 
> So you can still make payment via BPay on 23/2 and the biller (Wesfarmers) is required to accept it as having been received on that day.
> 
> But I'd make payment the business day before just to be safe.




Thanks, I didn't know that. The funny thing is that my Super fund accepts my BPay deposits on the day of my transfer but my index fund accepts it the next business day. As you say best get it in a day early, I wish they were all consistent.


----------



## UMike (20 February 2009)

Bill M said:


> Thanks, I didn't know that. The funny thing is that my Super fund accepts my BPay deposits on the day of my transfer but my index fund accepts it the next business day. As you say best get it in a day early, I wish they were all consistent.



 Did mine yesterday just in case.

WES up to $17.69 now on a down all Ords day.

In for the long term on this one.


----------



## bellenuit (26 February 2009)

Terms of scaleback of additionally requested shares in retail offer announced:

Subscriptions for additional shares will get the GREATER OF:

1000 shares or
3 Times Shareholders Original Entitlement under the Offer 

They expect 95% of those who applied for additional shares to get the full amount applied for.

60% took up entitlement. $1.5B raised from entitled shares and $0.3B from additional shares. Additional shares to be scaled back to $0.2B, meaning total proceeds from the retail offer will be $1.7B


----------



## UMike (26 February 2009)

Good. I got my extras 


Should of applied for more eh?

At least the divi is already in the bag.


----------



## freebird54 (10 March 2009)

*WES ENTITLEMENT WITH COMSEC*

Anyone find their mates sold a day sooner than they could with comsec?

Also anyone wondering who is earning the interest on the millions someone is holding for those who oversubscribed? - they are holding more than a years income of mine


----------



## nomore4s (25 March 2009)

Nice breakout today of the trading range. Target of around $23.00 but would like to see some consolidation zones on the way up indicating the bottom could be in.


----------



## Sean K (20 April 2009)

nomore4s said:


> Nice breakout today of the trading range. Target of around $23.00 but would like to see some consolidation zones on the way up indicating the bottom could be in.



Yep, looks very good. Have to assume a bottom in place by the chart. So many looking like this makes me think the bottom is in. 

Bouncing off the previous resistance should make it support.

Should....


----------



## johannlo (5 May 2009)

What do you guys think of buying in at current prices?

Is the SPP recovery going to hold and I guess the million dollar question will the overall economic outlook keep rising in spite of some dodgy fundamental stats still coming out esp. US markets


----------



## UMike (6 May 2009)

johannlo said:


> What do you guys think of buying in at current prices?
> 
> Is the SPP recovery going to hold and I guess the million dollar question will the overall economic outlook keep rising in spite of some dodgy fundamental stats still coming out esp. US markets



Dunno If I can help you, but, my take on them after buying in at $27.5  was to keep buying (2 more lots) as they dropped and as much as I could at the $13.50 allocation.
I've since sold the first 2 lots. at $19 and on Monday @ $23.75.

Holding the rest (over half of the total bought). If it goes to $28.5 I'll sell some. If it goes to ~$20. I'll buy some based on the events at the time.

No real urgency either way atm. jmo.


----------



## Sean K (16 July 2009)

WES looks like it would have been a nice pick up off that bottom. Like a few stocks I suppose making 50-100% ish gains. Been sideways for the past couple of months but making some higher lows and hitting this general resistance area. Potential break up perhaps.


----------



## haunting (10 August 2009)

** WES is rebounding with a bit of oomph this morning, worth a look for either a short term trade or for longer term position play. It is also a  divi play, usually going ex around this time of the year.  Attached are the longer term daily chart showing the rebound at support, and a 10-min chart showing short term swing, 25.50 will be about 50% fibo retracement from the recent low.

** holding a small position.


----------



## jono_oz (20 August 2009)

Hmmmmm QBE profit jumps 14% and the shares jump 7% .......

WES profit jumps *45% * and its shares drop 4.5%.... hehehe I guess the share market is definately not logical in any way.


----------



## oldblue (20 August 2009)

jono_oz said:


> Hmmmmm QBE profit jumps 14% and the shares jump 7% .......
> 
> WES profit jumps *45% * and its shares drop 4.5%.... hehehe I guess the share market is definately not logical in any way.




It's all to do do with meeting expectations or not meeting them or exceeding them.

WES didn't and QBE did.


----------



## ROE (20 August 2009)

jono_oz said:


> Hmmmmm QBE profit jumps 14% and the shares jump 7% .......
> 
> WES profit jumps *45% * and its shares drop 4.5%.... hehehe I guess the share market is definately not logical in any way.




All spins, the result is crab ..

$861M EBIT for Coles, that is a shocker you pay $16B odds for it
and you get 861 EBIT ..that 18 times EBIT, if you take out the Interest and Tax that goes something like 20-25 times Earning 

they just waste a whole lot of money on Coles ... 

if Coles cant growth 15% a year it's a lost cause


----------



## Ferret (21 August 2009)

Look what they built out of nothing with Bunnings.  These guys know retailing.  Give them some time and they'll pull it together for coles etc too.


----------



## lianeisme (21 August 2009)

Because they payed too much for the Coles asset in the first place, the income from that asset is very low, compared to the purchase price. It will take years for the value of the asset to meet the price originally paid. To put further pressure on WES. COSCOS is coming to town, WOW has been very aggressive and ALDDI is becoming more robust in the market place.  Their Bunning’s chain really has no competitors at present.


----------



## Gekko (28 August 2009)

I have today entered a short position on Westfarmers. Stop-loss set at $26.80. PE around 24. Target ~$20.


----------



## MACCA350 (28 August 2009)

Gekko said:


> I have today entered a short position on Westfarmers. Stop-loss set at $26.80. PE around 24. Target ~$20.



Meanwhile WES closed up 2.33% to $25.50

There may be some pull back, but I don't see it dropping to $20, though I guess it is possible. Personally(I picked up a bunch of WES at $18 with a long term hold position) I'm not concerned.

cheers


----------



## airpoe (28 August 2009)

MACCA350 said:


> Meanwhile WES closed up 2.33% to $25.50
> 
> There may be some pull back, but I don't see it dropping to $20, though I guess it is possible. Personally(I picked up a bunch of WES at $18 with a long term hold position) I'm not concerned.
> 
> cheers



same here picked up 10k @ 18.80, looking long term & won't lose sleep over this purchase

I don't see why it would not go back to 40+ in the next few years


----------



## UMike (29 August 2009)

I only got my SPP shares left. @27.9 It'll be worth over 10 grand more than I paid for it.

I reckon It has more of a chance to hit at least that before $20.

Good luck to all holders.


----------



## Gekko (29 August 2009)

MACCA350 said:


> Meanwhile WES closed up 2.33% to $25.50
> 
> There may be some pull back, but I don't see it dropping to $20, though I guess it is possible. Personally(I picked up a bunch of WES at $18 with a long term hold position) I'm not concerned.
> 
> cheers




Macca, i buy what i like most, and short what i dislike or like least. Westfarmers comes into the later two categories. Apart from thinking its trading on too excessive a PE, its also risk management and hedging.


----------



## Gekko (30 August 2009)

Gekko said:


> Macca, i buy what i like most, and short what i dislike or like least. Westfarmers comes into the later two categories. Apart from thinking its trading on too excessive a PE, its also risk management and hedging.






Bunnings has for years been a money tree to Westfarmers. Michael Luscombe is going to give it his darnedest to erode the Westfarmers/Bunnings hardware monopoly.


http://www.abc.net.au/news/stories/2009/08/30/2670948.htm

Michael Luscombe has told ABC1's Inside Business there is one large-format hardware store for every 90,000 people in the United States.

He says there is one for every 120,000 in Auckland, but in Australia there is only one for every 230,000.

"There's a big gap there, there's a big opportunity for an alternative offer that just gives consumers a choice that they don't presently have," he said.

"Choice and competition is great."


----------



## Muschu (5 September 2009)

May I ask a basic question please?  
I've had WES since March. What is the "recording date" for dividends?  If I sell them now do I still get the dividend due in some weeks time?
With thanks
Rick


----------



## noirua (5 September 2009)

Now thoroughly upset with Wesfarmers and completely lost confidence. Sold out at a 36% loss to buy a gold stock instead. Hope I'm wrong and they get Coles and their coal interests etc., etc., under control - good luck.

Record date for dividend is 31st August for payment of 60c a share on 1st October. Wend xd on 25th August.


----------



## Muschu (5 September 2009)

noirua said:


> Now thoroughly upset with Wesfarmers and completely lost confidence. Sold out at a 36% loss to buy a gold stock instead. Hope I'm wrong and they get Coles and their coal interests etc., etc., under control - good luck.
> 
> Record date for dividend is 31st August for payment of 60c a share on 1st October. Wend xd on 25th August.




Thanks Noirua.  Seems I will get the dividend.  Thinking of selling out and re-investing elsewhere. Haven't felt really comfortable with WES for some time. Maybe I am not patient enough...

The outlook on gold currently seems good.  I bought GOLD some time back- still at a loss - but see no point in selling.  Using it as a defense.  If I live long enough maybe I'll make a reasonable profit............

Regards

Rick


----------



## Muschu (5 September 2009)

noirua said:


> Now thoroughly upset with Wesfarmers and completely lost confidence. Sold out at a 36% loss to buy a gold stock instead. Hope I'm wrong and they get Coles and their coal interests etc., etc., under control - good luck.
> 
> Record date for dividend is 31st August for payment of 60c a share on 1st October. Wend xd on 25th August.




PS _ If I may ask, how long did you hold them for? [An now I need to build up to a 100 characters or I can't ask you.....]


----------



## noirua (6 September 2009)

Muschu said:


> PS _ If I may ask, how long did you hold them for? [An now I need to build up to a 100 characters or I can't ask you.....]




Early December 2006 was the date of my original purchase of Wesfarmers on hopes they would get the coal side of the business going well, however, they bought the wrong Coles.


----------



## Gekko (6 September 2009)

Muschu said:


> May I ask a basic question please?
> I've had WES since March. What is the "recording date" for dividends?  If I sell them now do I still get the dividend due in some weeks time?
> With thanks
> Rick






Yes Rick62. WES is trading on an ex-dividend basis. You can sell now and get the dividend _presuming you held up until now or until the ex-dividend date._


----------



## UMike (6 September 2009)

Don't you have to hold them for 45days after the dividend date to claim the franking credits though?


----------



## enigmatic (6 September 2009)

I could be misstaken but i believe the 45 days only applies if you make over 5,000 a year on dividends. Someone correct me if I'm wrong


----------



## Muschu (6 September 2009)

Gekko said:


> Yes Rick62. WES is trading on an ex-dividend basis. You can sell now and get the dividend _presuming you held up until now or until the ex-dividend date._



_

Thanks Gekko.  Yes, I still have them - and have had since about March.  Just not feeling comfortable with them and considering "moving on".  Not sure yet. 

Rick_


----------



## kermit345 (18 February 2010)

Have had a significat jump today given the release of their report (which I haven't had a chance to read).

Has anyone else had a chance to have a look and pinpoint what was the catalyst for the increase today on the back of the report?


----------



## McCoy Pauley (18 February 2010)

NPAT rose 1% despite foreshadowed significant fall in resources' earnings.

Group EBIT down 11% but when WES takes out resources, EBIT rose 44% and EBIT from retail businesses up 23%.

18% increase in operating cash flows.

Capital raising diluted EPS, down 26%.  Dividends increased 10% from $0.50/share to $0.55/share.

Looks like WES is finally getting on top of Coles/Kmart and getting those groups to turn around.


----------



## kermit345 (18 February 2010)

Thanks for posting those highlights McCoy.

If this trend continues of Coles/Kmart improving and WOW having a tough time, could see WES do quite well in the coming years. I also think WOW's move to the hardware sector will have little effect on bunnings and hence WES will continue to have a large market share for that industry.

While WES isn't out of the woods yet in regards to coles, it definately shows signs of vast improvement.


----------



## Julia (18 February 2010)

kermit345 said:


> Thanks for posting those highlights McCoy.
> 
> If this trend continues of Coles/Kmart improving and WOW having a tough time, could see WES do quite well in the coming years. I also think WOW's move to the hardware sector will have little effect on bunnings and hence WES will continue to have a large market share for that industry.
> 
> While WES isn't out of the woods yet in regards to coles, it definately shows signs of vast improvement.



Essentially agree, but would never underestimate Woolworths.
I don't know if it might be just my local stores, but Coles' customer service seems to be considerably improved, whilst Woolworths is definitely not what it was for service.   Coles have improved the layout and presentation in their store too.


----------



## McCoy Pauley (18 February 2010)

Julia said:


> Essentially agree, but would never underestimate Woolworths.
> I don't know if it might be just my local stores, but Coles' customer service seems to be considerably improved, whilst Woolworths is definitely not what it was for service.   Coles have improved the layout and presentation in their store too.




It's taken WES two years to improve the Coles division but it seems to be finally paying some dividends.  Having said that, I recently bought a house in the suburb I grew up in and have had occasion to visit the local Coles - it's like stepping back in time 20 years or so!

Given that there are improvements to be had in the resources and insurance sectors, and I thought that the Officeworks business performed below average on the numbers, I'm liking my (long-term) investment in WES at the moment.

It'll be interesting to see how WOW responds in the next 12 months.  Integrating their new hardware chain into the group may cause some difficulties, or it may not but it's fair to say that they're challenging the dominant player in the market in Bunnings.  The added competition for Safeways (Coles) and Big W (Kmart, Target) will undoubtedly spur WOW into making their own improvements to their chains.  That should only be good for the consumer, in the long run.


----------



## jancha (18 February 2010)

Julia said:


> Essentially agree, but would never underestimate Woolworths.
> I don't know if it might be just my local stores, but Coles' customer service seems to be considerably improved, whilst Woolworths is definitely not what it was for service.   Coles have improved the layout and presentation in their store too.




Yes i have noticed the improvement in Coles set up and faster check-out service.
I normally shop Wollies out of pure habit but am finding it frustrating at waiting in line with the check-out.
Unless you use the self serve check-out it's slower going.
They've may have reduced staff by installing them and cut cost in doing so but in the long run i think Coles will pick up more customers like me because of it.
I fully agree with what your saying here Julie & if enough people start seeing that & shopping there then Wes sp should only improve on that in the future.


----------



## kermit345 (18 February 2010)

I'm not convinced WOW will be able to match it in the hardware sector with bunnings. So many people (and businesses) would have long standing accounts with bunnings and because of their warehouse type structure they have reasonable prices because of their bulk purchasing of inventories.

Plus I remember reading somewhere a while ago (possibly Eureka Report) that the supply chain for WOW's hardware business actually provides more improvements for Mitre10 then it does themselves, cant remember the exact details but if anyones interested I can try and find the article.

Clearly WOW still has the upper hand in this battle, but I feel WES are doing a great job of bridging the gap. I was lucky enough to buy in march at just under $15, and I feel WES still have some way to go. Especially with the WESN stock which is partially protected and hence SP will have to at least reach the price associated with that otherwise they have to give out free shares (upon meeting the convenants of course).


----------



## JTLP (18 February 2010)

Hi all,

I work closely with both major supermarkets in developments and Coles is definitely making the turnaround. They have introduced massive savings on items with their dollar buys and are creating new/brighter stores and refurbished older stores. Both Coles and Woolies say that Coles has been gaining ground by being more responsive.  

On the other hand Woolies have better relationships with suppliers currently because they work more exclusively and longer with key partners.


----------



## McCoy Pauley (19 February 2010)

Interesting to see in today's AFR renewed speculation that Wesfarmers (via Bunnings) is sniffing around Reece again.  Merging Reece into Bunnings would fill a gap in the Bunnings model as well as extend WES into the professional plumbing industry.


----------



## Judd (19 August 2010)

The pain of it all.  As if.  I'll take an annual $1.25 ff dividend any day.  That income covers way more than my annual internet and telephone costs.

Off to something more fulfilling than watching little squiggles on a graph that supposedly indicates wealth.


----------



## freebird54 (24 August 2010)

I have WESN this is from one of the newsletters I subscribe to

I am holding


What this means is simply that You May Get More WES in due course if you Buy WESN.
If you have no doubt that WES will move above $43.11 you may not bother to get this protection.
But WES’ all-time high was $42.545 only briefly in June 2007.
Since the WESN issue it has always traded below its Cap Price and since June 2008 it has been below the Floor Price.
If WESN were reclassified at today’s $31.84, a holder of one WESN would get 1.25 WES shares.
The benefits at other prices are easy to calculate by dividing the Cap by the price – eg up to $34.49 you get 1.25 WES; if WES were
$36 you get 1.1975 shares; if $38 – 1.1345; if $40 – 1.0778; if $42 – 1.0264; and if WES were $43.11 or more you just get one share.
The cost of this Protection and the Significant Additional Upside Potential is small.
Over the 62 trading days from 21 December 2009, on a daily basis the weighted average traded price of WESN has been 3.84 ¢ higher
than that of WES – adding say 1/8th of a percent to the cost. However, with careful timing this may be better. On five days WESN were
cheaper than WES (in the best case by 12.4 ¢). On the 32 days WESN cost more (on average), the difference was 14.3 ¢ on one day and
only more than 7.5 ¢ on nine days. And with well timed buying you should be able to do better than this, on a swap or a new purchase.
Note that there is plenty of trading volume for most retail clients – over the last 62 days on average $36.7m WESN were traded daily,
compared with $132m WES per day.
PS – if you already have WES and no significant capital gains tax implications, consider selling to
switch into WESN. While the stock market appears to be improving and we anticipate a bull market
period ahead, there could still be left-field events that would make safety and the extra upside a
welcome benefit.


----------



## aussiebbs (9 June 2011)

*Interesting chart for Westfarmer*

Today's price doesn't bounce back but stay on the 61.8% level. Need to wait to see what will happen tomorrow!


----------



## Miss Hale (25 September 2011)

I have WES and WESN as a result of originally having Coles shares.  However I am confused about what is going to happen with WESN shares.  I thought they were due to be converted or whatever at the end of September this year but haven't received any communications on this from Westfarmers nor can I find anything about it on their website  .  Can anyone shed any light on this? TYIA


----------



## rolandstar (27 February 2013)

*Wesfarmers Wes*

Wesfarmers own Coles & Officeworks. I plan on spending $300+ over the next
 year at OW, since its walking distance.


----------



## McLovin (27 February 2013)

*Re: Wesfarmers Wes*



rolandstar said:


> Wesfarmers own Coles & Officeworks. I plan on spending $300+ over the next
> year at OW, since its walking distance.




Shouldn't this be disclosed to the ASX?


----------



## skc (27 February 2013)

*Re: Wesfarmers Wes*



McLovin said:


> Shouldn't this be disclosed to the ASX?




Lol. The $300 increase in revenue is certainly significant in the context of WES. I bought a truck load of WES on this information this morning.

However, the fact that roland walks to his local officeworks had me worried. Clearly, he's not driving, catching taxis or using internet and delivery services. I have placed large short bets on companies such as Carsales.com, Cabcharge, Telstra and Toll on the above.

It's amazing how much trading opportunities one can find with such valuable information.


----------



## kermit345 (28 February 2013)

Should probably short some of the Oil major's as well skc, given the significant drop in fuel consumption that will be associated with rolandstar's decision to walk to OfficeWorks. Some of the major oil producers in the middle-east may have to pullback on their production so to counter-act the drop in demand as well otherwise the floor could fall through on the oil price.

However i'd be interested in what brand shoe's rolandstar will be wearing, if he goes through that tread quick enough may be worth getting some Nike shares or something similar.


----------



## tinhat (28 February 2013)

Miss Hale said:


> I have WES and WESN as a result of originally having Coles shares.  However I am confused about what is going to happen with WESN shares.  I thought they were due to be converted or whatever at the end of September this year but haven't received any communications on this from Westfarmers nor can I find anything about it on their website  .  Can anyone shed any light on this? TYIA




They have until 7 November 2015 (eight years from the original notice) for the share price to get over $43.11 to avoid needing to issue additional shares to partially protected share holders (WESN holders).

Thus WESN shares are trading at a slight premium to WES shares because they have a sort of floor price to them in that shareholders will be topped up with additional shares if need be on 7 Nov 2015 to achieve an equivalence of $43.11 per share.

http://media.corporate-ir.net/media...ummarytermsasatJuly2011nochangestoOct2009.pdf


----------



## rolandstar (17 March 2013)

Started buying wes at $40.5
now $43.12 
up over 6%
Wesfarmers is listed on the ASX with code wes
Owns Officeworks & Coles
I plan on spending $1600 at these stores this year
increasing their earnings


----------



## Miss Hale (17 March 2013)

tinhat said:


> They have until 7 November 2015 (eight years from the original notice) for the share price to get over $43.11 to avoid needing to issue additional shares to partially protected share holders (WESN holders).
> 
> Thus WESN shares are trading at a slight premium to WES shares because they have a sort of floor price to them in that shareholders will be topped up with additional shares if need be on 7 Nov 2015 to achieve an equivalence of $43.11 per share.
> 
> http://media.corporate-ir.net/media...ummarytermsasatJuly2011nochangestoOct2009.pdf




Thanks tinhat


----------



## Gringotts Bank (16 May 2013)

Cup and handle.  As 'textbook' as it gets.  Breakout on the cards.


