# WOW - Woolworths Group



## Ko Ko (28 May 2006)

Hey all,
I have been following woolworths for a while now and keen on investing in this company some time soon. I am looking at its general purpose financial statements and a bit concerned about its current ratio and its debt to equity ratio. I understand that woolworths has a high inventory turnover so that might explain why the current ratio is so low. Another warning sign for me is that the new ceo. The previous ceo made huge growth over the years and I have doubt on the ability of the ceo to take off and continue to make the company grow. Can any other people in the market shed some light. Im quiet keen on investing but have my doubts. I just need some more opinions.
Thanks


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## Realist (5 June 2006)

There's no question that WOW is a fantastic company.

It has room to expand in NZ, hardly any in Aus though as it owns most of the grocery and liquor market already.

The problem is it is too expensive at the moment.

A good company is only worth buying if you do not pay too much for it.

Be patient, wait and wait until the price drops.  Which may take years.

 I overvalue it. And would not buy it. Even though it is definately a fantastic company.


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## Julia (5 June 2006)

If they eventually get their way with having instore pharmacies that will provide the next big expansion and growth.  So far too much resistance from the powerful pharmacy lobby but one day they will cave in and Woolworths will be ready and waiting.

I bought it several years ago and will not be selling it unless something changes substantially.  I think it's a basic defensive long term stock.

Julia


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## The Barbarian Investor (11 February 2007)

Whats going on with WOW, they seem to have kicked into gear of late


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## Halba (11 February 2007)

?? up 20% in a couple of months??


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## Garpal Gumnut (11 February 2007)

Halba said:
			
		

> ?? up 20% in a couple of months??




Possibly, a well run company, expanding, profits good, always busy, pleasant staff. Overall market reaching full value though. I may buy 50% of what I'd planned to invest now and wait a month or two to see what happens and then put the other 50% in.
Garpal


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## mmmmining (12 February 2007)

Garpal Gumnut said:
			
		

> I may buy 50% of what I'd planned to invest now and wait a month or two to see what happens and then put the other 50% in.
> Garpal



It is only one of very few companies that return over or close to 20% annually on 10 years, 5 years, 3 years, 2 years  and 1 year basis. Any time is a good time to put money in this stock. I think your strategy is good as I expect a possible pull back soon. Also I have a little concern that the growth space in ANZ is limited. WOW needs overseas acquisition. (or buy out BHP, just joking)


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## pacer (12 February 2007)

I went long CFD's on wow and anz for the last 3 weeks....bailed thursday for a tidy profit....cba might be due for a run soon 
looking for another march correction in the markets....
enjoy!


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## ducati916 (12 February 2007)

*Re: Woolworths*



			
				Ko Ko said:
			
		

> Hey all,
> I have been following woolworths for a while now and keen on investing in this company some time soon. I am looking at its general purpose financial statements and a bit concerned about its current ratio and its debt to equity ratio. I understand that woolworths has a high inventory turnover so that might explain why the current ratio is so low. Another warning sign for me is that the new ceo. The previous ceo made huge growth over the years and I have doubt on the ability of the ceo to take off and continue to make the company grow. Can any other people in the market shed some light. Im quiet keen on investing but have my doubts. I just need some more opinions.
> Thanks




*Ko Ko*

I would endorse your concerns, both in regard to the new management, and the liquidity issues. The two are actually linked, and could well get worse.

I personally wouldn't touch WOW at these prices, but more importantly, the actual fundamentals of the company have *seemingly* been revised.

jog on
d998


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## Sean K (28 February 2007)

Is this the only green stock on the ASX?


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## marc1 (28 February 2007)

kennas said:
			
		

> Is this the only green stock on the ASX?




Its the only green on my screen , i thought this would have sold off today,

on the back of the huge run its had.

PE around 27 now, just keeps defying gravity.

amazing stock this one.


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## telstrareg (26 April 2007)

*WOW - Any comments on the technicals?*

Volume is dropping and the ranges are narrowing. Any thoughts?


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## AnalysisParalysis (26 April 2007)

Here's one possible view. Looks risky.


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## Gundini (27 April 2007)

Coping a bit of a battering of late, and today on sale this one. 

Think there is a bit of support around this $28.30 level off the March high.

Represents a fair entry point for mine.

MACD's are ordinary though, the Daily and Weekly are poised to put pressure on the SP.

The fact the interest rates are predicted to remain steady for the moment has probably capped WOW's momentum for now, but too good a stock to fall out of bed I would think.

Willing to take the risk, but will be watching closely.


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## ShiroKage (28 April 2007)

possibly the reason theyre doing so well is due to the fact they dont pay their employees well enough, and keep us back 5-8 minutes without pay everynight


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## telstrareg (28 April 2007)

ShiroKage said:


> possibly the reason theyre doing so well is due to the fact they dont pay their employees well enough, and keep us back 5-8 minutes without pay everynight




Old Russian saying:

As long as the bosses keep pretending to pay us, we'll keep pretending to work.


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## Gundini (30 April 2007)

ShiroKage said:


> possibly the reason theyre doing so well is due to the fact they dont pay their employees well enough, and keep us back 5-8 minutes without pay everynight




Sorry to hear that ShiroKage, doesn't surprise me though.

There are alot of things I don't like about WOW, but the fact is they pretty well have a monopoly on food, shelter, and clothing... the basic nessecities of human existance. Ok, maybe a bit of a stretch, but Big W does well, along with food, grog, fuel, and their Real Estate holdings. 

One of the few companies who actually benifit from an interest rate rise.


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## reece55 (24 May 2007)

Woolworths is looking very toppy.... attached is my chart view.....

I see a full wave count, heavy MACD divergence, and a break of the day 50EMA which has proved to be dynamic resistance in the past.

Any longs here IMO should very quick, dark clouds are over this one.....

Cheers
Reece


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## ta2693 (24 May 2007)

One of my friends who is a branch manager of WOW in Sydney. he told me the turnover of WOW in recent monthly goes down a lot. of course, it is of part of WOW picture, but should be taken into consideration.


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## Kauri (13 June 2007)

Looks to me that WOW *may* just be finding a bottom.. will need a bit of confirming action yet but it goes from my watch portfolio to my possibles one.. then *if *it shows signs of changing trend it's into the probables..


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## Kauri (16 June 2007)

Has graduated from my possibles to my probables portfolio... volume hasn't been outstanding but has been quite solid and mostly positive...


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## Kauri (20 June 2007)

Has now gone to my set-ups watch-list... a good burst of positive volume in the right place would be nice though...


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## chops_a_must (4 July 2007)

Way to be a good corporate citizen again, tards - Woolies closes down another cultural icon:

_"Hi All

Please be advised, that as of Monday 30th July 2007, there will no longer be any amplified entertainment at the Hyde Park Hotel.

Please find below statement outlining the reasons for this decision.



Monday, 2 July 2007

It is with great sadness that I inform you that the Hyde Park Hotel has been forced to effectively cease all amplified musical entertainment at the venue as of the end of Sunday 29th July 2007.

Recently, the venue has been made aware that a number of local resident complaints had been raised as to the noise levels, specifically with live entertainment, emanating from both the front and lounge bars.

The venue has spent considerable time investigating the situation, employing the services of a sound acoustics specialist to evaluate the sound levels, and have looked into means and methods to overcome the issue.

Subsequently the venue has been left with no choice but to cancel all amplified music for the immediate future, as of Monday 30th July 2007.

This is a major blow to the venue as well as the Perth music scene, and is sadly unavoidable given the current noise restriction rulings and local resident complaints on file.

The staff and management at The Hyde Park are most disappointed that these actions are required, and hope that everyone involved will be patient and understanding during this period of change."_

What a bunch of rubbish though. It's not like Perth Oval is quieter when the Glory play there... literally next door. Management also chose not to apply for the grant for sound deadening.