----------



## Muschu (16 May 2013)

Gringotts Bank said:


> Cup and handle.  As 'textbook' as it gets.  Breakout on the cards.




It would suit me nicely if you're right as I topped up a few days ago.  Seems to be travelling sideways but perhaps unlikely to move much further south.  Then again......


----------



## Ves (16 May 2013)

Probably in the minority, but I don't think a market valuation of $50 billion plus seems unreasonable for this stock - 7-10% profit growth is not out of the question for a while yet.


----------



## skc (16 May 2013)

Ves said:


> Probably in the minority, but I don't think a market valuation of $50 billion plus seems unreasonable for this stock - 7-10% profit growth is not out of the question for a while yet.




Merrill released research this morning saying they could return $2/share excess capital and increased price target to $53.

That explains most of the pop today.


----------



## tinhat (16 May 2013)

I bought some today on the breakout. On the P&F chart (box 0.8, reversal 1) this is a triple top break-out. Initial target 48.80, stop-loss 41.60.


----------



## Muschu (17 May 2013)

Any thoughts on whether yesterday's surge was a breakout attempt ?  I ask because of the noticeable gap in the chart going back to the day before...  Thoughts welcome as I wonder whether the SP moving forward needs to retrace to the $43.16 area first.
Regards
Rick


----------



## burglar (17 May 2013)

Target Update:

Perfect timing! Read more:

Just as you were expecting a breakout, the WES management decided to release bad news!




Disclosure: Never held.


----------



## tinhat (16 August 2013)

Nice pull-back today. I re-entered with three parcels between $40.10 and $39.90 today. Stop loss $38.70. Very large volume today. Do any tech analysts have a view about where this might go in the next few days? Obviously, I'm betting that the uptrend is not over for WES in the current cycle.


----------



## Sharkman (17 August 2013)

i'm no tech analysis expert, i get it wrong just as often (probably even more often) as the next guy... but to my eyes there would appear to be a nasty bearish engulfing candle last week followed by a huge gap down and another shorter black candle, so i'm looking for a pullback to around $39, where it was well supported for much of july and that is also the level where the 180 day EMA is currently at.

i'm primarily interested in this for stripping the div (i operate out of a low tax structure - which at the moment is actually a zero tax structure as i don't make enough profit to use up all the beneficiaries' tax free thresholds yet) so i really want those franking credits. unfortunately it goes ex-div on tues, and there's a good chance it won't drop to $39 until it's gone ex-div, so i may have to pay a buck or so more than i'd like to. thinking i might do a buy-write on monday using oct calls to partially hedge the downside (seeing as i'll likely be closing the position once i've nicked the div and met the 45 day rule - might as well collect some premium on top), but will have to check where the spreads/IV are at on the options market on monday before committing to the trade.

heard there's meant to be a 50c special div as well but couldn't find any details anywhere? anyone know if that's fully franked as well, and what the ex-date for that distro is? or have they not announced the details for it yet?


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## Ves (17 August 2013)

Sharkman said:


> heard there's meant to be a 50c special div as well but couldn't find any details anywhere? anyone know if that's fully franked as well, and what the ex-date for that distro is? or have they not announced the details for it yet?



It's not a special div.   It's a return of capital, so no franking credits.  

They are still awaiting the final ruling on tax treatment from the ATO, but it will be a reduction in the cost base of shares held (like any capital return) and after such ruling is received a vote for shareholder approval will be held at the November AGM.

Still looking for a long-term entry into WES myself.... but haven't quite seen my upper price limit hit for beginning to build a position.


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## Sharkman (17 August 2013)

Ves said:


> It's not a special div.   It's a return of capital, so no franking credits.
> 
> They are still awaiting the final ruling on tax treatment from the ATO, but it will be a reduction in the cost base of shares held (like any capital return) and after such ruling is received a vote for shareholder approval will be held at the November AGM.
> 
> Still looking for a long-term entry into WES myself.... but haven't quite seen my upper price limit hit for beginning to build a position.




ah. that reduces the appeal of the buy-write div strip a little. might still do it though if the market will let me get downside protection to the June low of $37'ish (with the help of the premium + franking credits), without having to choose a strike that's so far ITM it will gimp the profit potential. will have to see what cards we're dealt on monday.


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## Judd (10 November 2013)

Would appreciate it if someone would cast an eye over these calculations.

Along with the $0.50 return of capital, WES is to consolidate shares on the basis of 0.9876 for 1 (fractions rounded up to the next share) to take account of the return of capital.  The return of capital is pre-consolidation.

Attempting to work out the price per share if a parcel is held before consolidation and after.  Brokerage ignored for the purposes of the cost-base.

*Pre-consolidation*

500 shares @ $40.00 = $20,000.
RoC @ $0.50 = $250
Cost base per share = $19,750/500 = $39.50

*Post-consolidation*

500 shares x 0.9876 = 494 rounded-up
Cost base of parcel = $19,750
Cost base per share = $19,750/494 = $39.98

Flaws, comments, insights?


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## Julia (11 November 2013)

Looking for the WES price just now, Etrade (and the ASX website) is telling me it's not a valid code.
Search for the code for "Wesfarmers" shows WESDA.
Can someone explain what's going on here?  Five letter codes usually imply some condition on the share.


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## Judd (11 November 2013)

As per ASX announcement of 5/11/2013, post consolidation WES is trading on a deferred settlement basis.  Code is WESDA.  The partially protected shares are trading under WESDC.


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## McLovin (11 November 2013)

Julia said:


> Looking for the WES price just now, Etrade (and the ASX website) is telling me it's not a valid code.
> Search for the code for "Wesfarmers" shows WESDA.
> Can someone explain what's going on here?  Five letter codes usually imply some condition on the share.




There's a return of capital and share consolidation, which went ex today. See Judd's post, which looks correct to me.


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## Julia (11 November 2013)

Thanks Judd & McLovin.


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## Muschu (12 November 2013)

So if someone wanted to buy and add to their "WES" holding right now then the would buy WESDA?

We hold WES now but my Commsec portfolio presently shows their value as zero... If I bought WESDA then I gather the 2 would be amalgamated in late November?

Or is this incorrect?

Comment very welcome.

Thanks 

Rick


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## Garpal Gumnut (12 November 2013)

Muschu said:


> So if someone wanted to buy and add to their "WES" holding right now then the would buy WESDA?
> 
> We hold WES now but my Commsec portfolio presently shows their value as zero... If I bought WESDA then I gather the 2 would be amalgamated in late November?
> 
> ...




Who knows, very badly handled for retail investors today by Comsec and Etrade today.

ASX no better.

Broker sites should have had a banner indicating how to trade Wesfarmers today on front page.

I will let Mr. Abbott know.

gg


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## Judd (12 November 2013)

Muschu said:


> So if someone wanted to buy and add to their "WES" holding right now then the would buy WESDA?
> 
> We hold WES now but my Commsec portfolio presently shows their value as zero... If I bought WESDA then I gather the 2 would be amalgamated in late November?
> 
> ...




As far as I understand, and I could be wrong, those holding WES at CoB on 8 November, on Monday 11 November now hold WESDA but you have to do the calculations as to the exact figure since the algorithm for the conversion is obviously way, way too complicated for the computers at any broker, or indeed the ASX, to cope with.

Once the deferred settlement period has passed then WESDA reverts to WES and the computers will be happy little chappies again.


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## Muschu (16 November 2013)

I'm am ordinary investor and confused on this still.  My WA newspaper tells me that WES closed at $43.88 yesterday.. altho that may be out of date.
My iPad ap tells me that it closed at $44.05 today.  
Yet there is no validity to the code WES right now. 
WESDA closed today at $44.15.... 
Comments from more informed investors would be most welcome.

With thanks 

Rick

ACC


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## Country Lad (16 November 2013)

Rick, it is WESDA while it goes through a capital and share consolidation process.

The relevant information can be found at:

http://www.asx.com.au/asxpdf/20131108/pdf/42kqbyxvzg7yxq.pdf

and

http://www.asx.com.au/asxpdf/20131105/pdf/42kn6qczsjj16f.pdf

Cheers
Country Lad


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## Muschu (16 November 2013)

Many thanks CL.  I'll have a good look at these links.  You help is greatly appreciated.

Rick


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## Judd (20 November 2013)

For those who follow these things, post consolidated holdings were entered on 18 November so they should show up in the share registry.

Deferred settlement trading (WESDA ordinary and WESDC partially protected) ends on 26 November and normal trading under WES and WESN resumes on 27 November.


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## IFocus (5 July 2014)

One of the more obvious trades around as WES bounces off support at $41 I didn't take this (I did need to add to my super) and there are others in the market anyone else jump on board? 

.


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## Judd (5 July 2014)

Haven't bought WES since I last filled my boots with them in March 2009.  I should have but should just doesn't cut it.


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## IFocus (5 July 2014)

Judd said:


> Haven't bought WES since I last filled my boots with them in March 2009.  I should have but should just doesn't cut it.




I am afraid during this run up I have been part of the shoulda / coulda crowd.........been busy with other stuff but still no excuses.


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## Judd (5 July 2014)

Yeah but, in my case, but I have to recognise certain limitations of mine.  First, the amount of cash available unless you wish to go into debt – and there is a 400 page thread full of angst and anguish on the consequences of doing that.  Second, when you buy at a low point of $13.50 there is this weird, vain hope in your mind (at least for me) it will remain around that price so when the cash builds up you can buy more.

Oh, the perils, trials and tribulations of a buy and hold.  Dang it, an afternoon with the strat is becoming a better option by the minute.

As a postscript, it could be worth the risk depending on one's personality and viewpoint.  The company is holding $1.2B in cash from the sale of the insurance assets.

WES has a tendency to return cash to shareholders by way of a special dividend or capital return.

However, it has two problem children Target and Coles liquor, so whether this has any impact remains to be seen.  Not sure why they just don't get rid of them.  Maybe they are worried about doing a "Dick Smith."


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## ROE (29 August 2014)

WES is using analytic system now, targeting customers that has good record of driving and 
no claim for other thing like home and content.

I never claim insurance my whole life and I got a whoopy 40% cheaper than my current insurer.

I think this is a more profitable path, very much like Warren Buffett GEICO, only targeting good people and offer them cheap insurance, all float but rarely pay out.

analytic system is a big thing, any business that has these system should be able to chose their most profitable customers and those who doesn't end up with the bad one.


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## Judd (16 September 2014)

Judd said:


> Yeah but, in my case, but I have to recognise certain limitations of mine.  First, the amount of cash available unless you wish to go into debt – and there is a 400 page thread full of angst and anguish on the consequences of doing that.  Second, when you buy at a low point of $13.50 there is this weird, vain hope in your mind (at least for me) it will remain around that price so when the cash builds up you can buy more.
> 
> Oh, the perils, trials and tribulations of a buy and hold.  Dang it, an afternoon with the strat is becoming a better option by the minute.
> 
> ...




It now seems there could be a need for fitting rooms in Bunnings as WES has bought Pacific Brands Workwear.  Looks like it'll be _de rigueur_ to wear Hi-Vis when searching for the tap washers or buying potting mix.

Also, as I guessed, the company is intending to return $1 per share (65% to 75% ff dividend and the rest a capital return) around December followed by another share consolidation.


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## pixel (16 September 2014)

Over the past 5 years, WES has done really well for its shareholders: Tripling in price and paying good dividends on top: almost $10 in total plus full franking credits.
On the Monthly chart, I notice the $35 resistance (100% line) has held for almost 2 years.
18 months ago, it's hit another resistance level at $44.




Can we expect another breakout into the $50's any time soon?
I don't hold at present, but setting an alert for $44 break-and-hold.


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## Muschu (16 September 2014)

pixel said:


> Over the past 5 years, WES has done really well for its shareholders: Tripling in price and paying good dividends on top: almost $10 in total plus full franking credits.
> On the Monthly chart, I notice the $35 resistance (100% line) has held for almost 2 years.
> 18 months ago, it's hit another resistance level at $44.
> 
> ...




Really interesting observations Pixel... I'm a retiree and hold WES and have been thinking of adding... 

Thanks

rick


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## pinkboy (10 October 2014)

Testing its 12mth low today.  Looking good for a small add.


pinkboy


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## pinkboy (13 October 2014)

pinkboy said:


> Testing its 12mth low today.  Looking good for a small add.
> 
> 
> pinkboy




Knicked under the $40 today.  Couldnt pull the trigger today.  

Tech guys, next support around the $37 level?

pinkboy


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## el caballo (13 October 2014)

pinkboy said:


> Knicked under the $40 today.  Couldnt pull the trigger today.
> 
> Tech guys, next support around the $37 level?
> 
> pinkboy




Pink,

The weekly chart shows support around $36.  It may pay to be patient ...


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## rimtas (29 December 2014)

WES has bounced off from the trendline support, and if All Ords started it's third wave( see charts in Ew XAO thread), WES has a similar structure, which can produce an advance to new highs. 

Though wave (2) looks a bit short in terms of time, but Primary ((2)) was short too.  Anyway, I think that this Trendline is a key and if breached down, we could see  a more prolonged correction. But at this stage I bought WES close to the line and try to hold untill the wave structure generates a sell signal.

WES was holding really well compare to WOW, but one reason for this could be that WOW advanced to new Highs above 2007 and WES not. That's why WOW is correcting in a steeper manner.
Short term hourly subdivisions are not clear at this stage, but with market gaining momentum to the upside WES should follow soon.


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## Triathlete (29 December 2014)

rimtas said:


> WES has bounced off from the trendline support, and if All Ords started it's third wave( see charts in Ew XAO thread), WES has a similar structure, which can produce an advance to new highs.
> 
> Though wave (2) looks a bit short in terms of time, but Primary ((2)) was short too.  Anyway, I think that this Trendline is a key and if breached down, we could see  a more prolonged correction. But at this stage I bought WES close to the line and try to hold untill the wave structure generates a sell signal.
> 
> ...




Hi Rimtas,
                I thought I would put my own analysis forward on WES using the monthly chart.My view is if we close above $44.60 then we could see the stock move towards the $55 level as this would be the 100% level for a LT Wave 3 and also using some price tables I have show this as a strong level,I have placed some other prices as to what I believe will be the most significant going forward based on my analysis.I would expect the sub wave 5 of the LT Wave 3 to also reach this level before seeing any reversals, although nothing is certain and who knows if we can stay above the trend line maybe even reach the $82 some time in the future....


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## rimtas (29 December 2014)

Hi Triathlete,
thanks for your input. I usually do not try to predict how far the wave can go, because it is subject for the future wave subdivisions. At the end, you will see that the wave is complete, market always goes to the point where more or less we can suspect that the Top of the Impulse wave at Cycle Degree is near.

What I would like to see in the 2015-2017  is the Point of Recognition, or the middle of the wave, which you could see and recognize even on a monthly chart if you understand what I am talking about. This would be a continuous  multimonth Gap and Go movement, and profits at this stage would be big and quick.  But I don't know when this will occur, probably after couple more first and second waves of lesser degrees at monthly chart, so this could definitely take years. Most optimistic scenario could be  end of 2015, but I think market won't make it to that point in such a short time.  
A good guidance for this wave section  to occur is when All Ords would jump above 2007 top.

All we need to confirm that long term uptrend is about to resume is just for WES to go above 2007 top (47,50), otherwise there are still many bearish scenarios with one of them having a possibility to crash WES towards GFC lows. New highs would eliminate them all.


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## Julia (29 December 2014)

rimtas (and triathlete) thanks for going to the trouble of providing your detailed analysis.  It's interesting and much appreciated.


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## PinguPingu (17 February 2015)

Hey rimtas, wonder if you would be kind enough to update your opinion on WES? Looks primed for a another breakout test should macro results be good tomorrow.


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## Triathlete (20 February 2015)

Just updated my own technical view of WES on the monthly chart.Price has broken through the previous ATH $45.90 which was marked as a buy point although this may be due to the stock going ex div on the 24/2 @$0.89.

 At todays closing price of $46.39 that would take price back down to $45.50 it will be interesting to see if price stays above $45.91 or goes back under after the ex div date. I will wait until further confirmation that price will stay above $45.91 this would give me more confidence that price will hold here and move up over the coming months.

I am interested in other views from both Technical and Fundamental analysts thanks.


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## galumay (20 February 2015)

Triathlete said:


> I am interested in other views ...




I wouldnt be buying at the current price from an FA point of view, but happy to hold. Its certainly priced above my IV for it, but there are still some strong metrics, operating margin is still good, m/b and p/s rations are still healthy. 

Some of the recent news was quite encouraging, Bunnings is just booming, despite the apparent competition, and Target & KMart seem like they might be turning the corner. Resource sector was weak as expected.

Just keep collecting the cheques each time we pass go!


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## rimtas (21 February 2015)

PinguPingu said:


> Hey rimtas, wonder if you would be kind enough to update your opinion on WES? Looks primed for a another breakout test should macro results be good tomorrow.




Hi Pingu,

There are no changes at this point, no important levels were reached neither wave structure is forecastable meaning that patience is the key now.

Also I am not sure what chart should I trust, as after the NOV 2014 share dilution there are few different options. 
The first chart is from my trading platform, where I can see the slight chance of a complete five wave move up from  the wave (2) bottom. But in higher degrees this count doesn't feel right, it would look best as WES is preparing for a breakout. So only guessing now.

Second chart is from other source, and the bottom is different here, breakout is already in place. And I actually like it better from the wave perspective. 
Both charts are bullish, no matter how you label them. Wave structure upwards is Impulsive, sporting "fives", which indicates uptrend.  I want to see a sizeable advance to at least $50 to make a better assessment where the stock is located, so time is ticking....


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## rimtas (11 June 2015)

It took time, but it's finally here. The current structure looks best as a double three correction, which looks complete. The fact that WES bottomed on the lower trendline, adds more confidence to the count. 

So short term I expect it to rally towards upper trendline which sits at $43,5-44 area. If it manages to break it up, it would be bullish. 
I am aware that WES could still make another "Three" from the area mentioned, but this would create the Triple Zigzag, which can be a Leading Diagonal, especially if prices break the DEC 2014 bottom of $40.23.  But let's leave this for the future, as short term rebound looks more likely.


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## rimtas (18 June 2015)

Both lows that were the ground for the bullish trend to continue were taken out today(in yellow). I expected that WES will hold strong relative to WOW which is entering in a crash stage, but market sees that selling both is the right thing. This technical development  leaves two scenarios, both bearish.
 First is that wave (4) is in progress, with final wave C in operation. Though it started to decline in three waves from wave B top, but sometimes less likely scenarios are on the scene, unfortunately. I will monitor how this scenario develops, but if $37,75 is taken out, most likely larger bear is in progress, which is the second alternate.

Under this scenario all Five waves from 2009 bottom are in place (per grey Alt. line)and the large correction is on its way, that probably will carry prices back to GFC lows in the years to come.

I started to notice that bullish counts on many stocks just seems to refuse to develop further after the March All Ords Top at ~6000, which only increases suspicions that this top was Terminal. Still no evidence on the Table(five down/three up) to confirm this on the Index, but such stocks like TLS, WOW and now WES are only adding more weight in favour to bears. 
The bottom line is to determine this well in advance, not when the GFC lows will be taken out and when it will be too late to sell.


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## notting (14 January 2016)

Wesfarmers looks to 'Master' the UK. :shake:

http://www.afr.com/brand/chanticleer/wesfarmers-takes-first-step-offshore-with-bunnings-uk-push-20160113-gm5jtj


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## Value Hunter (10 June 2016)

Wesfarmers is a dog company with dog management and a dog board of directors. 

Earnings Per share in FY2006 was $2.84 or $2.356 if you exclude the one of gain from the sale of a subsidiary. Based on the $2.356 EPS figure Return on Equity was 31.1%

Fast forward to the forecast result for FY2016. They will likely earn somewhere around $2.50 per share if you exclude the massive write-downs and restructuring costs which are supposedly one off (I doubt it). That is roughly a 6% (total increase, not the annual increase) increase in "underlying" EPS (earnings actually went backwards on a statutory basis) in ten years. That is far less than the rate of CPI inflation. 

In the interim they have injected a massive amount of equity into the business of over the past ten years because they issued a lot of shares to purchase Coles and then issued more shares during the depths of the GFC after the share price had tanked (worst timing ever) to reduce the debt used to help fund the acquisition. Also they retained a fair bit of earnings over the past ten years. 

They will be lucky if they can get a return on equity of 10-12% this year (excluding "one-off" costs). This is down from over 30% ten years ago. 