And at the end of the day, WOW close down another perth pub. Bite my ass.


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## Sprinter79 (4 July 2007)

Bring on the drums, they aren't amplified are they? :
How bout sending it off with a drum spectacular? That'd really piss them off hahaha


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## Sprinter79 (4 July 2007)

Does anyone have a list of the top twenty shareholders in WOW? Etrade won't let me bring it up


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## Taurisk (4 July 2007)

Sprinter79 said:


> Does anyone have a list of the top twenty shareholders in WOW? Etrade won't let me bring it up




Hi Sprinter

I checked on Protrader (Comsec) and there is a list from the 2006 annual report, although it still says at the top: No substantial shareholders! - I wonder if they've all sold out!



Top 20 shareholders as at 19/09/2006	(Source: 2006 Annual Report.)

Name of Shareholder	              Share Holding	% Shares Held

JP Morgan Nominees Australia Limited	161,188,530	13.61
National Nominees Limited	             126,255,480         10.66
Westpac Custodian Nominees Limited	112,208,364	9.47
Citicorp Nominees Pty Limited	31,690,577	2.68
Queensland Investment Corporation	29,127,216	2.46
ANZ Nominees Limited 
(cash income account)	             17,841,662	1.51
Cogent Nominees Pty Limited	15,694,439	1.32
ANZ Nominees Limited (income reinvest plan) 13,209,015	1.11
AMP Life Limited	                          11,837,709	1.00
HSBC Custody Nominees (Australia) Limited 11,697,463	0.99
Woolworths Custodian Pty Ltd	9,649,968	0.81
Australian Foundation Investment Co	6,203,729	0.52
Perpetual Trustee Company Limited	4,759,761	0.40
Australian Nominees Pty Limited	4,434,714	0.37
IAG Nominees Pty Limited	             3,568,988	0.30
Argo Investments Limited	             3,141,723	0.27
Total	                                    562,509,338	47.48


Cheers

Taurisk


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## Julia (4 July 2007)

Imo WOW is a basic stock in any defensive portfolio.  I don't think it's a stock to look at via  a short term chart.  It's one for the long term.  It has experienced some volatility recently possibly because of the uncertainty about what is happening with Coles, but it's basically a great business where management is always looking ahead.  Complete contrast to Coles.


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## Sprinter79 (5 July 2007)

Don't worry, I have ABSOLUTELY no intention of investing in this company whatsoever. See previous posts to see why 

Thanks for the list by the way  Just using it for 'private research'


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## vishalt (26 August 2007)

big, big day for Woolworths on Monday. 

Dad has accumulated an immense amount of stock in it and I think its poised to give a smashing report with a great profit guidance as its trolled over the time burned by Coles & Wesfarmers to merge. 

I think its acting similarly to the May 2006 period where it consolidated for months and then smashed past all expectations after the report, I think Woolworths has enough room to break past $30, even if its 'overvalued' its still the only Australian grocer earning consistently high profits. 

However when Wesfarmers eats Coles and makes the business right I think Woolies will be in danger, but that'll take years.


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## Sean K (26 August 2007)

vishalt said:


> big, big day for Woolworths on Monday.
> 
> Dad has accumulated an immense amount of stock in it and I think its poised to give a smashing report with a great profit guidance as its trolled over the time burned by Coles & Wesfarmers to merge.
> 
> ...



$30 isn't much of a ramp vis?  It's just 7% ish away. I reckon this will go to $50 one day, easy! LOL Maybe in 5 years though....... 

Looks like it might break 28 shortly, a very solid base at 26 - tested it numerous times during the correction to bounce off really positively. Breaking 29 will be very good darts.

Surely a safe haven in these uncertain times. 

I'm not holding at the moment but have on and off over the years. Might be time to revisit for me. Cheers.


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## Sean K (1 September 2007)

kennas said:


> Breaking 29 will be very good darts.
> 
> Surely a safe haven in these uncertain times.
> 
> I'm not holding at the moment but have on and off over the years. Might be time to revisit for me. Cheers.



Looks good for a little run after breaking out of medium term sideways action? Looks to be positively benefiting from the whole Coles debarcle.


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## reece55 (1 September 2007)

kennas said:


> Looks good for a little run after breaking out of medium term sideways action? Looks to be positively benefiting from the whole Coles debarcle.




Geez Kennas, completely missed what was going on with WOW of late - what a run, it must be one of the only stocks at an all time high in the ASX 200...

I thought this baby was expensive at $28.00, but it just powering on..... definitely benefiting from uncertainty at the moment, it's definitely a defensive play....

The problem I see is that unless something out of the ordinary happens, it will be very difficult for them to meet expectations relative to their valuation - still, I am sure current shareholders aren't complaining!!

Cheers


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## Sean K (3 October 2007)

Now breaking out through 30 after consolidation after the last break. What a great mum and dad stock this has been. I have to wait for mine to keel over to inherit some at this stage....


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## silence (20 November 2007)

Hi

WOW seems to be sitting right on support at the moment. I can't post a chart but the current short term support is marginally under 32.00.

The market is getting quite a pounding today but this isn't looking quite as bad as some others.


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## blinkau (3 December 2007)

Does anyone have any advice on WOW?

All research I read keeps saying they are fully valued an marks them as a 'hold' but they keep seeming to keep the hold status on them as they rise. I want to buy a decent amount of them (planned to at $29 but only purchase 10% of what I wanted as I kept hearing they where fully valued) 

Any comments I am wondering if I should just accept the price and buy in


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## vishalt (3 December 2007)

blinkau said:


> All research I read keeps saying they are fully valued an marks them as a 'hold' but they keep seeming to keep the hold status



And that is what you will always hear. 

You know what they said about BHP when it fell to $23.60? Sell. What happened? It surged to $48. 

You know what they said about CSL at $65? Hold/sell, what happened? $107. 

You know what they said about Woodside at $35? Neutral/hold, what happened? $55. 

You know what they said about Bendigo Mining at around $2.50? Buy. What happened? 50c today. 

I also can't fathom telling you about how long analysts have said the Australian market is overvalued - since 4000 points. 

And how about the banks being a sell for years? Except for ANZ, which is by far the worst performer of the big 5 - are a sell. Commonwealth Bank and NAB have been sells since they were $40 and $26 respectively.

I could go on forever about how ****ing retarded analysts are. They will always tell you the opposite of which direction the wind is blowing.


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## blinkau (3 December 2007)

Thanks Vishalt nothing can be more annoying sometimes when there is a 'hold' rating which just follows a stock upwards. I think ill take a potion in wow and over 10 years hopefully it turns out well. WOW seems like a great company but the westfamers acquisition of coles makes me wonder if it will have a material impact on wow in the future. I guess there is only one way to find out 

People always have to eat so I can't seem them going broke anytime soon


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## Julia (3 December 2007)

vishalt said:


> And that is what you will always hear.
> 
> You know what they said about BHP when it fell to $23.60? Sell. What happened? It surged to $48.
> 
> ...



Absolutely right.  
The point is that most of the analysts are attached to the big broking houses.
It's entirely in their interests to persuade investors to turn their stocks over.
Most of them earn a commission based on turnover in addition to their salary.

Re the concern that Woolworths might in future be less successful under the ownership of Wesfarmers.  Possibly.  But I doubt it.  Woolworths has always come up with new ways of increasing profit.  Anyway, any rewards from Coles  as a result of the changed ownership will be a few years away.  Even Richard Goyder has conceded that it will be a hard road to success.


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## vishalt (4 December 2007)

Exactly blinkau, shares always rise in the very long term. But seeing as how Woolworths is right at all-time highs, personally I'd buy a small amount and accumulate more and more as it falls. 