Meanwhile each year the management and board of directors as a group collectively are paid tens of millions of dollars for this woeful performance. If you add up the compensation of the board of directors and the top 20 or 30 executives (the Wesfarmers group ones and the subsidiary ones) collectively they would have received hundreds of millions of dollars over the past ten years for this woeful performance. 

The massive write-downs at Target and the coal business coupled with the previous accounting scandal at Target and the ill-advised U.K. hardware chain acquisition are signs of the continued ineptness of the board and management. 

Bunnings is a badly managed company that has only done well in Australia due to the piss weak competition. If they were operating in the U.S. or U.K. market they would have shut down years ago.

Before Richard Goyder came along (incidentally a year into his reign EPS peaked) Wesfarmers was a very well managed and disciplined company. Then a Muppet named Richard Goyder came along and ****ed everything up by overpaying for Coles, poorly timing a capital raising in the depths of the GFC, investing badly in the resources division (very pro-cyclical as opposed to counter-cyclical) and poor oversight of Target not to mention their U.K. hardware chain acquisition which will likely end in tears.


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## oldblue (13 June 2016)

I wonder what brought that on?


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## skc (13 June 2016)

oldblue said:


> I wonder what brought that on?




A bad customer experience at Bunnings?

I don't disagree with much of what he's saying though. WES under Michael Chaney was really a quite a great company. It was discipline with it's growth and financially focused. Taking over Coles immediately prior to GFC damaged it's balance sheet, and subsequently, ROE substantially. Although you have to give credit to the operational team for turning Coles around to the point that it has Woolies' throat under its boots... financially it hasn't been done that efficiently. 

But... thanks to the low interest rate and the magic of earnings multiple expansion, WES can still enjoy record share price not that long ago.


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## Ves (14 June 2016)

skc said:


> But... thanks to the low interest rate and the magic of earnings multiple expansion, WES can still enjoy record share price not that long ago.



I haven't had a look in a while.

But from what I remember,  if you compare the divisional performance of what they owned in 2015 to what they owned pre-Coles acquisition in 2007 the comparatives are pretty similar despite 8 years passing.  Everything has arguably gone backwards except Home Improvement.  You'd also need to adjust for the few things they've sold (ie. the insurance book).

Value Hunter,  it's not really far to say that it's significantly damaged their ROE without providing a hypothetical situation of what it might look like 8 years later if they didn't buy the Coles Group.

I would argue that the earnings multiple has increased because they can plough excess capital into a profitable franchise  (which, except for Bunnings,  was not possible before the Coles acquisition).


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## Value Hunter (15 June 2016)

Its hard to say what the financials would have been like had Wesfarmers not acquired Coles. Because who knows what else they would have done. If they acquired no businesses they would be doing even worse now due to the bad performance from the resources division. However if they bought another business at a later date who knows. 

As to being able to re-invest in a profitable franchise:
-Going forward in the next 5-10 years, Coles will (despite the 1-3 year outlook being rosy) face a dramatic slowdown in earnings growth due to Aldi and Costco continuing to take market share and push prices and margins lower across the industry. 
-Bunnings will do well in Australia, but in my opinion this will be counterbalanced somewhat by the U.K. hardware division doing poorly in the future (Wesfarmers is woeful at retailing and will not be able to compete effectively in a highly competitive overseas market liker the U.K.)


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## Ves (16 June 2016)

So,  if there's a difference between the historical ROE  (which obviously includes the goodwill) and the incremental ROE from future investments,  which would you use if valuing the company?

It appears from:



> They will be lucky if they can get a return on equity of 10-12% this year (excluding "one-off" costs). This is down from over 30% ten years ago.




that you are only considering the historical ROE.

Which,  in my opinion,  isn't correct.


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## Value Hunter (17 June 2016)

Ves, I hear what you are saying, but my counter to that is its for the most part it is the same board of directors and management team that were in place when the Coles acquisition happened which bloated the balance sheet with a lot of goodwill which is arguably worthless and hence destroyed a lot of value. To say that the same idiots will not make further idiotic mistakes in the future which will depress incremental ROE would be an overly optimistic assessment. 

Based on my previous post I think long-term future incremental ROE will decline because resources will remain in the doldrums, Coles will suffer from a stronger Aldi and Costco (and potentially a rejuvenated Woolworths) and the U.K. hardware acquisition will do poorly thus weighing down Bunnings. Also I am not convinced that both K-Mart and Target can be strong performers simultaneously in the future.


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## notting (28 June 2016)

For some reason I have just been wanting to short this for a week or two.  Before looking at any chart even or thinking too much about it other than Coles has had it's day in the sun.
It will be interesting to see how Masters breaks up.  It would be great if someone bought out some of the better performing stores and sold the rest and provided a genuine alternative to Bunnings.
The obvious candidate would be MTS and add the good ones to Mitre 10 franchise.  But don't think they have the gumption at this point and it would probably freak out share holders.

Never the less Gods are telling me to short WES.
Time will tell if I just need to take my meds.


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## Garpal Gumnut (19 May 2017)

WES seems to have jumped the shark. I waited until it went ex div and sold. 

I reckon if it goes below $42 it will meander down to $34 before stabilising.

gg


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## sptrawler (19 May 2017)

The only thing going for Wes, is a nimble management, it will take nerves of steel to navigate through the next two years.


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## Garpal Gumnut (20 May 2017)

Management has always been good at the conglomerate.

I think WES will pause at $36 which has been support and resistance in the past. 

The RSI on the five year weekly chart is definitely a worry.

gg


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## Garpal Gumnut (1 June 2017)

sptrawler said:


> The only thing going for Wes, is a nimble management, it will take nerves of steel to navigate through the next two years.




Well Morgan Stanley have an underperform on WES today (via The Australian) and reckon $36 is it's fate. 

They must have been reading ASF.

gg


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## Quant (1 June 2017)

Garpal Gumnut said:


> Well Morgan Stanley have an underperform on WES today (via The Australian) and reckon $36 is it's fate.
> 
> They must have been reading ASF.
> 
> gg



WES is pretty well nothing but a yield play really , at 38 bucks its at 5% FF . I think only way it goes much lower is on a market wide selldown ( index ) . hell at 38 I might even get interested for a SMSF trade  .


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## Garpal Gumnut (1 June 2017)

A number of events could lower profits and the div. yield however, Q.

A failure of Bunnings in the UK and Ireland.
The Amazon effect on Officeworks, Coles and even Bunnings here.
The coal price and or currency fluctuations for coal.

I'd not jump in for my SMSF, at $36, in fact I sold all my SMSF WES after they went ex-div this year.

Then again they have survived for a long time with good initiative and management. The price will recover from $41.37, it went as low as $40.70 today if Elliott Wave theory holds, although it may dally about $40 for a while until the next move down.

gg


Quant said:


> WES is pretty well nothing but a yield play really , at 38 bucks its at 5% FF . I think only way it goes much lower is on a market wide selldown ( index ) . hell at 38 I might even get interested for a SMSF trade  .
> 
> 
> 
> ...


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## Quant (1 June 2017)

Garpal Gumnut said:


> A number of events could lower profits and the div. yield however, Q.
> 
> A failure of Bunnings in the UK and Ireland.
> The Amazon effect on Officeworks, Coles and even Bunnings here.
> The coal price and or currency fluctuations for coal.




I wont be in WES long enough for any of these events to have effect . I am a trader  not an investor  . 4-8 week holds about my space . Time is risk and in that period i will likely return > the average annual super return .  Rock on


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## Garpal Gumnut (2 June 2017)

Quant said:


> I wont be in WES long enough for any of these events to have effect . I am a trader  not an investor  . 4-8 week holds about my space . Time is risk and in that period i will likely return > the average annual super return .  Rock on



Not a bad way to go if your stocks trade in a range in a SMSF.

gg


----------



## Garpal Gumnut (28 July 2017)

I'd be watching the volume and price this afternoon on WES due to the ASX selloff.

If it goes below $40.50 with another 1 million trades it could reach or even break below $40.


----------



## Garpal Gumnut (9 February 2018)

I pity anyone holding on to WES for the divi atm.

Once it's gone ex-div WES will drop to $35.

It's not a bad outfit.

I plan to go back in when it approaches $32 ( sold for $44+ about 6mo ago)

gg


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## greggles (16 March 2018)

Wesfarmers to spin-off the Coles supermarket business.

http://www.abc.net.au/news/2018-03-16/wesfamers-to-demerge-its-coles-supermarket-chain/9554658

Wesfarmers has done a lot to turn around the Coles business and successfully re-position it in the market. That being said, is demerging Coles into a separate listed entity in the best interests of WES shareholders?


----------



## PZ99 (16 March 2018)

greggles said:


> Wesfarmers to spin-off the Coles supermarket business.
> 
> http://www.abc.net.au/news/2018-03-16/wesfamers-to-demerge-its-coles-supermarket-chain/9554658
> 
> Wesfarmers has done a lot to turn around the Coles business and successfully re-position it in the market. That being said, is demerging Coles into a separate listed entity in the best interests of WES shareholders?



Long term, I'd say yes. There are some big players entering the supermarket business over the next few years and the Coles / Woolies warfare has taken its toll on profits for both sides.

Curious where WES are going... maybe property aka Goodman etc ?


----------



## greggles (16 March 2018)

PZ99 said:


> Long term, I'd say yes. There are some big players entering the supermarket business over the next few years and the Coles / Woolies warfare has taken its toll on profits for both sides.



WES certainly needed to do something to generate some excitement. Its share price has been mostly range trading between $39 and $45 for the last five years. Not the most compelling stock on the ASX but with a market cap of almost $50 billion it's certainly one of the largest.

It's up around 6% this morning to $43.67, so perhaps the Coles news will see it break through $45 convincingly in the near term.


----------



## Knobby22 (16 March 2018)

greggles said:


> Wesfarmers to spin-off the Coles supermarket business.
> 
> http://www.abc.net.au/news/2018-03-16/wesfamers-to-demerge-its-coles-supermarket-chain/9554658
> 
> Wesfarmers has done a lot to turn around the Coles business and successfully re-position it in the market. That being said, is demerging Coles into a separate listed entity in the best interests of WES shareholders?



I reckon it is, though I don't own. From a duopoly to strong competition, it needs to be run by a single minded team and can't afford to be part of a conglomerate anymore. Also I can't see great levels of growth in the future so why not free up the balance sheet.


----------



## PZ99 (15 August 2018)

*Wesfarmers profit down 58pc to $1.2 billion as impact of UK experiment hits home*
By business reporter Stephen Letts

Wesfarmers brief, expensive and ultimately failed foray into the UK home improvements market has dragged down its full year profit by almost 60 per cent to $1.2 billion.

The Bunnings UK operation, which was sold earlier this year for the token amount of 1 pound, carved $1.4 billion off the profit.

However, that wasn't the only hit to its bottom line with earnings at its Coles supermarket chain falling 7 per cent to $1.5 billion.

Underlying earnings, stripping out one-off items, was down a more moderate 3.5 per cent to $2.8 billion on last year, but ahead of market expectations.

The company has maintained the full year dividend at last year's level of $2.23 per share.

http://www.abc.net.au/news/2018-08-15/10120354


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## Garpal Gumnut (5 October 2018)

greggles said:


> WES certainly needed to do something to generate some excitement. Its share price has been mostly range trading between $39 and $45 for the last five years. Not the most compelling stock on the ASX but with a market cap of almost $50 billion it's certainly one of the largest.
> 
> It's up around 6% this morning to $43.67, so perhaps the Coles news will see it break through $45 convincingly in the near term.
> 
> View attachment 86627




It all happened today.

WES has been a lazy div buy/sell later stock for me for many years.

WES shareholders to get 1/1 New Coles shares.

WES keep KMart, Flybuys, Bunnings, Officeworks, Industrials, Mining and some more.

Market in WES flailing this arvo. Up n down like a bride's right to bear arms.

gg


----------



## bigdog (17 October 2018)

*Amazon Australia now sells pantry food*






*WES SP down $-0.16 and ASX up 52 points today*

*WOW $27.585 $+0.095 +0.35%*


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## Lantern (3 May 2019)

https://reneweconomy.com.au/wesfarm...-electric-cars-australia-should-follow-50346/

Just months after selling the last of its thermal coal assets, Wesfarmers – one of Australia’s leading business conglomerates – has made a $776 million play to enter the lithium market and tap into the opportunities of the global switch to electric vehicles.

The rest of the country should take note.

Last December, Wesfarmers complete the sale of the last of its thermal coal mines – the type used to power generators in Australia and overseas – and happily for its shareholders pocketed a massive profit of around $680 million from the $860 million sale price.


It said at the time that the Bengalla coal mine in New South Wales was a world-class asset. That probably made the buyer – New Hope Coal – feel good about its purchase. But it hasn’t turned out so well: New Hope’s shares have slumped badly as investors wake up to the idea that betting the house on a coal-based future may not be such a grand idea.


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## sptrawler (12 June 2019)

Wesfarmers getting into the online retailing space with a splash, buying up "catch of the day" for $230m, I guess they have a ready built platform to build on.
https://www.google.com/search?q=wes...e..69i57j33.8115j1j7&sourceid=chrome&ie=UTF-8


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## Miner (20 June 2019)

WES and COL holders (to be repeated on COL)
I thought to share the snippet from Motley Fool Share Advisor - the following are their reported performance following recommendationi in 2015 (I have not checked the calculation) and today 20 June they have said SELL both the shares.
Incidentally at the COB today 20/6, both WES and COL closed with increased price.

Wesfarmers Limited and COLES GROUP DEF SET  ASX:WES ASX:COL 26/06/15 BUY N/A  N/A  53.2% 43.8%

_"Today we have decided to close out a recommendation we made back in 2015 by selling *Wesfarmers* (ASX:WES) and *Coles* (ASX:COL).

As you’ll likely know, Coles was spun out of Wesfarmers, giving us a (smaller) parent and a newly listed child. We sat on them both while we waited for the dust to settle, but now we know enough.

And, unfortunately, there’s a twist in the tale. Read on, Fool!

Coles was always a curious case.

The business is arguably one of the most mature businesses on the ASX. Despite some newer players, such as Aldi, taking market share over the past few years, the supermarket duopoly between Coles and *Woolworths* (ASX:WOW) remains strong with both players still owning around 30% of the market each according to Roy Morgan." _​D*isclaimer - I do hold COL and always mix wine and salt with MF recommendations. DYOR*


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## Dona Ferentes (18 February 2020)

Wesfarmers is taking advantage of record highs in the Coles share price and generally buoyant conditions in equity markets to sell off $1.1bn of its stake in Coles, representing one third of its total holding, marking the next step in its demerger and eventual sell down of its holding in the supermarket group.

After the market closed on Tuesday, and following the release of Coles’ first half results, Wesfarmers announced it had entered into an underwriting agreement with two lead managers to sell 4.9 per cent of the issued capital of Coles. Following the sale process, Wesfarmers will retain a minority interest of 10.1 per cent in Coles and its right to nominate a director on the Coles board, maintaining the ongoing relationship between the two companies since the demerger of Coles from Wesfarmers in November 2018.


> The sell down comes as Wesfarmers managing director Rob Scott is continuing to reshape Wesfarmers, which has seen him in the past few years generate billions of dollars in revenue from the sale of its Bengalla coal mine, the sale of Kmary Tyre and Auto as well as the sale of Quadrant Energy.



_Bunnings and Lithium conglomerate, with a dash of data analytics/ IoT tech?_


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## Miner (18 February 2020)

I feel it will help Coles on medium to long term without being under cradle and utilise cash. 
Mind you Wesfarmer will still have interest on rest of the capital and a Director on Coles board. 
In short profit is good  but WES would look after balance 2/3 of the investment.
Hope market takes a short term pain (?)


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## Dona Ferentes (31 March 2020)

WES sold another 5.2% of Coles. Received slightly less than earlier offload, and will bank $1.06b. plus gave up director seat.

Some are saying this move builds a war chest for future acquisitions (possible) but it could prudent positioning. A cash buffer may be needed to meet considerable financial obligations, with a potential scenario of enforced retail closure and reduced demand but still having creditor payments.

 Last financial year, Wesfarmers had $2.3bn of net financial debt, trade and other payables of $4.1bn and provisions, mostly relating to employee entitlements, of $1.1bn.


> “Under a scenario of reduced retail demand... creditors still need to be paid and new season’s stock needs to be bought,” analysts said. "If employees are stood down, leave balances need to be paid.”



Based on the first six months of the 2020 financial year figures, the potential cash outflow related to creditors and employee entitlements is more than $5bn.

- _can see why they want Kmart and Target to stay open. All that stock._


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## Garpal Gumnut (2 April 2020)

WES got a bit of a run in the SMH via an advertorial type article for it, amongst others, courtesy of Macquarie, wizards of the stunted universe. 

My guess is it will stay around $30 for a while before consolidating with a small possibility of hitting $20. Talk of it taking over Qantas. I'm loaded up on it in my SMSF, but may add especially if hits mid to low $20's.

A chart, a monthly over 10 years. If this bug don't get me I'll keep it for another 10. It's a survivor. 

gg


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## matty77 (2 April 2020)

A consistent non out performer I guess, but you know what you are going to get.

Makes me wonder if they are accumulating cash to make some purchases post Corona, divest some COL and use that for something else.

Officeworks and Bunnings are having a bumper time at the moment, sales up over 40% during March period alone, this probably cant be sustained over the long term though so expect to slow down as Corona takes over and people hide..

Bunnings never do anything unless forced, think when Masters came in they got their $hit together big time to compete, no more sloppy admin and wasting of money and automatic growth, they had to work harder and smarter. Anyway it seems the Corona may have now woken them to the importance of online sales and delivery and this will be a big focus going forward for them with lots of potential. Lots of inventory optimization and changes going on in the background which will bring more money back into the business, think along the lines of a far superior GMROI.

QAN.. ? now that would be a interesting one..


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## sptrawler (2 April 2020)

Wes are cashed up and patient, as GG I also hold and will add on weakness, the trick is timing IMO.


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## Dona Ferentes (2 April 2020)

The wishlist of who others think WES will buy and the likely outcome are probably far apart. 

Bunnings, data and lithium - I doubt there is another conglomerate like it. Hope their discipline holds in the coming buyfest.


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## sptrawler (2 April 2020)

Dona Ferentes said:


> The wishlist of who others think WES will buy and the likely outcome are probably far apart.
> 
> Bunnings, data and lithium - I doubt there is another conglomerate like it. Hope their discipline holds in the coming buyfest.



I cant see QAN being on the wish list myself.


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## sptrawler (3 April 2020)

Dona Ferentes said:


> The wishlist of who others think WES will buy and the likely outcome are probably far apart.
> 
> Bunnings, data and lithium - I doubt there is another conglomerate like it. Hope their discipline holds in the coming buyfest.



The problem is what is worth buying in Australia, even if it is  cheap.
Buy a bank and you have the problem of being expected to lend money to everyone, even to those who would rather spend their money on something else, rather than pay it back.
Buy into superannuation, why, everyone expects to make money not lose it. 
So it becomes the next banking Royal Commission, already some super funds are asking for help due to insufficient liquidity and the baby boomers haven't even retired yet.
Mining well that works well ATM, but eventually when it is the last business standing, taxation will come down hard.
Manufacturing, there isn't any manufacturing that is going to take the World by storm and anything that looks promising moves offshore to bigger markets and lower taxes.
So what WES buys will be very interesting IMO, it may well give us an indication of where the big money sees growth.


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## Garpal Gumnut (3 April 2020)

sptrawler said:


> I cant see QAN being on the wish list myself.




I am told QAN have no cash.

WES were cashed dup to the nines even before this bug hit. Selling down more COL is icing on cake.

IF WES directors get the nod from the Feds they will be in like Flynn imo.

gg


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## Dona Ferentes (3 April 2020)

Garpal Gumnut said:


> I am told QAN have no cash.
> 
> WES were cashed up to the nines even before this bug hit. Selling down more COL is icing on cake.
> 
> IF WES directors get the nod from the Feds they will be in like Flynn imo.



Can't see it. Somehow the WES process, with strict Rates of Return parameters. Rob Scott, new honcho, seems more focused on emerging industries. IT and software solutions for supply chains (Catch, Bunnings on-line) or efficiencies (*Kidman Transaction Rationale*
• Global uptake of electric vehicles presents an attractive opportunity
• Investment in a globally significant, high-grade lithium project
• Opportunity to leverage Wesfarmers’ expertise & capabilities in chemical processing
• Partnership with an industry leader)Of course the company missed out on Lynas

Reflecting on WES 'style', from april 2019







> But any conglomerate that is selling assets also needs to be developing its own or buying. And with more than $10 billion at its disposal, Scott had Wesfarmers' large corporate development team hunting for opportunities. Scott, a former investment banker, previously ran Wesfarmers' industrials, insurance and financial services businesses, and worked in its in-house dealmaking unit, corporate development. He had told investment bankers he respected the company's conglomerate roots and had every intention of keeping it going.





> He also had some well-regarded former private equity dealmakers to help reshape and restock the portfolio, including former KKR Australia executive Ed Bostock as head of business development, ex-Virgin Group co-CEO and Goldman Sachs alumnus David Baxby as industrials boss, and former Catalyst Investment Managers operative Aaron Hood.
> 
> So bankers stepped up pitching to Wesfarmers' Scott and his wider team. Bankers say they were never given guidance on Wesfarmers' preferred investment size or sector, but knew Scott was keen on a portfolio-style approach that promised a handful of deals over a few years rather than one big bet like Coles. There are stories about all sorts of ideas being pitched – some given more thought than others.



https://www.afr.com/companies/manuf...ott-and-his-m-and-a-war-chest-20190331-p519aa


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## Garpal Gumnut (3 April 2020)

Dona Ferentes said:


> Can't see it. Somehow the WES process, with strict Rates of Return parameters. Rob Scott, new honcho, seems more focused on emerging industries. IT and software solutions for supply chains (Catch, Bunnings on-line) or efficiencies (*Kidman Transaction Rationale*
> • Global uptake of electric vehicles presents an attractive opportunity
> • Investment in a globally significant, high-grade lithium project
> • Opportunity to leverage Wesfarmers’ expertise & capabilities in chemical processing
> ...



Good points, O Greek one.

May not occur now when everyone is watching. 

May occur when ROI is a given. At the bottom. 

One or two trojan horses from WES in QAN as we speak.

gg


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## Dona Ferentes (3 April 2020)

Garpal Gumnut said:


> One or two trojan horses from WES in QAN as we speak.
> 
> gg



like an ex-Virgin Group co-CEO ?!?!?! (as mentioned in AFR article <from April Fools Day 2019>)


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## galumay (3 April 2020)

What they should do is pay down some of the debt with the cash, but that sort of responsible capital allocation is unlikely.


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## Garpal Gumnut (3 April 2020)

Dona Ferentes said:


> like an ex-Virgin Group co-CEO ?!?!?! (as mentioned in AFR article <from April Fools Day 2019>)



In times of war, plague and famine we make unlikely friends. 

gg


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## CBerg (3 April 2020)

Didn't these guys overpay badly for Coles in the first place? What's to say the cash burning a hole in their pockets is going to be used wisely this time?


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## Dona Ferentes (8 May 2020)

Wesfarmers is sitting on more than $2bn in cash following the partial sell down of its stake in Coles; speaking at a Macquarie conference, CEO Rob Scott said it would look to invest in online. 







> “In terms of online investment we will very much be led by the divisions, and by the customer I guess, in how much we spend and how quickly we spend, we are seeing some great opportunities to invest in the digital space. “Interestingly, because a lot of software is cloud-based solutions, the upfront costs associated with a number of these are materially lower than they were five to 10 years ago. So a lot of the investment we are making is more opex (operational) than capex (capital) and you can get quite a lot of bang for your buck in terms of the investment you make.”





> Mr Scott said he expected more significant online investments to be made in its Bunnings, Kmart and Catch businesses,  where "the online marketplace was already finding capacity constraints at its distribution centres. "



but no mention of Target !!


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## Garpal Gumnut (8 May 2020)

Dona Ferentes said:


> Wesfarmers is sitting on more than $2bn in cash following the partial sell down of its stake in Coles; speaking at a Macquarie conference, CEO Rob Scott said it would look to invest in online. but no mention of Target !!



Target has been factored in to the accounts as far as I know, or will be. 

The Cloud investing opportunity was not one I was aware of. 

gg


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## Dona Ferentes (8 May 2020)

Garpal Gumnut said:


> Target has been factored in to the accounts as far as I know, or will be.
> 
> The Cloud investing opportunity was not one I was aware of.
> 
> gg



Wesfarmers was also learning new digital skills from its recent acquisition of *Catch*.

“We have seen very strong growth in sales in the Catch marketplace and we have also learnt a lot about the digital experience within the Catch business that we have been able to roll out in some of our other businesses,’’ Rob Scott said.


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## Garpal Gumnut (3 August 2020)

I do wish WES would retrace to $40 or break up through $50 so that I can add to my holdings. 

Where are Pete Evans, Qanon, assorted Witches and Sovereign Citizens to disrupt the sausage sizzle at Bunnings when one needs them. 

In the old days cooks, jesters and wizards were traded as chattels between people of worth. Now they are spoken to nicely by the constabulary. 

A chart at 12.51 pm .







gg


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## sptrawler (15 December 2020)

Looks as though Wes is getting some software smarts into the team, sounds like a good move to me.



			https://www.wesfarmers.com.au/docs/default-source/asx-announcements/director-appointment7b796b6999c863f7bfccff00000e9025.pdf?sfvrsn=1db108bb_0
		


I do hold


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## Dona Ferentes (15 December 2020)

Garpal Gumnut said:


> I do wish WES would retrace to $40 or break up through $50 so that I can add to my holdings.
> gg



Sizzling ... now $51 a share


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## Garpal Gumnut (30 December 2020)

Well 2021 beckons and I for one am looking forward to it. WES is one of the cornerstones of my SMSF. 

It's a value company all cashed up and the long term trend is up. 

I'm trusting it cracks $100 before this time next year.

gg


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## Dona Ferentes (25 January 2021)

Garpal Gumnut said:


> It's a value company all cashed up and the long term trend is up.
> 
> I'm trusting it cracks $100 before this time next year.



and heading in the right direction, going in to reporting season. WES has been remarkably quiet on the deployment of the war chest from selling down Coles . (Incidentally COL + WES is well over $70; WOW doing well too)

Maybe the price action is for the rerating as a Lithium company?

_Three year chart_





(HOLD, both SMSF and own name)


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## sptrawler (25 January 2021)

It will be interesting to see if they have a target, for all their cash.

I do hold.


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## Dona Ferentes (6 February 2021)

I never knew *geeks2U* was a WES company , aligned through Officeworks


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## Dona Ferentes (17 February 2021)

Wesfarmers Limited (ASX: WES) today announced the *joint approval, together with Sociedad Quimica y Minera de Chile S.A. (SQM), of the final investment decision*_ for the* Mt Holland lithium project*, and committed initial funding. Full funding will be committed upon receiving environmental approvals for the Kwinana refinery, which are anticipated in early FY2022._ 


(WES reports tomorrow; Hold)


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## bk1 (17 February 2021)

I don't blame them for taking their time, thats a lot of money..
Wesfarmers share of capital expenditure for the development of the project is estimated at approximately $950 million.


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## sptrawler (17 February 2021)

Dona Ferentes said:


> Wesfarmers Limited (ASX: WES) today announced the *joint approval, together with Sociedad Quimica y Minera de Chile S.A. (SQM), of the final investment decision*_ for the* Mt Holland lithium project*, and committed initial funding. Full funding will be committed upon receiving environmental approvals for the Kwinana refinery, which are anticipated in early FY2022._
> 
> 
> (WES reports tomorrow; Hold)



The refinery is interesting, there already is a lithium hydroxide refinery 90% complete at Kwinana.
Is Wes talking of a second refinery? If so that really will give the Kwinana industrial strip a shot in the arm.


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## Dona Ferentes (17 February 2021)

sptrawler said:


> The refinery is interesting, there already is a lithium hydroxide refinery 90% complete at Kwinana.
> Is Wes talking of a second refinery? If so that really will give the Kwinana industrial strip a shot in the arm.



it would appear so. ....  from 2019


> At its peak, the [Tianqi] refinery will spit out 100,000 tonnes of Lithium Hydroxide (LiOH) each year, which translate to more than a third of the world’s demand for the metal. *Another refinery* planned close by in Kwinana will be producing nearly half the production of this plant.




from https://www.covalentlithium.com/refinery .. (being the 50:50 WES/ SQM JV) ... and 2021


> ... our objective is to produce approximately 45,000 tonnes of lithium hydroxide per year, once our plant has been completed


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## sptrawler (17 February 2021)

Dona Ferentes said:


> it would appear so. ....  from 2019
> 
> 
> from https://www.covalentlithium.com/refinery .. (being the 50:50 WES/ SQM JV) ... and 2021



Obviously WES has a lot of confidence in the BEV revolution, last year making a play for rare earths, this year lithium.


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## Dona Ferentes (5 May 2021)

From today's presentation

Bunnings still expanding its footprint and service offering to _commercial trades_:
• Expanded supply and install product offer for builders
• New trade service desk format and more trailer parking spaces
• Increased PowerPass app functionality and engagement
• Opened new format *Adelaide Tools *store in Parafield, South Australia (March 2021)
• Agreement to acquire *Beaumont Tiles *in April 2021 (subject to conditions, including regulatory approval)

There is a lot about online marketing: a _focus on leveraging data and digital platforms to develop new revenue streams_
Divisional online penetration has been increasing y.o.y. and ranges from 37% for Officeworks (up from 29%), Target at 16% up from 7%, KMart at 8.7% up from 3.7% while Bunnings, at 3.1% from almost nothing, is the laggard. 

And the Mt Holland lithium project, including mine, concentrator on site and refinery at Kwinana: Wesfarmers’ expected share of total project capital expenditure estimated at approximately $950m
• Indicative construction timeline, subject to approvals:
– Project construction to commence: 2H CY21 
– First production from refinery: 2H CY24


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## Garpal Gumnut (5 May 2021)

Dona Ferentes said:


> From today's presentation
> 
> Bunnings still expanding its footprint and service offering to _commercial trades_:
> • Expanded supply and install product offer for builders
> ...



Steady as she goes, is WES. Well apart from UK expansion which seems a long way in the past now.

gg


----------



## Dona Ferentes (3 June 2021)

Wesfarmers said sales had fallen at some of its retail businesses and growth had slowed at others as they cycled a boom in spending on hardware, technology and homewares at the height of the pandemic last year.



> “Year-on-year sales growth had generally moderated and been negative in some months for some businesses, due to elevated activity in the prior year,” the company said in a high level trading update released at its annual strategy day on Thursday.




Online growth had moderated as customers returned to bricks and mortar stores and online penetration - e-commerce sales as a percentage of total sales - had fallen but remained above pre-COVID levels. 
For example, Bunnings’ online penetration had dropped below 2 per cent from 3.1 per cent at the end of December, while gross transaction values at Catch Group had been negative in recent months.

Wesfarmers chief executive Rob Scott provided no sales figures and did not elaborate on the performance of individual businesses, saying only that the group was experiencing “significant volatility” in monthly sales results.


----------



## Dona Ferentes (3 June 2021)

And, speaking at the Investment Day, CEO Rob Scott was confident about the group’s prospects for growth and happy about the quality of its portfolio following the demerger of Coles, the sale of coal and other assets, derisking Target by closing stores and slashing its cost base, and the restructure of industrial and safety supplier Blackwoods.


> “_We think we have a phenomenal mix of businesses that represent a unique balance between defensiveness and high cash generation and good growth perspectives,_” he said.




Mr Scott and chief financial officer Anthony Gianotti hinted that Wesfarmers, which is cashed up after selling two-thirds of its 15 per cent stake in Coles for more than $2 billion, was closer to returning surplus capital to shareholders, saying they were evaluating options to “right-size” the balance sheet and get capital back to investors.



> “I’ve consistently said it’s unlikely we’ll go out and do a really big acquisition, because often big acquisitions are very expensive and not in the best interests of shareholders,” Mr Scott told the _Financial Review_.





> “In terms of right-sizing the balance sheet, we acknowledge that we have plenty of capacity at the moment. We’re also not sitting on surplus franking credits, so if we were to get cash back to shareholders in a tax-effective way we’d need to consider a *capital return* which would require Tax Office approval and shareholder approval and those things take time.”


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## Dona Ferentes (16 June 2021)

Go, WES (young man)

<< another lift today... $57.13 close>>


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## Dona Ferentes (21 July 2021)

Dona Ferentes said:


> Go, WES (young man)
> 
> << another lift today... $57.13 close>>



there has been solid buying for WES of late ............ and pushing through $60 with ease ....   now $60.92

EDIT ... Update .... punching through $61


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## Dona Ferentes (3 August 2021)

WES $62.20 + COL $17.80 = $80 !!

Value creation.


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## bk1 (27 August 2021)

WES reported today, revenue up 10%, EBIT up 18% and NPAT 16%.
Final dividend of 0.90c a share.
A fairly neutral commentary on the Mt Holland Lithium venture, progressing as normal from what i can interpret.
WES is my major Lithium play. Net capital expenditure next FY(22) is expected to be of around 30% on the Mt Holland project alone.
SP is down 2.75% as the market digests the news.


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## divs4ever (27 August 2021)

Proposed return of capital to shareholders
Wesfarmers today announced a proposed return of capital to shareholders of $2.00 per share. The distribution is subject to approval by Wesfarmers shareholders at the Annual General Meeting (AGM) on 21 October 2021.
 If approved, the total amount of the distribution will be approximately $2.3 billion. Chief Financial Officer Anthony Gianotti said that the proposed return of surplus capital to shareholders reflects Wesfarmers’ commitment to efficient capital management and its focus on providing a satisfactory return to shareholders. “The proposed return of capital is enabled by the strength of the Group’s balance sheet, its access to well-established funding sources and the resilient and cash-generative nature of its businesses, as well as the receipt of proceeds from the sale of assets in recent years,” Mr Gianotti said. “Upon completion of the return of capital, Wesfarmers expects to retain its current strong credit ratings and maintain the balance sheet capacity to withstand a range of economic conditions, support continued investment in the Group’s businesses and take advantage of value-accretive opportunities as they arise. “The distribution will provide an opportunity to reset the capital structure and, together with the maturity of two Euro bonds in October 2021 and August 2022, will support the continued optimisation of the Group’s debt maturity profile and cost of borrowing.”
An application for a Class Ruling has been lodged with the Australian Taxation Office in relation to the form and taxation treatment of the proposed distribution. The form of the distribution is dependent on the Class Ruling, but is likely to be entirely capital in nature, with no dividend component. 
Shareholders will be unable to elect to participate in the Dividend Investment Plan in relation to the capital return. If the Class Ruling is issued in line with the application, it is expected to confirm that there is no immediate tax liability for most Wesfarmers shareholders relating to the capital return. Instead, the cost base of shares for capital gains tax purposes will be reduced by the capital component. For shareholders with a cost base of less than the capital component, an assessable capital gain could arise.
A detailed explanation of the proposal and confirmation of the timetable will be included with the Notice of Meeting which will be sent to shareholders in September 2021. If approved, shareholders are expected to receive their payments on 2 December 2021.

  DYOR

 i hold WES

 i am not over-joyed to see this , it implies WES cannot find good value in the investment market either  ( because i am as sure as heck , finding GOOD places to invest  difficult )


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## bk1 (27 August 2021)

I didn't comment on this aspect of the report, but that is my first instinct. Are they not sitting on a pile of cash looking for investment opportunities? Some of these Aussie big caps show little in the way of initiative or imagination.


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## qldfrog (27 August 2021)

bk1 said:


> I didn't comment on this aspect of the report, but that is my first instinct. Are they not sitting on a pile of cash looking for investment opportunities? Some of these Aussie big caps show little in the way of initiative or imagination.



they seem to forget that investment is not only buying an overpriced other listed company.disappointed but i sold most of wes when the trailing stop was hit last week? or early this week.
Actually sad when you think of it...


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## divs4ever (27 August 2021)

WES has made some rebuffed offers .. API was one that affected me  ,  but what else is there that MIGHT be a fit ( given WES is more an investment vehicle  than a diversified corporation , to my thinking )

 since they have divested COL , some potential targets  have been less attractive  , synergy-wise 

 ALSO WES is still wrestling on how to deal with Office-Works  , personally i hope they go for a property trust  similar to BWP , but who knows  after the rapid u-turn on the UK hardware adventure  ( i reckon the property trust spin-off would have been a better option there as well )

 last i heard WES is sitting on a very large pile of cash , BUT i am guessing the lithium play will need more cash in time  , so maybe not super large  ALSO WES thinks they have in-house mineral processing/manufacturing expertise  ,  so a possible bolt-on  to the lithium play is possible ( say battery manufacture )


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## divs4ever (27 August 2021)

please remember WES prefers to buy 100% of a business   whilst a similar investment vehicle  SOL  is quite happy to grab 20% of a company and put some directors on the board and steer it that way  ( most of the time )


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## bk1 (27 August 2021)

divs4ever said:


> say battery manufacture )



WES are the only aussie company that i forsee having the skills and the expertise to capture ANY of the *downstream* value of BEV in this country.
The value or the prize is huge. Look at the lengths the Indonesians (for example), are going to, to try and be players in this space.


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## divs4ever (27 August 2021)

bk1 said:


> WES are the only aussie company that i forsee having the skills and the expertise to capture ANY of the *downstream* value of BEV in this country.
> The value or the prize is huge. Look at the lengths the Indonesians (for example), are going to, to try and be players in this space.



 probably has the cash reserves ( and credit facility as well )

 but don't forget CSR , they have some skills in-house , just not so sure about the cash-pile


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## Garpal Gumnut (27 August 2021)

WES is a behemoth and it will get bigger. It is number 7 in the ASX by market capitalisation and I'd like to show the top 10 because this is the important comparison heading in to the unknown of Covid next year and next decade. Thanks to market index.com.au for the screenshot.

Five of the top ten are banks or financial institutions, while two are major miners, one is a major pharmaceutical and Woolies comes in last. WES to me always seems like a quiet achiever, beginning as a WA co-op and tightly run with its only major bugger up being its Bunnings foray in to the UK some years ago. 

It has returned capital today to shareholders in a tax efficient way because it can afford to. Quite apart from its profitable businesses alluded to in previous posts it is in the process of setting debt in place at low rates which will never be seen again. I would imagine this will be a mixture of short and long term appropriate to its acquisition plans. Debt for acquisition is better than capital in a low interest environment.

It will acquire because it can. It will pay bottom dollar and walk away from any haggling if necessary. Walking away is the best tactic when you are busy. It also sends a signal for future acquisition engagements. WES is very busy in everything from home improvement and outdoor living; apparel and general merchandise; office supplies; chemicals, energy and fertilisers, and industrial and safety products.

It is not bullet proof, no company in the present pandemic and national and international disruption and uncertainty is. 

WES forms an appropriately large part of my SMSF, while maintaining a conservative spread of investments, because of its diversity and proven capital gain and income stream, its focus on shareholder returns and its stability in an uncertain world.

I will keep on adding on weakness in the share price and I would not be surprised if in 10 years time it is number one on this list and involved to a major degree in the activities of the other nine. 

gg


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## Dona Ferentes (27 August 2021)

Garpal Gumnut said:


> WES is a behemoth and it will get bigger.



Totally agree, as long as the discipline they employ for allocating capital.  Wesfarmers under Rob Scott has seen the subtle shift in executive incentives to focus on ROE. Scott’s personal benchmark for achieving his bonus is an ROE target of 21.5 per cent.

In the day-to-day management of the company, however, *return on capital* is the prime driver of performance. _The Wesfarmers annual report says the ROC benchmark makes executives focus on increasing earnings or increasing earnings by managing existing assets efficiently, as well as making an adequate return on any new capital deployed._


Garpal Gumnut said:


> WES is very busy in everything from home improvement and outdoor living; apparel and general merchandise; office supplies; chemicals, energy and fertilisers, and industrial and safety products.



I think data analytics is (are?) their strength. Rob Scott has lifted investment in digital capabilities at Wesfarmers and is building what he calls a “data and digital ecosystem”, spending $100 million this year and reaching across the conglomerate. Officeworks (online sales penetration of 35 per cent in 2021) has seen members of its technology team move on to Bunnings (online sales at 2.3 per cent of total sales in 2021.)


Garpal Gumnut said:


> It is not bullet proof, no company in the present pandemic and national and international disruption and uncertainty is.



Staying national, plenty of avenues to explore. Bunnings UK probably reinforced that.

Happy to hold a truckload


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## qldfrog (28 August 2021)

Dona Ferentes said:


> Totally agree, as long as the discipline they employ for allocating capital.  Wesfarmers under Rob Scott has seen the subtle shift in executive incentives to focus on ROE. Scott’s personal benchmark for achieving his bonus is an ROE target of 21.5 per cent.
> 
> In the day-to-day management of the company, however, *return on capital* is the prime driver of performance. _The Wesfarmers annual report says the ROC benchmark makes executives focus on increasing earnings or increasing earnings by managing existing assets efficiently, as well as making an adequate return on any new capital deployed._
> 
> ...