And I think you also have to realise how Woolworths is having the benefits of being a monopoly, and I believe that down the track gains will be less buoyant when Wesfarmers turns Coles around and maybe some big international chains open, but everyone needs to eat and Woolworths will still make money. 



Julia said:


> Absolutely right.
> The point is that most of the analysts are attached to the big broking houses.
> It's entirely in their interests to persuade investors to turn their stocks over.
> Most of them earn a commission based on turnover in addition to their salary.
> ...



Absoloutely. I've found journalists like Pascoe and Kohler better stock pickers than analysts.


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## 2020hindsight (29 December 2007)

just for the record 
here's WOW for the last 2 years (High Low Close) + averages 
Also WOW 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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## oldblue (30 December 2007)

What a lovely graph, 20/20! It really makes the point about the strength of WOW's business.

Keep em coming!


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## Gundini (22 January 2008)

I would think WOW is getting near some sort of entry level for those on the sideline. Heading into a Global slowdown should suit this staple.

Excellent support @ $26 and probably worth a nibble around the $28 mark.

Even in the down times, people gotta eat, and generally hit the bottle for some relief. WOW has both angles covered.


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## nikkothescorpio (22 January 2008)

You really think they're a great buy with a whopping PE STILL of around 24 or so?

I mean for a diversified retailer thats just way too high still - compare them to Walmart and Tesco - way too high IMO.


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## Sean K (22 January 2008)

nikkothescorpio said:


> You really think they're a great buy with a whopping PE STILL of around 24 or so?
> 
> I mean for a diversified retailer thats just way too high still - compare them to Walmart and Tesco - way too high IMO.



If there is a stock to consider in this period it would be WOW, IMO.

pe is there for a reason, and that is because of all the business they're destined to get off the other staples, that fail to staple....

Long term holders/buying of this stock may be rewarded. 

Having said that, gutsy to buy today.

(not holding)


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## Gundini (22 January 2008)

nikkothescorpio said:


> You really think they're a great buy with a whopping PE STILL of around 24 or so?
> 
> I mean for a diversified retailer thats just way too high still - compare them to Walmart and Tesco - way too high IMO.




Correct me if I'm wrong, but isn't the basic way to justify a stocks price, multiple the current earnings per share, by the PE/100

On current earnings, this method values WOW at $27.75

On future earning, 2008, the value for WOW is $33.56

On future earning, 2009, the value for WOW is $38.17

Add in a general slowdown, the fact it is heavily discounted, and it's double digit growth over a 10 year period, whilst approaching key support areas, 

represent an excellent opportunity to pick up a quality stock at fair to discounted prices.

That's how I see it anyway.


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## ROE (22 January 2008)

Gundini said:


> Correct me if I'm wrong, but isn't the basic way to justify a stocks price, multiple the current earnings per share, by the PE/100
> 
> On current earnings, this method values WOW at $27.75
> 
> ...




you are assuming everything goes according to plan and execute to perfection and no discount has been factor in the price.

I don't like anything that price to perfection  .... WOW is a great company no doubt and I'm great fan of wonderful company but not at any price 
at this current price no thanks .. maybe at low 20's


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## Birdster (12 February 2008)

Has anyone got any idea and/ or opinion why Woolworths has dropped below $27 today? I can't seem to find any news causing a drop. Maybe it's having it's own little correction?


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## lucifuge (12 February 2008)

Birdster said:


> Has anyone got any idea and/ or opinion why Woolworths has dropped below $27 today? I can't seem to find any news causing a drop. Maybe it's having it's own little correction?





I found this article on the Sydney Morning Herald, it might explain why. It seems to suggest people avoid the stock as it is overvalued:

http://www.moneymanager.com.au/articles/2008/02/04/1202090321981.html


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## Buffettology (12 February 2008)

lucifuge said:


> I found this article on the Sydney Morning Herald, it might explain why. It seems to suggest people avoid the stock as it is overvalued:
> 
> http://www.moneymanager.com.au/articles/2008/02/04/1202090321981.html




Didnt read the article, but I beleive it is correct.  I have no idea how it got as high as it did in the first place!


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## chilliaa (12 February 2008)

ROE said:


> you are assuming everything goes according to plan and execute to perfection and no discount has been factor in the price.
> 
> I don't like anything that price to perfection  .... WOW is a great company no doubt and I'm great fan of wonderful company but not at any price
> at this current price no thanks .. maybe at low 20's




Spot on.  The first part of investment is finding the right type of stock to place in a long term portfolio.  The second is to buy it at the 'right' price. The first part is pretty easy, the second dam difficult


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## DionM (13 February 2008)

I've been watching and waiting.

Around $26 will be my entry point.  P/E still a little high I agree, but it's a good long termer I think (5-10 yrs).  Suits my portfolio.


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## vishalt (13 February 2008)

It's overvalued? You know Woolworths is not the only stock that the market is avoiding, there are plenty more that have fallen more so if anything Woolworths is the only stock that people AVOID SELLING TOO MUCH OF!

Outstanding company for a long-term portfolio, I'm looking to buy at $22 as well for 10+ years.


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## Buster (13 February 2008)

Well,

Wow.. WOW ))was ticking along quite nicely today.. Then went through the floor during after market!!!

What was that all about??  Any ideas??

Regards,

Buster


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## Birdster (13 February 2008)

I have had this on my watchlist for quite some time. It's almost at the same price it was a year ago. Ever since December, when it went up beyond AXO, it has been targeted for a fall. Better to watch this stock than anything else, IMHO. No doubt it will recover being a "staple" blue chip. Just can't smell the bargin yet.


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## AnDy62 (2 March 2008)

I'm waiting on WOW. 
Long term it's a good buy. Over summer, between uni, I actually had the honour of working on checkouts at woolies. People always complained about the prices but it didn't stop them coming back for more . Also, many investors are looking for new blue chip buys to replace the banking sector- companies such as TLS, WOW etc appear to be viewed in good light. Furthermore, the high $A is good for the electronics component of Woolworths Ltd - Tandy, Dick Smith Electronics etc. So, I'm waiting for this market turmoil to send the price hopefully to $23/24 then I'm in for the long haul


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## nitpra (2 March 2008)

Well said AnDy62. This is one of the stocks that got the pricing power in this market condition.  This with others like RIO and TLS must be good pick for the season.


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## overule (2 March 2008)

If you are talking about long term buy, then banks share are not bad as well. Probably, your best bet.


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## osmosis (2 March 2008)

The problem I find with banks at the moment is picking fair value. It seems like the credit crunch issues are still to play out -- have a look at the "Banks-turning the corner" thread.

Is CBA cheap at $43 or $36?
Is ANZ cheap at the moment or will it fall below $20?

Any thoughts.


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## vishalt (2 March 2008)

Well historically at a P/E of 10 the banks are pretty cheap, but other banks around the world are at a P/E of 6. 

But no-one can pick a bottom but I would much rather buy a small amount of ANZ at $22 than $31. If it falls more I'd just buy more because these will eventually recover.


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## MRC & Co (2 March 2008)

osmosis said:


> The problem I find with banks at the moment is picking fair value. It seems like the credit crunch issues are still to play out -- have a look at the "Banks-turning the corner" thread.
> 
> Is CBA cheap at $43 or $36?
> Is ANZ cheap at the moment or will it fall below $20?
> ...




Havent read that thread, but I agree.

It is very hard to value the banks at the moment, because their future growth forecasts and even current status are a guessing game!  

No way you can value anything in that kind of environment, unless of course you simply use long-run historical values.  