Do not forget their LIT exposure know-how..just a bit sad they just give away that cash.maybe after getting the loans for even less?
My trailing stop was not 100% so i still owe some and yes, i believe it is a great company,probably the best out of the 10 listed above


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## divs4ever (29 August 2021)

Wesfarmers wary of mounting lockdown toll









						Wesfarmers wary of mounting lockdown toll
					

Wesfarmers leaders say lockdown impacts are mounting on staff and the company will pay a "material" cost to compensate thousands unable to work due to COVID-19.The Bunnings and Officeworks operator vowed to keep paying wages to workers sidelined by COVID measures until at least December 31, and...




					au.finance.yahoo.com
				




 DYOR

 i hold WES 

 so Ita Buttrose MIGHT be the single source of credible information on Covid in Australia

 well , WES has already signed up Alison Watkins to the board  , not a huge chance Ita will get an invite as well ... is there


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## divs4ever (29 August 2021)

Wesfarmers wary of mounting lockdown toll









						Wesfarmers wary of mounting lockdown toll
					

Wesfarmers leaders say lockdown impacts are mounting on staff and the company will pay a "material" cost to compensate thousands unable to work due to COVID-19.The Bunnings and Officeworks operator vowed to keep paying wages to workers sidelined by COVID measures until at least December 31, and...




					au.finance.yahoo.com
				




 DYOR

 i hold WES 

 so Ita Buttrose MIGHT be the single source of credible information on Covid in Australia

 well , WES has already signed up Alison Watkins to the board  , not a huge chance Ita will get an invite as well ... is there


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## Sean K (14 September 2021)

WES smashed since late Aug guidance. Must have been a downgrade on future growth in there that spooked the market.

Returning $2 later in the year with the sp currently $56. hmmm.

Good support across $56 too.


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## peter2 (14 September 2021)

I've also been considering a purchase of *WES* in a large cap portfolio. The recent dip in price back to support does provide a good risk:reward opportunity. Bunnings stores in Syd were closed for two weeks. A good move politically but I'm thinking it had more to do with staff management. They must have had many Covid positives and many more close contacts that had to isolate. The two week closure should have helped manage this inconvenience with minimal loss of sales. 

I'm unsure whether to buy this now or wait for the start of the next rally. I'm expecting a bit more weakness in the market late Sept as it's a seasonal tendency. If we see it then it'll provide many good RR opportunities. *WES* will be only one of them to buy.


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## divs4ever (14 September 2021)

i still DRP WES ,  but i stopped buying  on-market  back in December 2018 @ $31.17 ( AFTER the  COL spin-off )

 good luck 

DYOR


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## Garpal Gumnut (16 September 2021)

peter2 said:


> I've also been considering a purchase of *WES* in a large cap portfolio. The recent dip in price back to support does provide a good risk:reward opportunity. Bunnings stores in Syd were closed for two weeks. A good move politically but I'm thinking it had more to do with staff management. They must have had many Covid positives and many more close contacts that had to isolate. The two week closure should have helped manage this inconvenience with minimal loss of sales.
> 
> I'm unsure whether to buy this now or wait for the start of the next rally. I'm expecting a bit more weakness in the market late Sept as it's a seasonal tendency. If we see it then it'll provide many good RR opportunities. *WES* will be only one of them to buy.



API is in the bag now for WES. 

I expect pharmacies in Kmart or Bunnings before too long.

Come on late Sept. 

gg


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## mullokintyre (16 September 2021)

Garpal Gumnut said:


> API is in the bag now for WES.
> 
> I expect pharmacies in Kmart or Bunnings before too long.
> 
> ...



Ownership rules for pharmacies vary from state to state, but thanks to the Pharmacy Guild, in general, only a pharmacist or group of pharmacists can own a pharmacy. That  has not stopped the terry White group or Chemist warehouse from pretending its otherwise, but they still have artifical structures in place.
For Bunnings or Kmart to operate a pharmacy, they would have to somehow sublet an area to the pharmacist to run the dispensary, and maybe keep the retail side separate.
And they would struggle to staff them. 
My wife is fielding multiple calls per week to do locums , mostly in  remotely managed pharmacies where the owners(s) cannot get managers at any price, especially  outside the metropolitan area.
Mick


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## Dona Ferentes (16 September 2021)

> _Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules. If the proposal is successful, we see opportunities to invest to strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers......_





> _API would also provide the basis of a new  *Healthcare division* of Wesfarmers and a platform from which to invest and develop capabilities in the growing health, wellbeing and beauty sector._



.... The words of Rob Scott... 

 AFR has a bit of goss that this is just the start; watch for more takeovers . Rounding up the usual anonymous suspects


> _Industry sources believe that if ... successful, Wesfarmers is likely to follow up with other acquisitions, to create a_* $10 billion health, beauty and wellness business.*





> _It's a fast-growing health and beauty market. Eventually, there will be deregulation and they will be well positioned to capitalise on that ._


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## peter2 (20 September 2021)

Was disappointed that I couldn't buy some cheaper *WES* today. (ASX -2%). Tomorrow? 
Minimal sellers today indicates that *WES* is in demand at this support level.


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## Sean K (23 September 2021)

peter2 said:


> Was disappointed that I couldn't buy some cheaper *WES* today. (ASX -2%). Tomorrow?
> Minimal sellers today indicates that *WES* is in demand at this support level.




Unless there's a general market crash it looks like $56 was a nice time to dip in.

It's going to be interesting to see what people are going to do with all the money they've saved over the past 2 years once lock downs are over. Do you go on holidays, buy a new car, renovate the house, buy a second house, book into Attica, or go to Bunnings, Kmart and Officeworks and fill up the trolley with whatever.... A lot of money burning in pockets I reckon. I know there's click and collect, but still...


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## divs4ever (23 September 2021)

Garpal Gumnut said:


> API is in the bag now for WES.
> 
> I expect pharmacies in Kmart or Bunnings before too long.
> 
> ...



probably attached to Bunnings  , it the same building complex  booting on of the other smaller tenants

 i think they should have moved earlier   and parceled in the COL demerger ( i would still rather have kept the API  but an earlier takeover  would have had me with only half the API shares i have now

 but remember API is not just a couple of pharmacy chains  it is a whole distribution network ( and i suggest MTS would have been a better fit  with API )

 if  a co-tenant with Bunnings play  expect the transition to be fairly slow  , say limited to new Bunnings complexes and already  empty retail spaces in existing Bunnings complexes 

 good luck with the K-Mart/Target  play  unless they  do synergies with the cosmetics and such  , that might prove counter-productive ( more attractive to shop-lifting/employee theft )

 i also hold BWP and SCP ( which own a few Bunnings complexes as well )


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## Sean K (24 September 2021)

divs4ever said:


> probably attached to Bunnings  , it the same building complex  booting on of the other smaller tenants




And @Garpal Gumnut I think pharmacies in supermarkets would be the most logical place. So, they should buy out Coles and then create some more space within the shop, or tack a pharmacy onto the bottle shop - a one stop shop for your medication.


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## divs4ever (24 September 2021)

kennas said:


> And @Garpal Gumnut I think pharmacies in supermarkets would be the most logical place. So, they should buy out Coles and then create some more space within the shop, or tack a pharmacy onto the bottle shop - a one stop shop for your medication.



that would only make sense if you put the 'health-foods ' aisle inside the  'pharmacy section'  despite the contradiction  , and would probably reduce the impulse buying 

 but let's see if WES can make the acquisition work , i would be much more pessimistic if WOW was the predator


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## ProfitEqualsYummy (12 November 2021)

Hi all! My first post here. I was looking to buy WES a few weeks back when they were $54, but (regretably) didn't pull the plug. Still haven't pulled it either 

Back in August they were at $65 but have since dropped, anyone have some insight into why that happened?

Thanks all! Love the discussions on this place


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## peter2 (12 November 2021)

Hard to say for certain. As traders and investors we have to accept that the prices of our shares will go up and down at various times. 

There was an annual report presented, a $2 return of capital, *WES* made a takeover offer for *API* which looks like it's been accepted. Eastern states were in Covid lockdowns. These circumstances create some uncertainty about the immediate outlook for *WES*. Uncertainty creates price volatility. 

It's these situations that traders and investors wait for as they create a good opportunity to buy at lower prices. A trader must have a plan. The investor must have a conviction that *WES* remains fundamentally sound.


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## divs4ever (12 November 2021)

welcome to posting 

coming events for  WES

 is the $2 a share capital return 
 3.1 +Record date 19/11/2021
3.1a Effective date of the cash return of capital 16/11/2021 ( next Tuesday ) 

 also there is the progression of the API take-over  ( more likely since SIG has walked away )

  now i am AGAINST both these moves 

 the SIG offer suited me much better  ( although i would rather have API as a stand-alone holding as a first choice ) 

 and the $2 capital return is better ( imo ) than a share buy-back  , but i see it as an admission that management could not find a good place to invest the cash ( a sad statement for a company that is essentially an investment shell )

 now to my mind   $65  for WES AFTER they had unloaded COL is crazy money  maybe some thought the capital return would be more  like $10 a share 

 i last added  extra WES in December 2018 ( AFTER they divested COL ) @ $31.25  , so you can  see why i think WES is over valued currently

 since i couldn't understand  why WES hit $65  i am probably  not  a good judge on why you should buy them now at anything over $45  ( with or without the capital return )

maybe WES has some clever moves left in the trick-bag ( and they are as sure as heck  better than WOW )

 now one card WES has yet to play is the fate of Office-Works and that could be a biggie ( depending on what is decided )

 i am hoping for a REIT spin-off ( of Office-Works properties )  something similar to BWP 

 DYOR

 now remember WES is an investment vehicle ( one might even say a corporate raider , although less aggressive than some )


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## Dona Ferentes (12 November 2021)

ProfitEqualsYummy said:


> Hi all! My first post here. I was looking to buy WES a few weeks back when they were $54, but (regrettably) didn't pull the plug. Still haven't pulled it either
> 
> Back in August they were at $65 but have since dropped, anyone have some insight into why that happened?



First up, welcome.

I had a chuckle to myself, as I was thinking of topping up WES, probably around the same time. The chuckle then was probably relating to some rather self-serving comment from a fund manager in an Opinion Piece. Dated 17 Oct, it contained the usual "_I know better than you"_ hubris


> _"These are just some examples of companies that have been mispriced when investors succumb to their behavioural biases. Be contrarian and don’t let another salesperson tell you that buying Wesfarmers is a reopening trade._
> 
> "There are plenty of investment opportunities, investors just need to be discerning.



Now that date was when WES was just above $54, it had bounced along that level for about a week. Our _Very Important Columnist_ , operating in the stratified world of spending other peoples' money ( and taking a clip) , had either
a) the desire to buy some for self/ portfolio
b) seen some other fund manager espousing said BUY and wanted to score a point

and so came out with this backhander (the tips, by the way, were BHP, Star SGR and A2M <and WES doing better, 1 month on!>.)

_WES, in my opinion, isn't a reopening play; FLT may be!_

To answer your question, nothing has happened. Essentially WES is the same company/ corporation/ conglomerate. Inside WES, the company leaders; Bunnings, Officeworks, KMart, have done well through Covid but maybe that momentum is fading, the Lithium play is too early to tell and funds haven't been committed, and now the API takeover has happened and may introduce a level of concern.

I can't help you to decide when to buy. Long term it has been a great story, and probably will be for quite a while. (I hold)

One factor possibly at work is that GE, the archetype conglomerate but a mere shadow of former self, has announced it is breaking into 3 entities. Big money may look at this and wonder/ worry. WES and  Seven West Group SVW are the only Aussie echoes, and of course there is Berkshire Hathaway. Recent comment has revisited these themes:



> _Talk of a Wesfarmers break-up has surfaced from time to time, but the doubling of the group’s share price in the past five years – the stock sits just below the record high it hit in August – has naturally silenced any critics. The chief benefit of a conglomerate is that its different divisions perform in different ways, delivering investors steady returns throughout an economic cycle.
> 
> This, of course, is also the big weakness in the model, as exposed by GE’s travails – when a conglomerate gets too unwieldy, underperforming businesses start to detract from the star divisions, which must then prop up the broader group._






> _Both [WES and Seven Group] have been unemotional about selling, demerging or reducing their exposure to certain business units when it has made sense to do so. Wesfarmers’ willingness to do these types of deals – contemplating the spin-off of Officeworks in 2017, for example, and then demerging Coles in 2018 when it can create shareholder value rather than when it needs to dig itself out of a hole, as in the case of GE – has reassured investors that the group is vigilant about portfolio management.
> 
> Further, the repeated insistence by Wesfarmers boss Rob Scott that he will not be pressured into big-bang acquisitions for the sake of it, instead making smaller bets in areas adjacent to the group’s existing units, speaks to strong discipline and a refusal to get sucked in by the empire building that ultimately engulfed GE._


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## sptrawler (12 November 2021)

Sean K said:


> And @Garpal Gumnut I think pharmacies in supermarkets would be the most logical place. So, they should buy out Coles and then create some more space within the shop, or tack a pharmacy onto the bottle shop - a one stop shop for your medication.



I would think that the logical space for the pharmacy, health and beauty stuff to be sold, would be to rebrand the non performing Target stores that still have leases, as they are in major shopping centres and have been under performing for years. 
I do hold.


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## Sean K (12 November 2021)

ProfitEqualsYummy said:


> Hi all! My first post here. I was looking to buy WES a few weeks back when they were $54, but (regretably) didn't pull the plug. Still haven't pulled it either
> 
> Back in August they were at $65 but have since dropped, anyone have some insight into why that happened?
> 
> Thanks all! Love the discussions on this place




The reason for WES dropping at that time could have been for a number of reasons: The sectors it's invested in, the overall market sentiment, technical traders, bad news, making bad decisions, good decisions, takeovers, decisions on payouts, etc. A stock like WES in the long term might also follow general market trajectory with some ups and downs and sideways moves. Not sure if WES or the XAO has done better over 10 years.


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## divs4ever (12 November 2021)

sptrawler said:


> I would think that the logical space for the pharmacy, health and beauty stuff to be sold, would be to rebrand the non performing Target stores that still have leases, as they are in major shopping centres and have been under performing for years.
> I do hold.



 wouldn't that be a scary thought if you are a Myer shareholder  ( i have held and been burnt with MYR in the past  )

 ( say pharmacy , beauty and discontinued lines   from K-Mart )


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## sptrawler (12 November 2021)

Sean K said:


> The reason for WES dropping at that time could have been for a number of reasons: The sectors it's invested in, the overall market sentiment, technical traders, bad news, making bad decisions, good decisions, takeovers, decisions on payouts, etc. A stock like WES in the long term might also follow general market trajectory with some ups and downs and sideways moves. Not sure if WES or the XAO has done better over 10 years.
> 
> View attachment 132798



10 years ago when the GFC happened WES were $12, even if you bought them 5 years ago and included the 1 for 1 Coles shares, then add that onto the current WES price it wasn't a bad buy.
Check out WBC over the same period.


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## divs4ever (12 November 2021)

WES is an evolving beast  it has exited coal investments  , sold parts of K-Mart   looking rebrand Target , exited Coles  acquired Kidman Resources  , a work-wear/safety company   

 WES in 2011  is  a fairly different empire to today 

 i suppose the other important question is ... after the Cap. Return and API take-over  how big is the remaining war-chest  and where is it likely to invest next


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## sptrawler (12 November 2021)

divs4ever said:


> wouldn't that be a scary thought if you are a Myer shareholder  ( i have held and been burnt with MYR in the past  )
> 
> ( say pharmacy , beauty and discontinued lines   from K-Mart )



Myer is like the old Bunnings family store, before WES bought them out, slow clunky and stuck in the 1950's.
Before WES bought out Bunnings no one shopped there, they were expensive and trading on memories, Alco gave them a hard time, so did Mitre 10, once WES took over the rest is history.
Chemist warehouse will be very, very nervous IMO.


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## sptrawler (12 November 2021)

divs4ever said:


> WES is an evolving beast  it has exited coal investments  , sold parts of K-Mart   looking rebrand Target , exited Coles  acquired Kidman Resources  , a work-wear/safety company
> 
> WES in 2011  is  a fairly different empire to today
> 
> i suppose the other important question is ... after the Cap. Return and API take-over  how big is the remaining war-chest  and where is it likely to invest next



Someone IMO, is going to build a battery gigafactory in Kwinana, there are all the ingredients there, no shipping costs, close to a major population source of workers, port facilities, industrial area, power station close by. 
It is a no brainer, who does it is the $64k question.


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## divs4ever (12 November 2021)

i bought into WES initially in 2015  @ $42.07  , $40.35  and $39.50 ( although some of that was a result of swapping  BKL  shares @ $125  into WES )

 and after the COL demerger i chose to buy extra WES  , in preference to extra COL ( but i DID keep the COL )

 so yes WES  has been OK for me  ( but i have done better elsewhere and MUCH worse in other places )


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## divs4ever (12 November 2021)

since WES has it's lithium project  in South America   , there isn't ( so far ) a big chance that would be  WES 

 HOWEVER SVW  should not be totally unexpected  with a play like that  ,it could organize several moving parts to such a project quickly 

 neither should BHP be totally forgotten 

 but let's see . it will probably be a foreigner  flashing the big money


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## qldfrog (12 November 2021)

sptrawler said:


> 10 years ago when the GFC happened WES were $12, even if you bought them 5 years ago and included the 1 for 1 Coles shares, then add that onto the current WES price it wasn't a bad buy.
> Check out WBC over the same period.



It fell then because the frog had a substantial WES packet with a SL . once SL triggered,and wes sold at lowest, went up.
Should open the frog contrarian newsletter
"Just do not do what i do"😊


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## sptrawler (12 November 2021)

divs4ever said:


> since WES has it's lithium project  in South America   , there isn't ( so far ) a big chance that would be  WES




I don't know where you are getting your info from @divs4ever .









						Construction of new WA lithium refinery looms after EPA green light
					

Wesfarmers’ Mt Holland lithium project is expected to create over 1,000 jobs during construction and over 350 jobs during its operational phase




					www.smh.com.au


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## divs4ever (13 November 2021)

Wesfarmers, together with joint venture partner SQM, announced joint approval of the Final Investment Decision of the Mt Holland lithium project in February 2021. Covalent Lithium is continuing project development and commencing construction of the Mt Holland lithium mine, concentrator and Kwinana refinery following the receipt of critical regulatory approvals in July 2021. First production from the refinery is expected in the second half of calendar year 2024. WesCEF will continue to work on opportunities to better utilise or expand its existing operations through targeted investments and the use of data and analytics.

i won't be holding my breath on Kwinana

this MIGHT be more interesting mid-term   

Coregas focuses on hydrogen pilot The transition to a hydrogen economy is underway, and Australia is well-positioned to play a significant role thanks to its renewable resources and proximity to energy-hungry economies. Coregas is involved in Australia’s largest hydrogen project — the Hydrogen Energy Supply Chain gasification plant in the Latrobe Valley, Victoria — which will see Coregas aiming to load the world’s first liquid hydrogen ship in Victoria for transport to Japan. It aims to demonstrate the liquid hydrogen supply chain from production to shipment. If successful, it could lead to the establishment of one of the largest hydrogen hubs in the world. Coregas has also focused on developing domestic hydrogen mobility solutions. With support from the Port Kembla Community Investment Fund, Coregas aims to commission the first Australian hydrogen refuelling station for trucks. The station will have daily capacity for 10 hydrogen-powered trucks — also known as fuel cell electric vehicles. The first two hydrogen-powered prime movers will operate in the Coregas fleet from early 2022. Their emissions profile is around half that of diesel prime movers. There are more than 100,000 heavy trucks in Australia, so transitioning heavy transport will reduce carbon emissions and also noise, and particle pollution.

 my memory must be faulty  , i can't find what i wanted  in the last annual report  ( and am only half way through  it ) but if  i read another   mention of diversity ,  climate consciousness  or the rest of the virtue-signalling  , fair dinkum , i am going to throw up 

 one thing i am convinced of though , is  i am NOT in any hurry  to add extra WES above  $35


----------



## sptrawler (13 November 2021)

It sounds like we are going to have more hydrogen hubs than you can poke a stick at, I see where you are coming from @divs4ever , there is a lot of irons going in the fire ATM.
Between WES, FMG and the NSW Government, it is a bit like, here a hub, there a hub, everywhere a hub hub. 🙃


----------



## Sean K (13 November 2021)

sptrawler said:


> 10 years ago when the GFC happened WES were $12, even if you bought them 5 years ago and included the 1 for 1 Coles shares, then add that onto the current WES price it wasn't a bad buy.
> Check out WBC over the same period.



Yeah, I didn't even look at the % gains compaired. It's done well. Probably an easy way to look at long term performance if you're a long term buy and hold person. I was commenting on the reason why WES fell recently though. Looks like it was partly due to a general market correction but it went much harder like BHP and FMG, but they were due to IO prices. What happened on 20 Aug? Dunno


----------



## sptrawler (13 November 2021)

Sean K said:


> Yeah, I didn't even look at the % gains compaired. It's done well. Probably an easy way to look at long term performance if you're a long term buy and hold person. I was commenting on the reason why WES fell recently though. Looks like it was partly due to a general market correction but it went much harder like BHP and FMG, but they were due to IO prices. What happened on 20 Aug? Dunno



From memory, and someone correct me if I'm wrong, but the WES share price dropped to about $38, when the Delta strain caused some Bunnings stores to be closed, which was the first time since the pandemic started.
This was a market over reaction, which turned out to be a golden buying opportunity, in hindsight.


----------



## Dona Ferentes (13 November 2021)

sptrawler said:


> From memory, and someone correct me if I'm wrong, but the WES share price dropped to about $38, when the Delta strain caused some Bunnings stores to be closed, which was the first time since the pandemic started.
> This was a market over reaction, which turned out to be a golden buying opportunity, in hindsight.



$30 in the dark days of April 2020 , but no, a run up from there, and only a retracement from $56 to $49 in Feb this year. Sharp sell-off  ... and the second drop from $67 to $54 late Aug to early Oct


----------



## sptrawler (13 November 2021)

Dona Ferentes said:


> $30 in the dark days of April 2020 , but no, a run up from there, and only a retracement from $56 to $49 in Feb this year. Sharp sell-off  ... and the second drop from $67 to $54 late Aug to early Oct



I must have been thinking of another share, you are spot on @Dona Ferentes, I'm hopeless finding info on a mobile phone. lol


----------



## Garpal Gumnut (20 December 2021)

WES are not finished yet with their t/o bid for API, the pharmacy group being pursued by WOW.

A letter has been sent to Professor Twomey the head of the Pharmacy Guild for distribution to chemists by the professor warning of the capitalist running dog intentions of WOW against the white-coated slow typists. It would appear WOW intend imprisoning all chemists in their fresh food section and make them wear clown suits and Collingwood scarves while medicines are sold cheaper than they are now to punters.

Either way WES are ahead. If their tilt at API succeeds they will be slow typing the sticky notes on bottles of pills in ye old style chemist shops at a profit. 

If they lose they sell their 19.9% stake acquired a few months ago at a premium. 

gg


----------



## johnb1 (30 December 2021)

WES had a slump in the 3rd quarter but up about 14% since early October. Looking good to me.

*Total Shareholder Return (avg annual rate)*

1yr3yr5yr10yr23.0%29.3%20.6%16.8%


----------



## Garpal Gumnut (30 December 2021)

WES have depth in their structure and function. 

A conglomerate who learn from mistakes and are forward looking. They have been good to me. 

A good stock in a crash or recovery. 

A CY22 Competition pick for me. 

gg


----------



## Dona Ferentes (7 January 2022)

_Best team in the country._

API notes that Woolworths Group Limited (ASX:WOW)  has withdrawn its non-binding indicative proposal to acquire 100% of the shares in API announced on 2 December 2021.

As announced to the market on 8 November 2021, the Scheme Implementation Deed with Wesfarmers Limited remains in place and is on track for completion in the first quarter of calendar year 2022.

In terms of the SID, it is proposed that a wholly owned subsidiary of Wesfarmers will acquire 100% of the shares in API that Wesfarmers does not already own, for cash consideration of $1.55 per API share. The cash consideration of $1.55 is to be reduced by the cash component of dividends paid of up to 5 cents per API share, which includes the 2 cents fully franked final dividend for the year ended 31 August 2021 that was paid in December 20


----------



## divs4ever (7 January 2022)

Woolworths Group withdraws its non-binding proposal to acquire API Woolworths Group refers to its previous announcement on 2 December 2021 regarding its non-binding proposal to acquire 100% of the shares in Australian Pharmaceutical Industries Limited (API) at a cash offer price of $1.75 per share.
 Following the completion of a comprehensive due diligence process, Woolworths Group has advised API that it has withdrawn its proposal as it has not been able to validate the financial returns it requires in line with the Group’s capital allocation framework. Woolworths Group CEO, Brad Banducci, said: “We are grateful to the Board and leadership team of API for their constructive engagement and support throughout the due diligence process.” 

 DYOR 

 i hold WOW  ( 'free-carried' ) , WES , API and SIG 

 let's see if SIG comes back with a second offer  , after all they have the obvious synergies 

 PS i am still hoping the take-over ( by anybody ) doesn't succeed  ( and a scrip deal by SIG is my second best outcome , if it were to return )


----------



## Sean K (14 January 2022)

WES didn't like 60 bucks. Dropping into a more interesting area. 5 year weekly log, 1 year daily linear.


----------



## divs4ever (14 January 2022)

well the WES take-over of API isn't a done deal  , and WES is still trying work out what to do with Office-Works

 so while WES still has plenty room  to move  what are you buying for your ( nearly ) $60  

 WES + API , maybe  , WES - Office-Works maybe 

 a P/E of 27  and div. yield of 3.1%  ( plus franking ) isn't that inspiring unless you are thinking WES is a growth stock 

 now my average SP is $37.12 ( the slightly more than half  bought after the COL demerger ) isn't so flash  , but at least i have a toehold  that i can average down should the opportunity arrive


----------



## divs4ever (17 January 2022)

2022 Half-year results update

Wesfarmers today provided an update in relation to the Group’s preliminary profit result for the half-year
ended 31 December 2021, including details on the significant impact of COVID-related disruptions and
costs on the performance of Kmart Group.
The Group also provided an update on recent retail trading conditions. Further details on the 2022 half-year
results and current trading will be provided at Wesfarmers’ results announcement on 17 February 2022.
Wesfarmers preliminary half-year profit result1
Wesfarmers expects to report net profit after tax (NPAT) of between $1,180 and $1,240 million, in line with
current consensus expectations, for the half-year ended 31 December 2021.
The Group’s performance for the half was supported by pleasing results in Bunnings and Wesfarmers
Chemicals, Energy & Fertilisers, while results in Kmart Group and Officeworks were impacted by
COVID-related disruptions and costs.
Kmart Group half-year trading results
Kmart and Target trading performance through the first half of the 2022 financial year was significantly
impacted by COVID-19 restrictions, with almost 25 per cent of store trading days lost due to governmentmandated store closures.
Trading conditions improved as restrictions eased during the second quarter of the 2022 financial year, but
customer traffic to stores was impacted by rising community transmission of COVID-19 in some states,
particularly during the Christmas trading period. Ongoing global supply chain disruptions were well
managed during the period as a result of investments made to hold additional inventory domestically, but
high levels of COVID-related absenteeism in New South Wales and Victorian distribution centres impacted
the ability to deliver stock to stores in line with customer demand.
Combined Kmart and Target sales declined 10.3 per cent for the first half and declined 5.2 per cent on a
two-year basis. In addition to the factors outlined above, the decline in sales also reflected the permanent
closure of 14 Target stores and 48 Target Country stores as part of the planned network changes, largely
executed during the 2021 financial year. The performance of converted stores, when adjusted to exclude
the impact of lockdowns, has been pleasing and in line with the business case. Combined online sales for
Kmart and Target were 44.2 per cent higher than the prior corresponding period.
Gross transaction value (GTV) growth for Catch was 1.0 per cent for the first half with elevated GTV growth
during periods of lockdown offset by a decline in GTV, particularly within the in-stock business, as
restrictions eased. Catch GTV growth on a two-year basis was 97.5 per cent for the half.
1 All preliminary results are subject to review by the Group’s auditor.
2 See page 3 for relevant retail calendars.
3 Total sales growth and two-year total sales growth is calculated as growth between the first half of the 2022 financial
year and the corresponding periods in the 2021 and 2020 financial years respectively.
Half-year ended 31 December 20212 Total sales growth3
(%)
2Y total sales growth3
(%)
Online penetration
(% sales)
Kmart and Target (10.3) (5.2) K: 14.3 | T: 26.9
Catch (gross transaction value) 1.0 97.5 100 
Page 2 of 3
Kmart Group preliminary half-year earnings results
Combined earnings before tax (EBT) for Kmart and Target is expected to be between $215 and
$223 million for the half.
Higher costs during the half reflected commitments made to pay team members when no meaningful work
was available during lockdowns, additional support to team members when required to isolate, rising
international freight costs and costs associated with elevated domestic stock holdings. In addition, the rapid
temporary shift to online channels during lockdowns, combined with reduced team member availability,
also impacted productivity and profitability during the period.
An EBT loss for Catch of between $45 and $43 million is expected for the half, reflecting continued
investment in team, technology, marketing, and capabilities to support long-term growth, as well as higher
levels of inventory clearance compared to the prior corresponding period.
For Kmart Group, EBT is expected to be between $170 and $180 million for the half.
Recent retail trading conditions
As a result of increasing cases of the COVID-19 Omicron variant in some states, retail trading conditions
weakened in the last two weeks of the 2021 calendar year, and customer traffic to stores has remained
subdued during the first half of January.
Team member absenteeism associated with the COVID-19 Omicron variant has placed additional pressure
on distribution centres and stores in some states, necessitating a reduction of trading hours in some stores
and impacting supply chain productivity and stock availability. These issues are expected to persist while
COVID-19 cases and the number of team members requiring to isolate remain elevated.


=============================================================================

DYOR

i hold WES


----------



## Dona Ferentes (29 January 2022)

Wesfarmers chief executive Rob Scott will leave Western Australia within weeks after deciding it is now “virtually impossible” to manage the $60 billion conglomerate while his home state remains cut off from the world.

Mr Scott said it was now impossible to attract talent into WA and out-of-step quarantine requirements were making it too difficult to continue running the company from his Perth office.

It is the start of a great exodus of senior talent out of Western Australia. Wesfarmers chief financial officer Anthony Gianotti and a handful of other senior Wesfarmers executives will also leave the state. Mr Scott will be based in Melbourne, where most of the conglomerate’s retail leaders are based. Mr Scott’s family will remain in Perth....









						WA omicron outbreak: Wesfarmers boss Rob Scott says closed borders make it impossible to run the conglomerate in Perth
					

In a stinging rebuke to Premier Mark McGowan, the Wesfarmers chief executive is leading an exodus of management talent from Western Australia.




					www.afr.com
				




Mr Scott is frustrated. He’s been doing his best to manage the company for two years with various restrictions. Yet, it’s been about eight months since lobbing its takeover offer for Australian Pharmaceutical Industries, and he is still to personally meet the management team. Meanwhile, his colleagues on the eastern seaboard are adjusting to life with COVID-19.



> “_Last year through the lockdowns and low vaccination rates the team was envious of the freedoms we had in WA. Now they are glad they are not in WA_,” he said. "_There is a growing sense of optimism about the future. Unfortunately, in WA we remain in limbo, and we need a plan for how we move forward.”_


----------



## Garpal Gumnut (29 January 2022)

I saw that.

It may not necessarily be good for WES management being amongst the dross of Melbourne although BHP and CSL are headquartered there. 

Being able to do business is fine, but the ethic of WES hopefully will remain in WA, its board and its long term smarts. 

gg


----------



## qldfrog (29 January 2022)

Dona Ferentes said:


> Wesfarmers chief executive Rob Scott will leave Western Australia within weeks after deciding it is now “virtually impossible” to manage the $60 billion conglomerate while his home state remains cut off from the world.
> 
> Mr Scott said it was now impossible to attract talent into WA and out-of-step quarantine requirements were making it too difficult to continue running the company from his Perth office.
> 
> ...



I thought our Paluchet premier was one of the worst,but when comparing to Victoria and WA she is a benign genius.


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## divs4ever (29 January 2022)

qldfrog said:


> I thought our Paluchet premier was one of the worst,but when comparing to Victoria and WA she is a benign genius.



GO WASH YOUR MOUTH OUT  with soap  !!  NOW !!!

 better than the other two is NO achievement .. just less media bother to publish the craziness


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## divs4ever (29 January 2022)

on the UP side  i hold API and hope it DOESN'T get taken-over ( by anyone ) and WES  might slide lower into attractive top-up range

 there is plenty of talent in WA or willing to MOVE to WA if the salary package is adequate


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## Sean K (29 January 2022)

qldfrog said:


> I thought our Paluchet premier was one of the worst,but when comparing to Victoria and WA she is a benign genius.





divs4ever said:


> GO WASH YOUR MOUTH OUT  with soap  !!  NOW !!!
> 
> better than the other two is NO achievement .. just less media bother to publish the craziness




It seems there might be a problem with the Federation that States can act so independently and with national consequences. I think it's a hangover from 1901 mentality. Or, there are Acts within the constitution that would have allowed the Feds to force national compliance, but they did not act. For eg, borders, lock-downs, curfews. I'm sure there are Acts within the constitution where the Feds could have made a national call. Biosecurity, national security, freedom of movement. But, I'm not a constitutional lawyer. One thing's for certain to me, State parochialism runs deeper than footy or rugby. I would prefer that we were Australian's first, but it seems we are still just individuals trying to save our own arses.


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## divs4ever (29 January 2022)

no there seems to be a problem with 

A.  the people making high level decisions 

B. the people who elect ( or appoint )  the people creating problem A. 

 it doesn't seem to matter if the bad decisions are made at local , state or Federal level , bad decisions are being made and enacted on ( and the taxpayer is expected to bail them out , afterwards )

 ONE easy solution  would be cutting the tax-payer funded life-line , and that MIGHT ripple upwards in the chain


----------



## mullokintyre (29 January 2022)

Sean K said:


> It seems there might be a problem with the Federation that States can act so independently and with national consequences. I think it's a hangover from 1901 mentality. Or, there are Acts within the constitution that would have allowed the Feds to force national compliance, but they did not act. For eg, borders, lock-downs, curfews. I'm sure there are Acts within the constitution where the Feds could have made a national call. Biosecurity, national security, freedom of movement. But, I'm not a constitutional lawyer. One thing's for certain to me, State parochialism runs deeper than footy or rugby. I would prefer that we were Australian's first, but it seems we are still just individuals trying to save our own arses.



The basis of the Constitution is such that whenever there is a conflict between legislation at a state level and legislation at a Federal level, Federal Laws are always paramount.
If the Feds were serious, all they had to do was to pass a law that says unless the feds deemed otherwise, state borders are always open. They could also have deemed lockdown, curfews, checkins blah blah illegal as well.
Thre actually could have done something useful and deemed that all Australian businesses and public places had a universal checkin ap.
 As it is now, I have three different APs on my phone for three different states I have been to in the last three months.
But of course the feds had already curtailed so many freedoms, they were in on the party.
Mick


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## qldfrog (29 January 2022)

mullokintyre said:


> The basis of the Constitution is such that whenever there is a conflict between legislation at a state level and legislation at a Federal level, Federal Laws are always paramount.
> If the Feds were serious, all they had to do was to pass a law that says unless the feds deemed otherwise, state borders are always open. They could also have deemed lockdown, curfews, checkins blah blah illegal as well.
> Thre actually could have done something useful and deemed that all Australian businesses and public places had a universal checkin ap.
> As it is now, I have three different APs on my phone for three different states I have been to in the last three months.
> ...



this is why I find no excuse to PM, however non Labour he might be (Liberals here to be honest just part of Reset socialism/cronies)
WES is just a symptom, if we can not act as a country in front of an alleged pandemy, let's dismiss our armies, after all, there is less need of a national army  to fight in afghanistan than there is need of a common health response in front of a virus...or a nuclear incident, etc
But as div4ever mentioned these clowns are elected...and business like WES have to work with them..others businesses with less need for a local base just close, move or relocate O/S, or go bankrupt.


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## divs4ever (29 January 2022)

now maybe WES  should cause change where it can 

 i notice in recent years several companies  no longer make political donations  , now is that a prudent move for WES  ( reducing expenditure is often helpful during inflationary periods )


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## InsvestoBoy (1 February 2022)

WES is a funny one, keeps popping up in my research as basically a perfect beta to Quality and Growth type factors.

Here it is plotted against NDQ (NASDAQ-100 in AUD) and QUAL (MSCI International Quality in AUD) for several years and recently

Certainly trades differently than more cyclical ASX peers.











Potentially a good overweight for those seeking that type of exposure without going overseas.


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## qldfrog (1 February 2022)

InsvestoBoy said:


> WES is a funny one, keeps popping up in my research as basically a perfect beta to Quality and Growth type factors.
> 
> Here it is plotted against NDQ (NASDAQ-100 in AUD) and QUAL (MSCI International Quality in AUD) for several years and recently
> 
> ...



Interesting facts @InsvestoBoy .Thanks for sharing


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## divs4ever (11 February 2022)

11 February 2022 Wesfarmers’ proposed acquisition of API not opposed

The ACCC will not oppose the proposed acquisition of Australian Pharmaceutical Industries (ASX: API) by Wesfarmers (ASX: WES). API is a retailer and wholesaler of pharmaceutical and beauty & personal care products. 
It owns the Priceline retail business and is the franchisor for, and distributes products to, independently owned Priceline Pharmacies. API also owns the Priceline Sister Club customer loyalty scheme. Wesfarmers is a conglomerate with substantial retail holdings. Its Kmart, Target and Catch businesses each sell a range of over-the-counter pharmaceutical and beauty & personal care products. Wesfarmers also owns 50 per cent of the Flybuys customer loyalty scheme.
The ACCC’s review primarily focused on the markets for the retail sale of over-the-counter pharmaceutical and beauty & personal care products. “Our investigation showed that there are many large and well-established retailers, including Chemist Warehouse, Woolworths and Coles, that will compete strongly with Wesfarmers after the acquisition in both the market for over-the-counter pharmaceutical products and the market for beauty & personal care products,” ACCC Commissioner Stephen Ridgeway said. “We consider that API’s competitors will continue to compete strongly with Wesfarmers after the acquisition.”
The ACCC also considered the potential effects on competition of Wesfarmers owning both the Priceline Sister Club and 50 per cent of Flybuys. The investigation focused on whether the proposed acquisition would reduce competition by incentivising and locking customers into shopping at Wesfarmers-aligned pharmacies and providing Wesfarmers with access to increased customer data. “Wesfarmers acquiring the Priceline Sister Club loyalty scheme will not have a lock-in effect on consumers in any market,” Mr Ridgeway said. “We also consider the benefits obtained from the additional customer transaction data do not appear to be so strong as to result in a substantial lessening of competition from the acquisition.” “Customers generally do not only join one loyalty scheme, and major competitors to Wesfarmers after the acquisition will have, or could start, their own customer loyalty schemes.” The ACCC consulted a wide range of stakeholders during the investigation.
 Most did not have any concerns and noted that the relevant markets have a large number of suppliers and retailers. A small number of industry participants raised some competition concerns about the acquisition. After considering these concerns, the ACCC maintained its view that the proposed acquisition would not have the effect or likely effect of substantially lessening competition. The ACCC also notes that Wesfarmers will be required to comply with the same laws and regulations as API regarding pharmacy ownership and location, and will have the same obligations as API under the Franchising Code of Conduct. More information can be found on the ACCC’s website: Wesfarmers Limited - Australian Pharmaceutical Industries Limited Notes to editors: In considering the proposed acquisition, the ACCC applies the legal test set out in section 50 of the Competition and Consumer Act. In general terms, section 50 prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market. Other matters relating to pharmacies are regulated by a range of specialty regulators. 
A list of regulators in the industry can be found on the Pharmacy Board of Australia’s website: Other regulators. Background: Australian Pharmaceutical Industries Limited owns the Priceline retail franchise and the Priceline Sister Club loyalty scheme.
API also wholesales products and services to Priceline franchisees, independent pharmacies and the Soul Pattinson and Pharmacist Advice banner groups. Wesfarmers Limited is a large, publicly traded conglomerate with several retail businesses and an industrials division. Wesfarmers has a 5 per cent equity interest in Coles and shares joint ownership of Flybuys with Coles. Over-the-counter pharmaceutical products include, for example, pain management and cold and flu products, and exclude prescription-only products.
Beauty & personal care products include products such as skin care, cosmetics, fragrances and dietary supplements.
Prior to Wesfarmers’ bid to purchase API, Sigma had submitted an indicative proposal to acquire API but later withdrew the proposal. During the ACCC’s consideration of Wesfarmers’ proposed transaction, Woolworths also submitted and subsequently withdrew an acquisition proposal for API.

 DYOR

 i hold API , WES and WOW  ( and COL )

 by current $value i hold more API than WES ( or WOW , or COL )


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## InsvestoBoy (11 February 2022)

Every time this API thing comes up, I am so confused, for some reason I always thought Priceline was part of the WES stable


----------



## divs4ever (11 February 2022)

InsvestoBoy said:


> Every time this API thing comes up, I am so confused, for some reason I always thought Priceline was part of the WES stable



 ' services TO Priceline ' so you might be correct  but API has long term contracts  and those contracts are counted as API 'assets ' 

 ( well that does seem to be the world we are devolving into  )


----------



## divs4ever (11 February 2022)

divs4ever said:


> ' services TO Priceline ' so you might be correct  but API has long term contracts  and those contracts are counted as API 'assets '
> 
> ( well that does seem to be the world we are devolving into  )



 it also might explain the motivation behind the WES take-over


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## mullokintyre (11 February 2022)

Wife the Pharmacist says two of the regulars she works for are dumping Priceline brand and joining other banner groups.
Main problem has been Priceline dumping stock on them that they have no market for, but are obliged to take under the agreement.
Its only two, but may be symptomatic of a business trying to  make itself look good but pissing of its customers.
Mick


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## sptrawler (17 February 2022)

Will Wes go under $50 barrier? I would like to top up, but this priceline purchase worries me a bit, they will need a complete makeover if they are to take on Chemist Warehouse in W.A. 
I don't know how the pharmacy business is over East, but in W.A Chemist Warehouse kills the competition.