For now, I will let the banks ride it out, I have learnt the hard way to use one of the very basics of T/A, never buy anything on a downtrend, even if it is fundamentally good value.  Wait until it actually does turn the corner, then start wacking your money in if your sure its fundamentally sound.

On the WOW front, I wouldnt buy it for anything above $24.  But thats just my opinion.


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## dongda (17 June 2008)

*WOW - Woolworths Ltd*

Anybody knows what's going with this blue chip?
It keeps sinking and sinking... while everything goes up


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## SGB (17 June 2008)

*Re: WOW - Woolworths Ltd*



dongda said:


> Anybody knows what's going with this blue chip?
> It keeps sinking and sinking... while everything goes up




Hi donga,

On the technical side it broke down on major support areas. Thats why you would have seen a sudden drawdown today.

Needs to get back over 26.00 very quickly, if there is going to be some sort of near term recovery IMO.

SGB


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## Kelpie (17 June 2008)

*Re: WOW - Woolworths Ltd*



SGB said:


> Hi donga,
> 
> On the technical side it broke down on major support areas. Thats why you would have seen a sudden drawdown today.
> 
> ...





Hopefully she will get up quickly and still hold support on the weekly chart. It's below the lower Bollinger, something which it doesn't often do - so probably realise she shouldn't be there and move up........


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## MRC & Co (17 June 2008)

*Re: WOW - Woolworths Ltd*



SGB said:


> Hi donga,
> 
> On the technical side it broke down on major support areas. Thats why you would have seen a sudden drawdown today.
> 
> ...




Exactly!

Broke down today, I think this one will have further to run down.  Desperately needs to rally back and see some buying pressure in at these levels, should have placed a short on it once it broke down below 26, but already have too many open.


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## SGB (17 June 2008)

*Re: WOW - Woolworths Ltd*



MRC & Co said:


> Exactly!
> 
> Broke down today, I think this one will have further to run down.  Desperately needs to rally back and see some buying pressure in at these levels, should have placed a short on it once it broke down below 26, but already have too many open.




I covered yesterday (Monday) in the mad rush home.

I expected more support around 26.00 to be honest with you but it flopped through quite easy.

H&S looks dangerous for more downside by the looks of it.

SGB


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## MRC & Co (18 June 2008)

Yeh, the increase in volume and the low close are a bad sign too.  

Rest of the week will be very interesting, if no buying pressure comes in, I would not be surprised to see this drift (or a bit faster) quiet a bit further.  

Target of 20 perhaps.............even the big guns are susceptible in this market!  So much for safe 'blue chips'! 

Just like JBH copped it a little while back (a public darling), WOW may be in for the same fate, at least in the short to medium term.


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## nick2fish (18 June 2008)

*Re: WOW - Woolworth's Limited*

I rarely but in when techos are having there say but with Dow Futures up and Woolie fundamentals still strong ie: inflation is covered by jacking up prices which has been evident of late (just ask my my wife)  
I am predicting to support to realign@ the $26.00 mark.
If I am wrong I will be buying


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## MRC & Co (18 June 2008)

Based on a quick look at current earnings forecasts, risk (not much), and current ROE and book, I would still say WOW is still overvalued, having fallen from a rediculously high price.

Futures cannot make up their mind tonight........not really doing much at all, and it's only one day worth.  

Biggest positive for WOW at the moment is the RBA looking like it will keep away from IRs for quiet some time, biggest negative for WOW is the job loss figures in Australia (what will they be next time around) and the fact behind why the RBA is planning on leaving IRs on hold (slowing growth).

Nick, I hope you are right, I have family who hold this stock, despite me strongly telling them to sell it around the 32-34 mark!


----------



## SGB (18 June 2008)

*Re: WOW - Woolworth's Limited*



nick2fish said:


> I rarely but in when techos are having there say but with Dow Futures up and Woolie fundamentals still strong ie: inflation is covered by jacking up prices which has been evident of late (just ask my my wife)
> I am predicting to support to realign@ the $26.00 mark.
> If I am wrong I will be buying




Nick, 

Next important support levels are 23.50 to 24.00. 

Agreed with fundamentals, Rodger drove it to where it is today, but some trains are harder to pull up then others.

I will be waiting for better signals to go long than guess work. Getting back to 26.00 and holding will be my signal. Until then I'll go short or sit out.
Trying to pick bottoms to go long is just too hard.

SGB


----------



## nick2fish (18 June 2008)

Cheers guys and great chart work. SP at fair price value now but I agree with your support levels. Further downside must be factored in before upward correction in the new financial year. I won't be jumping in just yet


----------



## Buster (16 July 2008)

Hey Fella's

This Forum really is only about the companies that dig for stuff isn't it.. Can't believe the events over the last week or so have not incited a single post on this company..

I hold, just for the record.. 

I have just read the latest market release, and I'm hoping someone can explain something for me..

I'm wondering how the Continued Operation 'Total Increase' of 16.0% can be reduced to a 'Normalised Increase' of 7.5% due to one extra week and Easter??  So if we throw in an Easter and an extra week to the entire 'Full Year Sales Report' we can expect to more than double the profit??

Doesn't make sense to me..

Looking forward to the explanations.. 

Cheers,

Don.


----------



## subaru69 (16 July 2008)

I thought it was interesting that the alcohol revenue in Australia is greater than the grocery sales in NZ.  I know there are a million good explanations for this but don't let the facts get in the way of a good story.
:shoot::sheep::chainsaw:

:alcohol::drink:

ps - my love of smilies continues...

pps - sorry (not) to any Kiwis


----------



## lucifuge (16 July 2008)

Although fundamentals of WOW are very good, in these times it may find support on the long term trend bouncing off $18. Certainly it seems to be heading in that direction quicker than the time the market will take to correct itself. If it does hit $18,  I'll consider that low enough and buy in, not before.


----------



## fordxbt (16 July 2008)

plain H&S reversal pattern but personally think it will find support before the 18 mark. i couldnt imagine a retailer as powerful as wow dropping 2 yrs in sp value especially after promising results during the current market conditions
my wager stands @ 20


----------



## cruise61 (16 September 2008)

I dont get it , woolworths posted huge profit and predictions are for better things to come yet the share price sits below $28.
Ive read anylist reports stating they should be around $32
Question should im  buy more shares at the lower price ?? 
I already have a nice chunk off them from family and they seem to be the more stable shares to invest but do i wait see if they go down hmmm they were $25 a month ago now they are $28 maybe i waited too long.

I think these shares will top the $30 mark within the next week or so .

Comments please what do you think?? agree to purchase more or disagree??

Thanx 
Dave


----------



## Garpal Gumnut (16 September 2008)

Its a 50/50 bet really. I am a l/t holder of WOW. In this climate though would you get them cheaper in the short term?

gg


----------



## Sean K (17 September 2008)

Could get them cheaper, but if you are a LONG TERM investor - 10+ years - what's the risk?

Only total financial system meltdown IMO.


----------



## cruise61 (17 September 2008)

Well seems shares are on track whilst the market slumps wow shares are on the increase as predicted.

shares are up 97 cents in past week so heading towards the 30 mark so guess the market gurues were on track 

lets see where they go when the market bounces back ? could be a promising week for wow share holders 

cheers
dave


----------



## cruise61 (8 October 2008)

*wow shares stronger than ever*

Amazing the stock market crashes but woolies shares continue to hold and even increase.
Westfarmers who own coles have dipped dramatically
Surely when the market returns wow shares are going to be one of the big returns.
If you are lucky enuff to have some of them as i am hold on to them as the future looks brighter even in these grim times for wow shares.
Word is mitre 10 buy is closer than assumed.

Any thoughts people ???

cheers 
dave


----------



## Julia (8 October 2008)

*Re: wow shares stronger than ever*



> =cruise61;346282]Amazing the stock market crashes but woolies shares continue to hold and even increase.
> Westfarmers who own coles have dipped dramatically
> Surely when the market returns wow shares are going to be one of the big returns.