----------



## mullokintyre (17 February 2022)

sptrawler said:


> Will Wes go under $50 barrier? I would like to top up, but this priceline purchase worries me a bit, they will need a complete makeover if they are to take on Chemist Warehouse in W.A.
> I don't know how the pharmacy business is over East, but in W.A Chemist Warehouse kills the competition.



Chemist warehouse is the Amazon of Pharmacy.
Mick


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## divs4ever (17 February 2022)

my target   ( pun intended ) for ( extra ) WES  is $31-$32  but the current drop is a mixed blessing   in should translate into a few extra DRP shares 

there is very little chance of the API take-over cash  making it's way into WES ( $wise the API holding is larger than the WES  holding  )
 add in the new management changes  , i will be watching without much excitement


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## Sean K (17 February 2022)

sptrawler said:


> Will Wes go under $50 barrier? I would like to top up, but this priceline purchase worries me a bit, they will need a complete makeover if they are to take on Chemist Warehouse in W.A.
> I don't know how the pharmacy business is over East, but in W.A Chemist Warehouse kills the competition.




I read somewhere sometime ago that WES had already approached Chemist Warehouse. CH are more likely to IPO.


----------



## Garpal Gumnut (17 February 2022)

Sean K said:


> I read somewhere sometime ago that WES had already approached Chemist Warehouse. CH are more likely to IPO.





sptrawler said:


> Will Wes go under $50 barrier? I would like to top up, but this priceline purchase worries me a bit, they will need a complete makeover if they are to take on Chemist Warehouse in W.A.
> I don't know how the pharmacy business is over East, but in W.A Chemist Warehouse kills the competition.



WES and CH would be a great combo together.

The West is not as much in to blood letting as The East.

gg


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## sptrawler (17 February 2022)

mullokintyre said:


> Chemist warehouse is the Amazon of Pharmacy.
> Mick



Over here in the West, CH is half the price of the others, on the anti inflammatory drugs I buy.


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## Garpal Gumnut (17 February 2022)

A major factor in WES survival during the Covid-19 pandemic on the retail side of the conglomerate has been workforce participation and support.

Bunnings, Kmart and Officeworks have high worker loyalty. 

They have treated their workers well in spite of lost days due to Covid lockdowns.

This bodes for WES going forward in to a full employment era for those who want to work. 

To paraphrase Groucho Marx : 

Outside of the Public Service, Wesfarmers is the workers' best friend.
Inside the Public Service it is too dark to see.

gg


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## peter2 (18 February 2022)

Pleased I didn't buy the break-out just before earnings. 







I'm surprised by the selloff  (haven't read the report) as I thought WES is a robust company for the current eco climate.


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## divs4ever (18 February 2022)

peter2 said:


> Pleased I didn't buy the break-out just before earnings.
> 
> View attachment 137692
> 
> ...



 yes but SOME execs are leaving as well  ,  and some arms ( like Target ) are  a dying asset 

 and IMO $50 ex COL  is still pricey


----------



## sptrawler (23 February 2022)

divs4ever said:


> yes but SOME execs are leaving as well  ,  and some arms ( like Target ) are  a dying asset
> 
> and IMO $50 ex COL  is still pricey



I'm hoping on the stars lining up and a further fall, the fact they are getting into the lithium space is a positive for me, hopefully a favourable entry price will present.


----------



## Dona Ferentes (23 February 2022)

I've thought similar, might top up some day but, seeing it's all the rage these days, a bit of hesitancy hasn't been amiss of late.


----------



## Sean K (23 February 2022)

This looks overdone to me. What's fundamentally changed in the past few months except a general market correction and the attempted drug deal?


----------



## Dona Ferentes (23 February 2022)

of course it went ex dividend 80c ff,  yesterday


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## sptrawler (23 February 2022)

Sean K said:


> This looks overdone to me. What's fundamentally changed in the past few months except a general market correction and the attempted drug deal?
> 
> View attachment 137976





Well I guess if you are going to use that reasoning, you need to have a longer time frame IMO, the last couple of years have been extraordinary. To use them as a guide to the future IMO is a bit of a long bow, Just my opinion.
Is Bunnings going to do better than it did during the lockdown inspired reno revolution, or the stimulus invoked housing building boom? Is Target going to maintain its slide into oblivion? Has KMart peaked?
IMO a lot of growth form here will have to come from the lithium hydroxide plant and the foray into pharmacies, again just my take on it and why I wont be topping up unless it gets to the $40-43 range.


----------



## Sean K (23 February 2022)

Dona Ferentes said:


> of course it went ex dividend 80c ff,  yesterday





sptrawler said:


> Well I guess if you are going to use that reasoning, you need to have a longer time frame IMO, the last couple of years have been extraordinary. To use them as a guide to the future IMO is a bit of a long bow, Just my opinion.
> 
> View attachment 137978




So, more like natural correction taking into consideration of general market and dividends, but long term still very solid.


----------



## sptrawler (23 February 2022)

Sean K said:


> So, more like natural correction taking into consideration of general market and dividends, but long term still very solid.



Absolutely they are solid IMO, I have them outside the SMSF and want to buy some into the SMSF.


----------



## Dona Ferentes (23 February 2022)

sptrawler said:


> Is Bunnings going to do better than it did during the lockdown inspired reno revolution, or the stimulus invoked housing building boom? Is Target going to maintain its slide into oblivion? Has KMart peaked?
> IMO a lot of growth from here will have to come from the lithium hydroxide plant and the foray into pharmacies, again just my take on it....



Bunnings isn't a static beast; still building stores :
_• Expansion of Bunnings’ commercial offer with rollout of Tool Kit Depot and completion of Beaumont Tiles acquisition_

The Covid impact has been dramatic
_• Around 34,000 store trading days, almost 20% of total store days, impacted by trading restrictions or closures  
• COVID-related costs of c.$80m during the period, around half of which related to team member payments 
... on the plus side, WES did $2.5billion in online transactions across their retailers_

And I can't believe it was so long ago. Now in the ramp-up in development of Mt Holland lithium project
Oct 2019: _Wesfarmers is focused on planning for decisions around building a lithium concentrator at the Mt Holland mine near Southern Cross, and the _*hydroxide plant. *
and the Lynas play fell over back then.  Will we expect another action in the _forward facing _minerals sector?

With API (it's not just Priceline). Should see a complete new sector that will use IT and pricing to establish a strong presence (and give CW a run for their money)
• _Proposed acquisition of API, forming the basis of a new _*Health division*

And then there is the ongoing focus on costs and efficiency
•_ Reinforced price leadership on everyday items 
• Strengthened divisional e-commerce capabilities and expanded online ranges 
• Invested in technology and supply chain initiatives_

I notice there will be further refinements in the *data and digital division*
_• *New division *to support the development of the Group’s data and digital ecosystem – Investing in foundations necessary to deliver great value, convenience and experiences to customers across the Group
• Repositioned Club Catch subscription program as OnePass in February 2022:
• Data and digital division reported as part of Corporate and Other for FY22, and then separately from FY23
• Additional detail at 2022 Strategy Briefing Day 

....................................
now with a PE at 24, that is high. WES has got to kick the aspirational goals to keep growth._


----------



## InsvestoBoy (23 February 2022)

IMHO I think about WES less like a business and more like MQG, when I buy it I am buying something like a "private asset ETF". I want some exposure to private/unlisted assets as a % of my equity allocation.


----------



## divs4ever (23 February 2022)

InsvestoBoy said:


> IMHO I think about WES less like a business and more like MQG, when I buy it I am buying something like a "private asset ETF". I want some exposure to private/unlisted assets as a % of my equity allocation.




 MQG ??  , not SOL or GOW  ( some others do similar )   but yes i can see your argument   but more a LIC than ETF  ( imo )


----------



## divs4ever (23 February 2022)

i should also throw in SVW   although i don't know about the China exposure now with SVW   , i think they have reduced that greatly


----------



## Dona Ferentes (4 April 2022)

Wesfarmers' e-commerce unit Catch has had disappointing customer acquisition growth, amid competition from the likes of Kogan.com.

Over the half-year to 31 December, Catch added just 0.1 million customers to take its total to 3 million at the same time as Wesfarmers committed to investing in the business via increased marketing, recruitment, and tech spends.

Catch is set to be integrated into a new group known as _*Wesfarmers OneDigital *_from July 1, moving away from the Kmart and Target retail division, and former News Corp executive Nicole Sheffield will be charged with turning its performance around. Melbourne-based chief executive *Peter Sauerborn* will resign from the business on 30 June.



> _Catch’s earnings before tax loss widened by $29 million to $44 million over the half-year to December 31, and its total transaction value was up just 1 per cent. Total revenue fell 4.3 per cent to $315 million._


----------



## Garpal Gumnut (4 April 2022)

Dona Ferentes said:


> Wesfarmers' e-commerce unit Catch has had disappointing customer acquisition growth, amid competition from the likes of Kogan.com.
> 
> Over the half-year to 31 December, Catch added just 0.1 million customers to take its total to 3 million at the same time as Wesfarmers committed to investing in the business via increased marketing, recruitment, and tech spends.
> 
> Catch is set to be integrated into a new group known as _*Wesfarmers OneDigital *_from July 1, moving away from the Kmart and Target retail division, and former News Corp executive Nicole Sheffield will be charged with turning its performance around. Melbourne-based chief executive *Peter Sauerborn* will resign from the business on 30 June.



I have been worried about Catch for a little while. 

It is not user friendly and the name is a dog .

A new CEO, especially a female should get it moving. 

I do hope I do not get reported for being sexist. 

gg


----------



## mullokintyre (4 April 2022)

Garpal Gumnut said:


> I have been worried about Catch for a little while.
> 
> It is not user friendly and the name is a dog .
> 
> ...



GG, you are doomed.
Never use female and dog in the same message.
Mick


----------



## divs4ever (4 April 2022)

mullokintyre said:


> GG, you are doomed.
> Never use female and dog in the same message.
> Mick




 i  do that ( avoid the word pairing ) and it doesn't matter  they still complain 

the silver lining is i am still single so am currently immune from   a divorce threat 

 BTW i am more interested on what WES is doing with the lithium and fertilizer assets


----------



## Ann (4 April 2022)

divs4ever said:


> BTW i am more interested on what WES is doing with the lithium and fertilizer assets



I would have thought these two would have had a positive influence on the price but it has been very disappointing so far. I had intended to hold this as a long term keeper, I had held it for a while but it began failing too many points, such as a rising support and the 200dMAs, then it kept falling into my stop loss area and looked darn weak, so as much as I wanted to keep it, I recited the old mantra, _don't fall in love with a stock_ and sold. However, this is not the end of the love affair, I am watching for any signs of recovery. Now I hear @Dona Ferentes say there is a woman taking the helm, we may well see some upside, fingers crossed!  I am still seeing weakness in the chart.


----------



## Dona Ferentes (4 April 2022)

Ann said:


> I would have thought these two would have had a positive influence on the price but it has been very disappointing so far.




Haven't heard much from Lithium or fertilisers, that's true. Announcement dependent, and revealed at Quarterly, HY and FY mainly..



> .... so as much as I wanted to keep it, I recited the old mantra, _don't fall in love with a stock_ and sold. However, this is not the end of the love affair, I am watching for any signs of recovery. Now I hear .... there is a woman taking the helm, we may well see some upside, fingers crossed!  I am still seeing weakness in the chart.



Bunnings is 75% of the WES business, and Catch is only a footnote. The hotshot ex-Amazon dude hired from Seattle to run Catch is packing his bags, and the new appointment is moving into what they hope is a bigger reorganised digital presence. But there are limitations, as newly acquired API won't blend in seamlessly. In fact, treading on pharmacists' toes and cannibalising that business model is a no-no. So WES is going to have two parallel digital strategies,  Sounds messy



> _A key strategy to reverse the stagnant customer growth numbers is Catch OnePass membership that gives shoppers free delivery, exclusive deals, and the cheapest prices around in exchange for a monthly subscription fee. That sounds a lot like the Amazon Prime model of [the departing dude's] former employer._


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## divs4ever (4 April 2022)

NAME POSITION NAME DATE APPT.
Mr Michael Alfred Chaney
Non-Executive Director,Non-Executive Chairman03/06/2015
there are several women on the board already  , some with a long history of business directorships  ,


Mr Michael Alfred ChaneyNon-Executive Director,Non-Executive Chairman03/06/2015
Ms Alison Mary Watkins     Non-Executive Director03/09/2021
Ms Vanessa Miscamble Wallace  Non-Executive Director08/07/2010
Ms Jennifer Anne Westacott  Non-Executive Director05/04/2013
Ms Sharon Lee Warburton  Non-Executive Director03/08/2019
Mr Rob Scott  Chief Executive Officer,Managing Director16/02/2017
Mr Rt Hon Simon William (Bill) English  Non-Executive Director02/05/2018
Mr Mike Roche  Non-Executive Director21/02/2019
Mr Alan John Cransberg Non-Executive Director03/10/2021
Mr Anil Sabharwal  Non-Executive Director03/02/2021


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## Dona Ferentes (4 April 2022)

divs4ever said:


> NAME POSITION NAME DATE APPT.




That's the *Board*. We were talking about *management *, of the various divisions


----------



## Dona Ferentes (11 May 2022)

Wesfarmers has produced a rare update last week on its half-owned *lithium *project in WA that it picked up when it took over Kidman Resources in late 2019.

News on the projects Kidman had in its portfolio disappeared after the takeover but it is clear Wesfarmers has fixed the Mount Holland development.

Wesfarmers brought in the big Chilean lithium brine producer SQM to the project as half owner which is still on track for first production in two years’ time, even though there has been cost pressures.


> _Mt Holland remains one of only a small number of vertically-integrated projects where sustainably-sourced, battery-grade lithium hydroxide will be produced from a single origin_, Wesfarmers told the recent Macquarie investment conference.




“_While there has been some cost inflation in development costs, and the Covalent (the project managers) team continue to actively manage and monitor these pressures, Wesfarmers’ expected share of the project capex remains in line with prior guidance of $950 million. And we expect average cash cost over the life of the project in the order of $US5,400 dollars a tonne of lithium hydroxide._

“… _the Mt Holland project provides some valuable commercial options, which we continue to review in the context of their capacity to enhance shareholder returns from this project._

“_These options include the potential to expand the capacity of the mine, concentrator and refinery, the option to sell spodumene ahead of the commissioning of the refinery as well as the option to evaluate adjacent opportunities within the broader industry._

“_The project is supported by strong fundamentals with first production in the *second half of calendar year 2024* and total production capacity of *50 thousand tonnes *of lithium hydroxide per annum_,” Wesfarmers said.


....... moving ahead nicely.


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## divs4ever (11 May 2022)

am guessing various governments will have to subsidize EV to get them to become mainstream

 currently WES is my main exposure to EVs although i do hold a few VMT    and expect APE and PWR ( i bought some PWR today ) to start selling EVs  as demand increases  (  sure i have copper exposure  but copper is pretty useful in many areas , it would probably do fine without EVs )


----------



## Dona Ferentes (11 May 2022)

_you sure make a lot of guesses_, , Mr Divs  

One of the bits I left off the article was along these lines:


> Compared to the publicity for the likes of *Albemarle, IGO, Liontown and Pilbara Minerals* this project has had a low profile because it is buried within the larger Wesfarmers corporate structure....
> But a *2024 *start date would put it in company with a number of other projects on a similar timescale.




The supply response is in train; will the demand be there? Or will there be price destruction? Contract or spot? Boom n bust?


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## divs4ever (11 May 2022)

Dona Ferentes said:


> _you sure make a lot of guesses_, , Mr Divs
> 
> One of the bits I left off the article was along these lines:
> 
> ...



 well i am not a trained expert in anything , and folks should be doing their own research  even if i was a trained expert in a topic 

 however some of my bizarre ideas  turn out correct ( and sometimes for the wrong reasons )

for instance  i bought extra WES after the COL demerger thinking they would expand the fertilizer  business  and work-wear venture  , i suppose i should have taken more notice of the failed LYC bid  , but here we are ,

 cheers


----------



## divs4ever (11 May 2022)

i still think lithium will be superseded  for use in mobile ( vehicle ) applications , that still does not exclude it from gaining acceptance in other applications , where research progress is continuing


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## sptrawler (11 May 2022)

divs4ever said:


> i still think lithium will be superseded  for use in mobile ( vehicle ) applications , that still does not exclude it from gaining acceptance in other applications , where research progress is continuing



Everything will be superseded, the issue is will it be supersede before it reaches peak value, that is the issue with nickel and lithium IMO.
Will solid state batteries develop at as fast a rate as E.V uptake happens?, will LiFe batteries get the energy density of Lion batteries and make nickel obsolete, will li ion batteries improve and still keep a huge advantage over LiFe, will H2 fuel cells make a breakthrough and H2 production drops below $2/kg.
That's the fun with buying specs. 
The banks and the punters keep underwriting them.


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## divs4ever (11 May 2022)

sptrawler said:


> Everything will be superseded, the issue is will it be supersede before it reaches peak value, that is the issue with nickel and lithium IMO.
> Will solid state batteries develop at as fast a rate as E.V uptake happens?, will LiFe batteries get the energy density of Lion batteries and make nickel obsolete, will li ion batteries improve and still keep a huge advantage over LiFe, will H2 fuel cells make a breakthrough and H2 production drops below $2/kg.
> That's the fun with buying specs.
> The banks and the punters keep underwriting them.



 but i am trying to pick long termers 

 stocks like APE , CSR , BHP , and SOL that survive  ( fairly healthy ) for decades


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## sptrawler (11 May 2022)

divs4ever said:


> stocks like APE , CSR , BHP , and SOL that survive  ( fairly healthy ) for decades



Well I don't have any of them and sold MLT, because I was going to inherit SOL, so obviously we work on different parameters.


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## divs4ever (12 May 2022)

sptrawler said:


> Well I don't have any of them and sold MLT, because I was going to inherit SOL, so obviously we work on different parameters.



 and that is not a bad thing either  , a crowded trade often means somebody over-pays 

 and SOL bought in 2011  was better value ( but still not a jaw-dropper ) than SOL in 2021 

 i still think SOL's value was the shareholder newsletter/report  alerting you to other companies they had invested in ( several of which i have bought into over the last decade )


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## Garpal Gumnut (12 May 2022)

I'm off to Bunnings and Kmart this morning. 

I have a lazy big one burning a hole in my CDIA after trading FMG from H2 to O and discovering wine some weeks ago,  which is more than present holders have, so I may be tempted to add to my WES. 

I will discuss p/e, debt to earnings and all that other rubbish with the trolley boys and girls, the tradies and shoppers, and throw tomatoes at any passing politicians. 

gg


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## Dona Ferentes (16 May 2022)

Citi has slashed its Wesfarmers price target from $50 to $42 a share and slapped a sell rating on the business.


> “_We reduce our Wesfarmers earnings forecasts by ~3-4% incorporating a weaker earnings outlook for Bunnings. This reflects a more cautious view on margins normalising back towards pre-COVID levels and slower revenue growth as the housing market coo_ls,” the broker said.




Meanwhile the latest iterations of Bunnings are appearing.  The new stores feature _"some of the latest in-store Bunnings concepts which are currently being rolled out across the store network, to provide customers with more inspiration and an easier shopping experience"_.

These include a Kitchen Design Centre, a newly laid out paint department, bathroom displays, new look trade service area, a wider range of site safety and workwear products in the one location, as well as an aisle for transport and moving needs.

And basically, these are multi-level shops that are being shoe-horned onto smaller footprints. Parking underneath and at least two levels of service hubs and the like. The catalogue looks like it's giving HVN (or even Ikea) a run, in terms of product and how concepts are developed, rather than just individual items....



			https://www.news.com.au/lifestyle/real-life/news-life/inside-new-80-million-bunnings-pymble-store/news-story/7c0f86432df3e43065f0bb1dd440cf90


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## divs4ever (16 May 2022)

i was waiting to see if they would sell more ( in-house ) work-wear in Bunnings 

 seems they are smarter than WOW  cross-selling among brands/outlets


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## mullokintyre (16 May 2022)

Dona Ferentes said:


> Citi has slashed its Wesfarmers price target from $50 to $42 a share and slapped a sell rating on the business.
> 
> 
> Meanwhile the latest iterations of Bunnings are appearing.  The new stores feature _"some of the latest in-store Bunnings concepts which are currently being rolled out across the store network, to provide customers with more inspiration and an easier shopping experience"_.
> ...