I'm not sure that when general confidence returns you will see much change in the pattern of WOW shares, given that they are one of the few truly defensive stocks in this current environment.

Possibly more money will be going into WOW now and with the next interest rate cut as cash depositors find their income being reduced and switch to defensive stocks.


----------



## oldblue (8 October 2008)

I think Julia's right.
When confidence returns and those sexy growth and resources stocks come back into fashion, the attention will swing away from WOW. But a great, defensive stock for today's scary market.


----------



## nth brisbanite (26 November 2008)

*WOW - Woolworths, are they a good buy?*

I've been thinking of buying Woolworths for a while now and have noticed that over the last week that they have dropped in price.

Does anyone have an opinion of Woolies?  Is there any reason for their large drop last week?


----------



## nth brisbanite (26 November 2008)

*Re: WOW - Woolworths, are they a good buy?*



nth brisbanite said:


> I've been thinking of buying Woolworths for a while now and have noticed that over the last week that they have dropped in price.
> 
> Does anyone have an opinion of Woolies?  Is there any reason for their large drop last week?




I think that I have just found out the answer.  Saw the following on a news website:

*Woolworths not buying JB Hi Fi*
From: AAP 
_November 26, 2008
SUPERMARKET giant Woolworths says it has no intention of acquiring electronics retailer chain JB Hi-Fi. 

Woolworths said today it was concerned about continued speculation regarding supposed offer discussions with JB Hi-Fi. 

"Woolworths can confirm that it is not currently in discussions of any nature with JB Hi-Fi's board, management team, staff or advisers," Woolworths said in a statement.

Click here to read the full article on the website

Alternatively, you can copy and paste this link into your browser:
http://www.news.com.au/heraldsun/story/0,21985,24710382-664,00.html_


----------



## Sean K (27 November 2008)

Seems to be heading back to this now established support area around $24 ish. $29 ish Great Wall of China. Hasn't held up as well as I would have thought and there's still some downside risk, but as others have said it's supposed to be a defensive stock and may be well liked when the tide turns and people start taking their money out from under the mattress.


----------



## chops_a_must (27 November 2008)

"Seems to be heading back to this now established support area around $24 ish. $29 ish Great Wall of China. Hasn't held up as well as I would have thought and there's still some downside risk, but as others have said it's supposed to be a defensive stock and may be well liked when the tide turns and people start taking their money out from under the mattress."

That's a very scary looking head and shoulders pattern developing there Kennas.


----------



## Sean K (27 November 2008)

chops_a_must said:


> "Seems to be heading back to this now established support area around $24 ish. $29 ish Great Wall of China. Hasn't held up as well as I would have thought and there's still some downside risk, but as others have said it's supposed to be a defensive stock and may be well liked when the tide turns and people start taking their money out from under the mattress."
> 
> That's a very scary looking head and shoulders pattern developing there Kennas.



Yeah, we spotted that a while ago and mentioned it in the H&S thread I think. It actually broke down from that at $26 in July but miraculously recovered at $24. I'll take a stab and say that holds again. Or, it's off to .... golly where? $20 ish?


----------



## joeyr46 (29 November 2008)

Almost looks like it has not performed for the H&S have never seen a H&S fail after the neckline has been broken but have read about it happening. The current rally after breaking a trendline going back to 2000 has been straddling it on both sides for a short while currently below. The look of the rally is corrective and on balance volume is below its trend line. the next week will be interesting and as I'm short either profitable or slightly not.


----------



## AS414 (16 December 2008)

Woolies continues to make noise a potential entrance into the Indian grocery market.  The latest story sees them hooking up in joint venture with Pantaloon (on top of their existing Tata/Dick Smith tie in).  See:

http://internationalbs.wordpress.com/2008/12/16/the-woolies-indian-adventure-a-follow-up/

Interesting times...


----------



## AS414 (16 December 2008)

And an earlier discussion of their Indian aspirations:
http://internationalbs.wordpress.co...-an-indian-prizewoolies-eyes-an-indian-prize/


----------



## AS414 (19 December 2008)

And a new post chronicling the experiences of the different Woolworths around the globe:

http://internationalbs.wordpress.co...e-woolies-a-gratutious-business-history-post/


----------



## Sean K (23 February 2009)

Recovered ok from the $23 lows and proving to be some sort of safe haven status. Bit of support built up around $25. Just ambling sideways for the moment really until $29 broken perhaps. Wonder how it'll go once the next bottom is found and the market starts to really consolidate and perhaps restart upward movement. Whenever that is...


----------



## Boggo (23 February 2009)

They are reporting this week, 27th I think, got a feeling it may be good.

Volume is up with the price today.


----------



## oldblue (23 February 2009)

Boggo said:


> They are reporting this week, 27th I think, got a feeling it may be good.




And when is it not?

WOW has to be the ultimate defensive growth stock of our market.
I'm still looking for a "dip" to buy it in!

Disc: Not holding, wish I were.


----------



## Boggo (23 February 2009)

oldblue said:


> And when is it not?
> 
> WOW has to be the ultimate defensive growth stock of our market.
> I'm still looking for a "dip" to buy it in!
> ...




Bar chart is WOW and the line overlay is the ASX 200 (XJO) index.

Looks like they are parting ways.

(click to enlarge)


----------



## Old Mate (27 February 2009)

What the hell is wrong with the market? Woolworths announces its half year results which include a 10.3% increase in net profit and a 9.1% increase on the interim dividend and it gets sold off? I know they've been doing even better than this in the past and expectations were high but how could you complain about this kind of growth in these times?


----------



## jonojpsg (28 February 2009)

oldblue said:


> And when is it not?
> 
> WOW has to be the ultimate defensive growth stock of our market.
> I'm still looking for a "dip" to buy it in!
> ...




Here's your opportunity   At this price, looking at almost 4% fully franked div and only growth on the horizon.  Even in a recession, plans to add 7000 jobs over the next half surely have to put WOW at the top of the foodchain


----------



## ROE (28 February 2009)

Old Mate said:


> What the hell is wrong with the market? Woolworths announces its half year results which include a 10.3% increase in net profit and a 9.1% increase on the interim dividend and it gets sold off? I know they've been doing even better than this in the past and expectations were high but how could you complain about this kind of growth in these times?




WOW is trading at a premium, for a PE of 18 I expect earning need to grow at least 12% a year to even come close to justify with that sort of price...there is more down side to WOW than upside.. in the next few years I think it will run out of puff and start to take risky decision..right now they are on that way already going into NZ when it's not profitable for them to do so...

I like WOW a lot but I dont like the price so just sit and wait till the day


----------



## Julia (28 February 2009)

I sold all my stocks bar WOW and a couple of others  in January 2008.  Occasionally I do the calculation to show how far down I'd have been had I not done this.  It's a pleasant exercise.
In July 2008 I sold the WOW also to protect profits.

Now I wish I'd held on to it, as it's about $3 above my sell price.

Agree that it's the ultimate defensive stock.
Re the PE, there are times when a higher PE is completely justified.


----------



## BillyIdol (28 February 2009)

Old Mate said:


> What the hell is wrong with the market? Woolworths announces its half year results which include a 10.3% increase in net profit and a 9.1% increase on the interim dividend and it gets sold off? I know they've been doing even better than this in the past and expectations were high but how could you complain about this kind of growth in these times?




I agree, (plus add on 7,000 new jobs) from what I read, the analysts were upset that WOW _only_ made $983M, give or take a $, and they were expecting $1B plus.  So, for $17M, they weren't happy and it got marked down.

I laughed, in a sad, remorseful way.


----------



## GumbyLearner (1 March 2009)

BillyIdol said:


> I agree, (plus add on 7,000 new jobs) from what I read, the analysts were upset that WOW _only_ made $983M, give or take a $, and they were expecting $1B plus.  So, for $17M, they weren't happy and it got marked down.
> 
> I laughed, in a sad, remorseful way.




Also a company with a solid number of employees who hold stock. Always helpful!

But I tend to think it may go a little lower yet.


----------



## oldblue (1 March 2009)

..right now they are on that way already going into NZ when it's not profitable for them to do so...
QUOTE.

They're certainly profitable in NZ - EBIT of NZD91.9m in the last half - but probably not as profitable as the Aust supermarkets and certainly not growing as fast at present.
The problem is they're not the market leader in NZ. WOW has around 43% share of supermarket revenue versus 50%+ held by the leader, Foodstuffs.
WOW certainly has an active investment programme to displace Foodstuffs as No 1 and I  wouldn't bet against them succeeding in that. What they do lack at present is a Big W-type presence. That would be solved if/when they make another play for The Warehouse.

Disc: Not holding but they wouldn't have to get much cheaper to entice me in.


----------



## joeyr46 (2 March 2009)

Julia can you give me an example of how or why you would justify a high PE
18 to 20 PE suggests to me WOW could half in price and if times get tough or more demanding a lot lower


----------



## M34N (13 March 2009)

WOW has caught my attention lately, seems to have started heading down lately and heading towards its 52-week low of $22.85. Has only gone backwards in the past few days since the markets started to rally and it looks like it has plenty of support at the $23-24 range. Any jump below the $23 level and it looks like it'll be down to the next step of $20, which is again very strong support.

Very tempted to buy here and looks like it's due for a technical bounce very soon. Any buying volume that sees it go higher and I will ride this one up. Keeping a close eye on it here.


----------



## matty193 (14 March 2009)

I hope you're right M34N. I wish I could shed some light on why is had dropped over the past couple of weeks, especially considering the bounce of market over the last few days.

Yesterday's volume was, in fact, about that of the last significant support at around $24 at around 7 million, and quite a bit above the previous week or two.

Will be watching too.


----------



## freddy2 (14 March 2009)

joeyr46 said:


> Julia can you give me an example of how or why you would justify a high PE
> 18 to 20 PE suggests to me WOW could half in price and if times get tough or more demanding a lot lower




This financial year WOW will make a pre-tax profit of around $3 billion (about $2 billion after tax). If the current price cuts in half (to $15B market cap) you are looking at a 20% pre-tax return on one of the best companies in the country. Although I have some shares at the moment one can only hope for such an opportunity to buy more.


----------



## moXJO (14 March 2009)

matty193 said:


> I hope you're right M34N. I wish I could shed some light on why is had dropped over the past couple of weeks, especially considering the bounce of market over the last few days.
> 
> .




Possibly the impact of Costco or whatever its called opening stores soon. Not to sure how they will go. But considering Woolies seem to rip you off in stores it could be a major dent in their future profits


----------



## rustyheela (14 March 2009)

i would suggest coz ita a defensive stock and the market has somewhat stabilized a bit punters are selling down to maybe take on a bit more risk looking forward


----------



## rustyheela (14 March 2009)

maybe downside price pressure of a new kid on the block and a sign of things to come?

US giant Costco takes on Coles, Woolies with first Australian store at Docklands
By Kellee Nolan
AAP
March 13, 2009 01:36pm
Text size 
+ - Print Email Share Add to MySpace Add to Digg Add to del.icio.us Add to Fark Post to Facebook Add to Kwoff What are these?  Retail giant ... what customers can expect when US supermarket chain Costco opens in Australia / AFP 
Costco to opens stores in Australia 
Company hopes to draw customers from afar 
But they'll have to pay a membership fee 
SUPERMARKET giants Coles and Woolworths will have have a new kid on the block to go up against later this year with cut-price international grocery warehouse Costco set to open in Melbourne.

Costco will open its first Australian outlet at Melbourne's central Docklands precinct in July, offering everything from greenhouses to diamond rings and fresh strawberries to toilet paper, at discount prices to both wholesale and retail customers.

The store will create 225 new full-time and part-time jobs which Victorian Industry and Trade Minister Martin Pakula said was a "statement of confidence" in Victoria's economy.

The US-based Costco also planned to open a store in Sydney, and was looking "all over" the city for a suitable site, Costco Australian manager Patrick Noone said today.

The $60 million Melbourne store will be Australia's first, joining a stable of 535 Costco outlets across the US, UK, Canada, Mexico, South Korea, Taiwan and Japan.

Related Coverage
Costco promises shopper savings
The Australian, 14 Mar 2009 
Reader's Comments: Costco takes on Coles, Woolies - The Courier-Mail
Courier Mail, 
We stop big boys getting too comfy
The Australian, 12 Aug 2008 
Price checks flawed: supermarkets
The Australian, 7 Aug 2008 
Supermarket price check
Courier Mail, 6 Aug 2008 
Following the inroads made by no-frills grocery chain Aldi in Australia, Costco warehouses will offer wholesale prices to small and medium enterprises and also allow retail consumers to buy goods at wholesale prices, for an annual $60 membership fee.

Commenting on the new central Melbourne Costco site, Mr Noone said he hoped people would travel "a long way" to shop there.

"We think they will take to it like ducks to water," he said.

Australian Retailers Association executive director Richard Evans said consumers would take some time to come around to the Costco way of shopping, but the wholesaler was a welcome addition to the retailing mix. 

"Australian consumers are very set in the their ways, it's very difficult to get them to change their style of shopping," Mr Evans said.

"Retailing is very competitive but the more competition, the better it is for consumers."

Last year the Australian Competition and Consumer Commission (ACCC) ran an inquiry into the competitiveness of grocery prices in Australia, amid public concern over a perceived stranglehold on the market between Coles and Woolworths.

In its July 2008 report, it found price competition between Coles and Woolworths was limited by high barriers to entry for new competitors combined with limited incentive for Coles and Woolworths to compete aggressively.

But it found Aldi had been a "vigorous price competitor", forcing Coles and Woolworths to lower prices on many products.

Docklands retail and restaurant owners, still reeling from the closure of the heat-buckled Southern Star Observation Wheel, welcomed the


----------



## Wysiwyg (18 April 2009)

joeyr46 said:


> Julia can you give me an example of how or why you would justify a high PE
> 18 to 20 PE suggests to me WOW could half in price and if times get tough or more demanding a lot lower






freddy2 said:


> This financial year WOW will make a pre-tax profit of around $3 billion (about $2 billion after tax). If the current price cuts in half (to $15B market cap) you are looking at a 20% pre-tax return on one of the best companies in the country. Although I have some shares at the moment one can only hope for such an opportunity to buy more.




_And an increasing dividend year after year_. That is all I wanted to type because Woolies has been and still is, a great Australian company.


----------



## Dangerous (20 April 2009)

Wysiwyg said:


> _And an increasing dividend year after year_. That is all I wanted to type because Woolies has been and still is, a great Australian company.




i got on at $25 as providing the dividend stays the same i will get 3.9%, which after the last interest rate cut is more than the bank.... Would love another buying opportunity


----------



## Hank Moody (21 April 2009)

yeah i loaded up at $25 ish, i think this recent run will hopefully continue to around the $28 mark. 

Half way there so far


----------



## PhoenixXx (24 July 2009)

Hank Moody said:


> continue to around the $28 mark



No joy...hit $28 and slumped after its (worse? than expected) 7.5% sales increase. I started accumulating since low $25-ish, kept buying and bought some more sub $28


----------



## brettc4 (24 July 2009)

Can someone explain to me the drop over the last 2 days, when the market itself has gone up well??