As soon as I saw that I immediately put some low ball bids in.
CITI are no better than monkeys at stock recos.
what is more likely is that they have a big hedge fund looking to buy in at prices below current levels, so the first thing you do is drive the price down.


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## divs4ever (16 May 2022)

mullokintyre said:


> As soon as I saw that I immediately put some low ball bids in.
> CITI are no better than monkeys at stock recos.
> what is more likely is that they have a big hedge fund looking to buy in at prices below current levels, so the first thing you do is drive the price down.



somewhere near $30-$31   will get me interested ( to add more ) i already participate in the DRP and have a comfortable amount ( for me )

 good luck  if you buy in at this stage 

 X-factor  is still the fate of Office-Works  ( stay , sell, IPO or slice off a new property trust )

 DYOR


----------



## Garpal Gumnut (16 May 2022)

divs4ever said:


> somewhere near $30-$31   will get me interested ( to add more ) i already participate in the DRP and have a comfortable amount ( for me )
> 
> good luck  if you buy in at this stage
> 
> ...



Something that may happen if the ALP get in is that WES pharmacies may suddenly be relocated in to COL stores. 

The Pharmacy Guild which has maintained a grip on where pharmacies may operate is a Liberal led mob. Their head who is a professor was touted for a Senate spot was the rumour up her for the LNP.

So I'll be buying both on any weakness. 

gg


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## InsvestoBoy (19 May 2022)

Garpal Gumnut said:


> Something that may happen if the ALP get in is that WES pharmacies may suddenly be relocated in to COL stores.
> 
> The Pharmacy Guild which has maintained a grip on where pharmacies may operate is a Liberal led mob. Their head who is a professor was touted for a Senate spot was the rumour up her for the LNP.
> 
> ...




Bit of weakness showing up today, I assume on the back of the carnage in Walmart and Target stock overnight.


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## peter2 (19 May 2022)

All retail has been slammed. So much for it being a defensive sector.


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## divs4ever (19 May 2022)

peter2 said:


> All retail has been slammed. So much for it being a defensive sector.



retail tends to be flexible and adaptable ( or die a sudden death )

 so MAYBE that will save them again  , after some nasty dips ( am thinking  APE in March 2020 when i added more @ $2.64 )

but WES was  considered defensive  while it still included COL  , and not so sure about that now


----------



## divs4ever (19 May 2022)

so when is option expiry date  ( or whatever it is this week )


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## Dona Ferentes (19 May 2022)

peter2 said:


> All retail has been slammed. So much for it being a defensive sector.




Nasdaq benchmark down 5.1 per cent overnight included a tumble for US retailers.

The likes of Walmart and (US) Target have cautioned in the latest quarterly earnings season about the effects on profits from rising costs as inflation bites across the US economy and supply chain kinks gum-up operations.

The US consumer discretionary sector ended the day 6 per cent lower with Target suffering its worst day since 1987 with a 25 per cent tumble after voicing worries about rising prices in its March earnings results.



> _“Target has been the latest big US retailer – covering both consumer staples and discretionaries – to trim its profits forecasts,_” said an analyst.


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## Dona Ferentes (21 May 2022)

With Bunnings a majority contributor to WES, its only fair to ask if the new set of circumstances will have an even greater impact than last week's selldown (nearly 7% on Thursday)?

Comment from elsewhere:

_Surging labour and freight costs are a given_
_Empty shelves during the pandemic may not translate to similar consumption patterns now_
_Inflation is forcing consumers to conserve cash for groceries and essentials, and less discretionary spend_
_Retailers who sell physical products have to guess what customers will buy months in advance_
_The cost of running short is immediate lost revenue and market share. The cost of ending up long is registered in discounts on unpopular lines_
_Retail is a low margin business. It requires careful management of working capital and supply chains. The smallest errors ripple through to profitability and cash flow._
Probably applies across the board; staples have more attraction in the current uncertainty.


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## Garpal Gumnut (21 May 2022)

Dona Ferentes said:


> With Bunnings a majority contributor to WES, its only fair to ask if the new set of circumstances will have an even greater impact than last week's selldown (nearly 7% on Thursday)?
> 
> Comment from elsewhere:
> 
> ...



This is a reasonable concern for holders of WES.

Including yours truly. 

I believe I'll stick with them though. 

gg


----------



## divs4ever (21 May 2022)

Dona Ferentes said:


> With Bunnings a majority contributor to WES, its only fair to ask if the new set of circumstances will have an even greater impact than last week's selldown (nearly 7% on Thursday)?
> 
> Comment from elsewhere:
> 
> ...



 also there are all sorts of disruptions in the building industry ( Bunnings presents itself as a wholesale/retail outlet  so a fair chunk of those customers are building industry professionals ) the home improvement ( and house-flipping )  game can only do so much  when incomes come under  pressure  , a lot of that is because of regulations  limiting what a non-tradesman  can do to a property 

 so YES i expect a greater impact  , but then i think WES is still currently over-priced 

 so the one BIG question i will ask myself  is , what do i think  a 'fair price' is for WES  .. and will i add more at a price within 10% of that price


----------



## divs4ever (21 May 2022)

Garpal Gumnut said:


> This is a reasonable concern for holders of WES.
> 
> Including yours truly.
> 
> ...



 i participate  100% in the WES ( and BWP ) DRP ( with no current plans to sell or reduce  either of them )

 if the WES price continues to drop will i add extra  ( possibly later on  , even WES has a couple of millstones  aka K-Mart and Target  , although Office-Works could either become a gem or an albatross )

 i will probably stick BUT will be watching carefully


----------



## sptrawler (21 May 2022)

divs4ever said:


> i participate  100% in the WES ( and BWP ) DRP ( with no current plans to sell or reduce  either of them )
> 
> if the WES price continues to drop will i add extra  ( possibly later on  , even WES has a couple of millstones  aka K-Mart and Target  , although Office-Works could either become a gem or an albatross )
> 
> i will probably stick BUT will be watching carefully



Yes I'm not sure WES is making the best use of catch, it seems to be lagging behind my deals which WOW has just taken a big bite of, IMO the retail market seems to be evolving into online model I'm not sure WES is keeping pace.

IDH


----------



## divs4ever (21 May 2022)

WES has some experience  outside of retail  , so i would not be totally shocked if WES   chased investments  in water  , an agricultural business  , less likely to go into energy again ( unless they swallow CCE or AVL ) , or maybe into property development ( REIT or  construction companies )

 next report  i will be checking out their war-chest rather early


----------



## Dona Ferentes (2 June 2022)

WES has a 128 page Investor Update available. Pointless to summarise. A few highlights

Neatly and succinctly defining the multiple divisions in the Group.
it anticipates *capex *spending of $900 million to $1 billion in FY 2022, including $320 million for Mt Holland lithium project.
inventory levels in H2 of its fiscal year to remain elevated due to API, inflation and commodity price impacts and ongoing prioritisation of stock availability.
getting to be more and more data and tech focused
Wesfarmers Health is a work in progress (earnings will also be impacted by purchase price allocations, which will be outlined at the full year result)
To me, apart from integration within the hydra headed nature of the organinsation, a key vulnerability is the OneDigital/ Catch pathway. "_To be the trusted place where Australians start their shopping journey" is _ good and probably necessary, but hard to quantify returns


----------



## divs4ever (2 June 2022)

yes a long read  , lots of pictures  , so fails the Marcus Padley test 

 still haven't found the bits i am looking for  ( like the fate of Office-Works  . i am guessing they will keep it  , or at least an interest in it ... but )


----------



## Gunnerguy (7 August 2022)

With the results coming up, and currently a very Low IV Rank, is it worth a Long Straddle on WES ?

Gunnerguy


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## Garpal Gumnut (7 August 2022)

Gunnerguy said:


> With the results coming up, and currently a very Low IV Rank, is it worth a Long Straddle on WES ?
> 
> Gunnerguy



In a word - Yes.

I don't do options and am a longterm holder of WES which has been good to me. 

The main worry for me is a governance one with the move to Melbourne and the dangers of operating in a dodgy corporate environment tainting their founding vision as a farmers co-operative in WA with the oversight inherent in its beginnings. 

WES may boom or fall, so buying a straddle would be a good move imo. 

gg


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## Dona Ferentes (7 August 2022)

Rather foolishly, I sold my COL shares, that came through WES, last FY.

Doing the tax return, I had to work out a CGT cost  base; the numbers are quite interesting

1993. ...Bought 1000 WES @ $7.50. Brokerage $150.00, Stamp Duty $22.50. Net Cost $7,672.50

As well as a steady flow of, and generally increasing, twice-yearly dividends, and the occasional special divi, there have been numerous *Returns of Capital *along the way

12/08/1998. $0.50 a share
18/12/2003. $2.50 a share
18/02/2005.  $1.00 a share
26/11/2013.  $0.50 a share . Consolidated by 0.9876 to 988 shares
16/12/2014. $0.75 a share . Consolidated by 0.9827 to 971 shares
The cost base of a Wesfarmers shareholder’s Wesfarmers Post-CGT shares just before the demerger should be allocated: 71.09% to their Wesfarmers Post-CGT shares; and *28.91% to their corresponding Coles shares*.

_It all means the CG  for the sale of COL holding is quite high (and note the Brokerage back then + Stamp Duty) . Will continue to hold the WES._


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## sptrawler (7 August 2022)

Dona Ferentes said:


> Rather foolishly, I sold my COL shares, that came through WES, last FY.
> 
> Doing the tax return, I had to work out a CGT cost  base; the numbers are quite interesting
> 
> ...



We did the same, but sold COL into the SMSF, it was an interesting exercise, but at least now we have a cost base for WES, after a zillion years of dividend re investment.  
I said to the wife, staple all that together and put a date on it. 😂


----------



## Dona Ferentes (7 August 2022)

sptrawler said:


> We did the same, but sold COL into the SMSF, it was an interesting exercise, but at least now we have a cost base for WES, after a zillion years of dividend re investment.
> I said to the wife, staple all that together and put a date on it. 😂



Too true, @sptrawler ; how  necessary it is to keep records *AND *keep it simple.

Looking back at WES, I had a few DRPs 2001 and 2002 which were transferred to SMSF, then a trade, plus two sets of rights issues (AND note the big diff around the time of the GFC - amazing how the 2nd offer was 60% lower in just 9 months.) ; these last issuances were also transferred to SMSF at an advantageous price ... 

18/06/2004 BUY 150 @ $28.55,
28/02/2006 SOLD 150 @ $36.47,
02/06/2008 RIGHTS 132 @ $29.00.
03/03/2009 RIGHTS 428 @ $13.50.
03/03/2009 Oversubscribe 172 @ $13.50.


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## sptrawler (7 August 2022)

Dona Ferentes said:


> Too true, @sptrawler ; how  necessary it is to keep records *AND *keep it simple.
> 
> Looking back at WES, I had a few DRPs 2001 and 2002 which were transferred to SMSF, then a trade, plus two sets of rights issues (AND note the big diff around the time of the GFC - amazing how the 2nd offer was 60% lower in just 9 months.) ; these last issuances were also transferred to SMSF at an advantageous price ...
> 
> ...



Yes the GFC was the biggest over reaction con job I've ever seen, WES was a magic pickup then, so was CSL $27 and MQG $15. 
Nothing like a crisis, to tighten sphincters and release value. 😂


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## Dona Ferentes (8 August 2022)

sptrawler said:


> Yes the GFC was the biggest over reaction con job I've ever seen, WES was a magic pickup then, so was CSL $27 and MQG $15.
> Nothing like a crisis, to tighten sphincters and release value. 😂




I don't know about _con job_ but it was good to see what fell out when the tree was shaken. _Fresh Fruit for Rotting Vegetables._


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## InsvestoBoy (26 August 2022)

@Boggo any comment on WES lithium business from todays report?


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## Dona Ferentes (26 August 2022)

For FY 2022 its net profit slipped 1.2 per cent to $2.35 billion
Sales up 8.5 per cent to $36.84 billion.
Net debt stood at $4.3 billion.
NPAT growth of 13.1 per cent excluding significant items
Dividend of $1.00 ff; full-year dividends up 1.1 per cent to $1.80 per share,



> “_The Group’s financial results for the year reflect the material impact of COVID-19 on trading conditions during the first half, which included weeks where almost half of the Group’s retail stores were either subject to trading restrictions or closed_,” said Rob Scott the chief executive.




Flagship Bunnings’ revenue was up 5.2 per cent to $17.75 billion over the year with earnings up 0.9 per cent to $2.2 billion.
Kmart Group sales fell by 3.5 per cent to $9.635 billion for 2022 FY. Earnings of $418 million were 39.7 per cent lower. COVID-related disruptions saw almost 25 per cent of store trading lost, in the first half.
Sales at Officeworks were in line with the prior year: revenue increased 4.6 per cent for the year to $3,169 million, while earnings of $181 million were 14.6 per cent lower
Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) posted record earnings reflecting elevated global commodity prices.


The group didn’t provide any specific financial guidance for FY 2023.


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## Boggo (26 August 2022)

InsvestoBoy said:


> @Boggo any comment on WES lithium business from todays report?




Nothing recent. I do remember when they got Mt Holland from Kidman Resources a few years ago but they don't seem to get a mention with the popular producers or those close to producing.
Usual updates on those with potential


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## InsvestoBoy (26 August 2022)

Boggo said:


> Nothing recent. I do remember when they got Mt Holland from Kidman Resources a few years ago but they don't seem to get a mention with the popular producers or those close to producing.
> Usual updates on those with potential




I have a feeling that there is a lot of potential there, vertical integration is a strategy currently only being approached by China. WES is the only non Chinese company I know of working towards it.


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## Dona Ferentes (26 August 2022)

_These things are known_:
Heightened tensions between China and the US over the past few years have prompted the US to encourage its manufacturers to reduce their reliance on China for a range of critical minerals.

This is playing into the hands of Wesfarmers as it proceeds with its $1.7 billion investment in the Mt Holland lithium project, which is a 50 per cent joint venture with Chilean-based lithium producer, Sociedad Quimica y Minera (SQM).

Mt Holland, which is believed to be the largest advanced manufacturing project underway in Australia, will provide the world’s car manufacturers with an alternative to Chinese made lithium hydroxide (China refines 60 per cent of the world’s lithium ore).

Wesfarmers spent $304 million of its promised $950 million capital investment in the Mt Holland project in 2022 and CEO Rob Scott says it will be producing lithium hydroxide by the end of 2024. The project includes a lithium mine, a concentrator and a refinery at Kwinana.

He says the chemical processing plant will take six to 12 months to reach its production capacity of 50,000 tonnes a year. At current prices, that output would be worth $US3.75 billion in revenue.

But most analysts believe the lithium hydroxide price will fall from its current level of $US70,000 a tonne to a much lower level by 2024. Macquarie forecasts the price will be $US33,750 a tonne in 2024 and Barrenjoey says it will be $US31,000 a tonne.
..............
_And this comment is new_:

Scott says Wesfarmers is seeing strong interest in its proposed supply of lithium hydroxide from customers trying to cut their reliance on Chinese supply.



> “_Most of the customers we are speaking to are ex-China_,” he says. “_A lot of the European, American and North Asian car manufacturers and battery manufacturers have a strong preference for sourcing lithium hydroxide outside of China._





> “_So that that’s helpful. The other point to mention is that lithium hydroxide is more of a speciality chemical than a commodity, and having a partner like SQM, that is one of the world leaders in lithium hydroxide production, also gives customers a lot of trust in the product that we will ultimately supply_."


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## Dona Ferentes (26 August 2022)

_and more_
Mt Holland lithium project is progressing well, chief executive Rob Scott said during the briefing. 

Development of the project’s village and aerodrome are complete 
Construction of the concentrator and refinery is advancing.

Wesfarmers’ lithium team has also progressed discussions with key customers, that “_continue to be supported by very strong market fundamentals_”, Scott said.

The company’s net capex was largely driven by $304 million of project capex and $34 million of capitalised interest in relation to the Mt Holland lithium project, chief financial officer Anthony Gianotti said


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## sptrawler (26 August 2022)

Softly, softly, catchee monkey. SHHHHH.🤫




__





						Media Statements - Covalent Lithium to build new facility in Kwinana
					






					www.mediastatements.wa.gov.au


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## Dona Ferentes (23 September 2022)

The first in-depth interview by Emily Amos, some 5 months into the appointment as head of the new *Health and Wellbeing *division at WES.


> “I feel like both my health and my retail background has set me up well because I think you have to be able to set up a vision, but you really do need to learn how businesses operate to understand how work flows through the organisation so that you can actually deliver on the transformation agenda,” she tells _The Australian Financial Review._




_Amos is looking to *prioritise digital and data investment*. This may include developing new and innovative products and services within the business including digital health initiatives. Other targets could include rivals such as Sigma Healthcare, and eventually private hospitals and beauty businesses.

API’s Sister Club, which boasts over 7.5 million members and is the fourth-largest loyalty program in Australia in terms of market penetration, represents the biggest opportunity. Amos plans to use this data to jumpstart sales, help expand ranges, and improve pricing and promotions.

Over the past financial year, Priceline was supported by strong sales in all major health categories due to the large numbers of cold, flu and COVID-19 cases that came with people returning to more normal patterns of working, travelling and socialising as lockdowns ended.

This was partially offset by weakness in beauty, as people cocooned at home amid the pandemic. Amos says beauty is pivotal to Priceline – which plays in the affordably priced market where many teenagers experiment with make-up._

.... Priceline is being savaged by Chemist Warehouse. Although there's money in cosmetics for everyone. A friend's daughter went to have a bit of 'work', spending her saved $200, nip here, hold a line there, and was asked if she was grinding her teeth at night? $800 later. Ah, botox. Ah vanity. Ah, fries with that.


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## Dona Ferentes (27 October 2022)

AGM today

Some customers are becoming more price sensitive as they try to manage squeezed household budgets and rising energy costs.


> _Australian consumer demand continued to be supported by low unemployment and high levels of accumulated household savings, but rising interest rates and the impact of inflation were starting to affect consumer behaviour._




Wesfarmers was well-placed to meet shoppers’ needs as they looked for value, and the combined sales growth for Kmart and Target in the year-to-date was strong, even when adjusting for the impact of lockdowns a year ago.
Bunnings sales in recent months had been hurt by the wet weather, but overall sales growth for the year-to-date remained resilient and supported by strong demand from commercial customers. DIY sales growth was positive, but moderated from the high levels experienced through COVID
Officeworks’ sales for the year-to-date remain broadly in line with the prior year,
Industrial and safety division has continued to improve, with sales growth recorded across all business units through the year-to-date.
Sales at Catch marketplace have declined so far this year following a surge in pandemic-led spending a year ago.
CEO Rob Scott called the 2023 year “foundational” for the OneDigital division as the vertical invests in systems and capabilities to support its data and digital ambitions. Wesfarmers expects OneDigital to post an operating loss of $100 million for the financial year, excluding Catch.
Chemicals, energy and fertilisers division had continued to benefit from strong customer demand and elevated commodity prices
Development of the Mount Holland lithium project was progressing well. In about two years, Wesfarmers will be selling lithium hydroxide, refined at Kwinana in Western Australia, to support the accelerating global uptake of electric vehicles.



> “_Each year, the production from our lithium hydroxide project, on a 100 per cent basis, will be equivalent to powering 1 million battery electric vehicles, resulting in annual savings of around 1.8 million tonnes of emissions_,” Mr Scott said.


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## Garpal Gumnut (27 October 2022)

Dona Ferentes said:


> AGM today
> 
> Some customers are becoming more price sensitive as they try to manage squeezed household budgets and rising energy costs.
> 
> ...



WES really needs to change the name of their online outfit. 

Catch.

It is bloody awful and some nitwit probably got $100,000 for thinking it up. 

gg


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## Telamelo (28 October 2022)

Garpal Gumnut said:


> WES really needs to change the name of their online outfit.
> 
> Catch.
> 
> ...



Yeah true - when I mentioned Catch to someone they replied "What's the Catch" lol haha as thought it was a fishing 🎣 related website or the like


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## divs4ever (28 October 2022)

Garpal Gumnut said:


> WES really needs to change the name of their online outfit.
> 
> Catch.
> 
> ...



 not more more spent on advertising  ....

got to keep the name short , less and less folks can spell or read 

 maybe just a big animated hook ( 'cos Wesfarmers got caught )

 i hold WES 

 i note no particular  news on the fate of Office-Works  , i hope they don't try off-load it mid-depression


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## Garpal Gumnut (2 January 2023)

I've backed WES in the 2023 comp. 

A solid company.

It should be $100 by years end as long as the move of it's corporate HQ to Melbourne does not contaminate the work ethic of those at the top.

gg


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