Brett


----------



## airpoe (24 July 2009)

market expected higher single digit increase, people are now switching to Wesfarmers.

I saw it drop & got 2.5k but shouldn't, waiting to get out asap


----------



## Iggy_Pop (24 July 2009)

brettc4 said:


> Can someone explain to me the drop over the last 2 days, when the market itself has gone up well??
> 
> Brett




WOW is a defensive stock. Money will move to cyclical stocks when the market booms, also a few share raisings such as NAB will see defensive stocks go down a bit. Still a great company and one for the long term.


----------



## 3 veiws of a secret (29 July 2009)

Don't you just hate it when the stock is going gangbusters like today , and you cannot keep up with the amended sell price. Got caught today finally @ $27 dead, before I could penny pinch some more at $27.15 !!! 
AT least sold for a profit !


----------



## Sean K (25 August 2009)

WTF is WOW doing paying such a premium for Danks? This is crazy stuff. 

Danks Holdings Limited (Danks) today announced that it had signed an implementation deed with Woolworths Limited (Woolworths) under which an off-market takeover offer will be made to acquire all of the issued shares in Danks at a price of $13.50 cash per ordinary share.

*Significant premium for shareholders*

“The offer enables shareholders to realise their investment for cash at a significant premium to the current market price,” he said.

The offer represents a 65% premium to Danks’ closing share price of $8.20 on 24 August 2009, being the last trading day prior to this announcement and an 89% premium to the volume weighted average price of Danks shares for the 6 months to close of trade on 24 August 2009.


----------



## gfresh (25 August 2009)

er? So the takeover bid is attractive and likely to succeed? 

Doesn't seem excessive to me. Danks is profitable, and $87.6M is still small change to a company like Woolworths.  NPAT for Danks last year was $7M on revenue of $569.5M. I am sure WOW thinks they can improve on that with some changes. I think it's fair, and again, it's not as if we are talking $100's of M here that would leave Woolworths in excessive debt. 

Danks owns Home Timber & Hardware, Thrifty Link, and Plants Plus Garden Centres.. These days, behind Bunnings, there isn't much left and those names are recognisable to most Aussies. Allows Woolies to leverage the existing brand, and expand into new stores. 

I am not sure whether everybody is itching for further cheap hardware stores, but I guess it fills out their offering.


----------



## swm79 (25 August 2009)

kennas said:


> WTF is WOW doing paying such a premium for Danks? This is crazy stuff.
> 
> Danks Holdings Limited (Danks) today announced that it had signed an implementation deed with Woolworths Limited (Woolworths) under which an off-market takeover offer will be made to acquire all of the issued shares in Danks at a price of $13.50 cash per ordinary share.
> 
> ...




sick and tired of waiting to get in i guess... the one third JV with Lowes US wouldnt have hurt the amount of avaiable cap either! 

there's a lot of growth opp for Danks though, but yeah obv GREAT price for shareholders

65% is a LOT of premium


----------



## Sean K (25 August 2009)

90% premium to the last 6 months? Huh? 

I suppose we've had that nasty GFC thingy, but this was an opportunity to buy something on the cheap. Real cheap. 

But yes, maybe small fry for WOW.


----------



## swm79 (25 August 2009)

gfresh said:


> I am not sure whether everybody is itching for cheap hardware stores, but I guess it fills out their offering.




one of the only available retail areas left that WOW and WES dont cover.

also Costco sells hardware.... i knwo they're only small bikkies yet, having only one store.... but if they take off (and i for one hope they do!!!!!) they'll be competing with WOW head on now.

WOW must have thought competition in that area was imminent - need to establish the brand and get the change over running smooth and on track before they're put under pressure


----------



## oldblue (25 August 2009)

The Danks takeover is just to get a foot in the door and an established hardware name. The real money gets spent over the next several years as the JV with Lowes, second biggest hardware retailer in the US, rolls out its new operation.


----------



## Muschu (20 September 2009)

Anyone else out there getting bored with the SP performance of WOW these past 6months?  
I know there's little reason to complain about a 16% rise, and WOW has proven exceptionally resilient.  However when the XAO has gone up more than double that amount in the same period I suspect it is a fair question to ask whether the investment is better placed elsewhere...


----------



## oldblue (20 September 2009)

Well, I don't hold WOW but have spent the last x years kicking myself for that and waiting for a decent dip to buy some.

I'd have been more than happy to tolerate some of that "boredom".


----------



## Julia (20 September 2009)

Muschu said:


> Anyone else out there getting bored with the SP performance of WOW these past 6months?
> I know there's little reason to complain about a 16% rise, and WOW has proven exceptionally resilient.  However when the XAO has gone up more than double that amount in the same period I suspect it is a fair question to ask whether the investment is better placed elsewhere...



Rick, WOW didn't fall with the same vehemence as most other stocks in the first place, so fairly naturally it's not going to have to rise as much to make up the lost ground.

If you have a look at a two year chart, WOW from peak in Nov 07 to trough around July 08, the SP dropped around 20%, whereas many other companies experienced 50% or more.

WOW is imo your archetypal defensive stock.  You'll never get the exponential large rises you'll find with e.g. a miner, but neither will you lie sleepless at night during a downturn.

Simply depends on what you're looking for.


----------



## Muschu (20 September 2009)

Thans Julia.  I realise what you are saying.
I exited WOW ages ago - as I did all other stocks bar 1.
I began to re-enter the market from March and included WOW at that time.  Virtually all of my other stocks have exceeded the March-September index by a significant margin.  WOW is way under the index for that period.  
Yes, it's defensive.  Maybe I have become a bit more "aggressive" in my investments than I was.
I'm not complaining and still remain watchful.
Best wishes

Rick


----------



## ROE (20 September 2009)

Muschu said:


> Anyone else out there getting bored with the SP performance of WOW these past 6months?
> I know there's little reason to complain about a 16% rise, and WOW has proven exceptionally resilient.  However when the XAO has gone up more than double that amount in the same period I suspect it is a fair question to ask whether the investment is better placed elsewhere...




WOW is a good company no doubt but it price for perfection

I prefer good company price at a discount

Uncle Graham once told me a good company price at a discount, the down side is low but the upside is high...everyone know the margin of safety few practice them

Going the other way has the reversal effect
A bad earning year for WOW will see it price pop and the hardware venture dont work out
as planned more pop


----------



## Fool (9 October 2009)

If I am in the Dividend Reinvestment Plan for 9 October 2009, when do I get my new shares?

should be today no?


----------



## RamonR (9 October 2009)

They should be credited today.
Mine have shown up in etrade today.

Previous reply was removed for some reason


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## Julia (28 October 2009)

Apparently WOW has made an international 'best of' list:


> http://www.businessspectator.com.au/bs.nsf/Article/BCG-pd20091026-X78L5?OpenDocument&src=kgb




I'd been intending to buy back into WOW but the performance of the SP over recent months has been less than great.  Looks as though WES (with Coles finally showing some real growth) might perhaps be the better alternative.


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## Kremmen (3 November 2009)

There's a "members' statement" from some shareholders included with the notice of AGM, basically saying that pokies are evil and Woolies shouldn't be involved with them.

Pokies are, of course, extremely profitable. I wonder why the little group of WOW shareholders who don't like them don't just sell their shares and move on if they don't like it? (Their rantings won't have any effect except to waste time and resources anyhow.)


[Disclosure: I'm both a WOW and CWN shareholder, so clearly I want the best result for my investment and am not averse to profiting from gambling.]


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## oldblue (3 November 2009)

Julia said:


> Apparently WOW has made an international 'best of' list:
> 
> 
> I'd been intending to buy back into WOW but the performance of the SP over recent months has been less than great.  Looks as though WES (with Coles finally showing some real growth) might perhaps be the better alternative.




Yes, the short term technicals are a bit of a mess but that only moves WOW further up my watchlist!

Certainly not the time to buy but it's getting more attractive as time goes by.


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## Tukker (9 February 2010)

Gradual sell off in WOW for the last 4 months, when the rest of the market was enjoying significant recovery.  Now closing in on lvls seen only a few weeks since 2008.  I could argue that WOW is nearing a price floor around $24 (+/-10%) and barring any significant fundamental news, should be one of the first to rebound in the short term. 

Bit of spooked behavior going on atm in the market in general. Personally im gonna play wait and see until a new trend is formed. I don't Hold.

Anyone else to comment? Nothing posted here since November


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## satanoperca (9 February 2010)

Both WOW and WES have both had significant retraction of their share prices over the last few months. Wonderful for shorters, not so good for long term holders.

I see further weakness in their share prices due to the trade war between the two for market share that has recently erupted over Australia wide uniform pricing.

Cheers


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## wns (26 February 2010)

Very good HY result announced by Woolies today, which the market liked.  I bought into them about two weeks ago.


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## Dracuu (28 February 2010)

I trade using about 95% technicals so I cannot comment on the fundamentals but from a technical viewpoint I believe that WOW appears technically overbought on a retracement within its major down trend. I expect a continuation of its medium term trend down to the $25.50 level.

This is a trade I will place tomorrow (CFD's) -

WOW – Trade Going Short

Entry range $26.80 - $26.90

Stop loss $27.10

Profit target $25.50

Time period is short to medium term as I expect this profit to be reached in 2 - 4 weeks.


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## nulla nulla (1 March 2010)

Interesting perspective, wow ready for a short to $25.50 as a continuation of a downtrend.
I was re-reading "Guppy - Chart Trading" again over the weekend. He makes the point that the movement of the share price is driven by the amatuers (at open) and the professionals (at close) reflecting the different value assessments placed by the two groups and the different levels of emotion bought into the value determination. 
The downward dip at close might be interpreted to mean that the professionals considered the share was overbought on the news and the close was a good time to lock in profits or get set with a short for the retrace. 
This would support your perspective. However, I'm not sure that the share wasn't oversold recently in the first place. I feel that the share could now trade up to $28.50+ (in the near term) on the strength of the report, combined with wow being a slightly defensive share in these times of uncertainty.
Of course I could be wrong and everyone should do their own research.


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## ROE (1 March 2010)

WOW fundamentally = Great
Management = Great
Everything else = Good
Price = Haven't offer me the margin of safety I want 
so keep waiting, could be a long wait, patient is a virtue


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## wns (1 March 2010)

ROE said:


> WOW fundamentally = Great
> Management = Great
> Everything else = Good
> Price = Haven't offer me the margin of safety I want
> so keep waiting, could be a long wait, patient is a virtue




Hi ROE, what calculation(s) / method(s) are you using to get an estimate of value?

I'm hoping the SP goes down again so I can pick up more.


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## Mofra (2 March 2010)

satanoperca said:


> Both WOW and WES have both had significant retraction of their share prices over the last few months. Wonderful for shorters, not so good for long term holders.
> 
> I see further weakness in their share prices due to the trade war between the two for market share that has recently erupted over Australia wide uniform pricing.



Consumer staples are regarded as a defensive sector due to the increase of people buying groceries in poorer econimic climates as people are less likely to eat out. Any retrace could be symptomatic of the market starting to believe in favourable times ahead.

Disc: I hold both in my LT portfoilio.


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## noirua (9 March 2010)

I bought some shares in Woolworths at $28 today as the yield and buyback seem like pluses even though the PE is a bit demanding should growth falter at anytime.


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## nulla nulla (10 March 2010)

WOW sems to be having trouble holding the recent rise to the $28.00 level. It still has a while to go before going exdiv and should be good for a few more cents before then as more people buy in for the dividend.


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## noirua (24 March 2010)

nulla nulla said:


> WOW sems to be having trouble holding the recent rise to the $28.00 level. It still has a while to go before going exdiv and should be good for a few more cents before then as more people buy in for the dividend.




Look to be firmly over the $28 level now and that despite going xd the 53c divi. Buy back has a longway to run yet and target $30 looks set to be beaten very shortly.


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## noirua (9 April 2010)

noirua said:


> Look to be firmly over the $28 level now and that despite going xd the 53c divi. Buy back has a longway to run yet and target $30 looks set to be beaten very shortly.




A little help from our friends at 'The Bull' and this $30 target looks fine: http://www.thebull.com.au/articles_detail.php?id=10573


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## noirua (10 April 2010)

WOW fell back a little on Friday and it appears there has been a rest in the buyback as no shares have been bought for cancellation since 1st April. Probably because the price was pushing close to $29.


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## Tukker (10 April 2010)

No good signals at this point. But bets are for a retraction of some sort, maybe a quick run at 29 again on Monday then a pull back to 27 by the end of March, revisiting support of December. If i had anything to spend it would be on a short trade of some sort.


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## nulla nulla (14 April 2010)

Fell back further over the last few days. That short would be well in the money. Is there any particular reason for the fall back, increase in costs or write downs? Or is it linked to softer retails sales, drop in housing loans etc?


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## noirua (14 April 2010)

nulla nulla said:


> Fell back further over the last few days. That short would be well in the money. Is there any particular reason for the fall back, increase in costs or write downs? Or is it linked to softer retails sales, drop in housing loans etc?




Fall is mainly due to a delay in the companies trading report that has been put back until the 30th April.


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## babka (14 April 2010)

WOW target share price was downgraded to the lower price than the current one and "underperform" rating slapped.


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## oldblue (14 April 2010)

babka said:


> WOW target share price was downgraded to the lower price than the current one and "underperform" rating slapped.




Hi, babka.

Whose report/recommendation was that and when was it dated?

Can you provide a link to it?


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## Julia (14 April 2010)

There has recently been a lot of very positive comment about how we're in another mighty resources boom.

This usually prompts a switch from defensive stocks like WOW into the miners.


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## nulla nulla (15 April 2010)

Nice bounce off the interday low to finish in the green. Wonder if it will retrace today after the announcement of earmarking $4 billion to develop the hardware store chain?


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## noirua (23 May 2010)

At present levels and the continued buy-back and dividend helped by reinvestment: Woolworth are a stock I've been as keen about as the company is. As cheap as chips! Not quite, but solid enough with the European problems far away.


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## The_Snowman (23 May 2010)

Certainly anything can happen, but wait for some type of confirmation first.

Other "W" stocks showing similar price patterns are -
WPL
WDC
WES
WOR


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## oldblue (24 May 2010)

I agree with that.

I like WOW too but I'd first like to see some signs that those Jan/Feb lows aren't going to be re-visited.


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## Old Mate (24 May 2010)

Just bought another $7000 worth. Based on fundamental analysis, I don't think you can go too wrong with wow.


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## noirua (2 June 2010)

Old Mate said:


> Just bought another $7000 worth. Based on fundamental analysis, I don't think you can go too wrong with wow.



Yes; it looks as if WOW supported by the buy-back are likely to improve and the dividend looks certain to increase further and into the future.
A safety stock with good returns and I've added quite a few more in my buy-with-open-arms policy of late.
Many other sectors look very high risk and some under a dark 'Henry cloud'.


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## The_Snowman (6 July 2010)

Looks to me like it is going down with general market sentiment at the present time. Missed a great 50-50 Strategy trade entry there at $27


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## jonojpsg (30 July 2010)

I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in.  Expecting a steady rise back to the middle of the range around 27 over the next month or two.

Tis a reasonable risk-reward with the 20:1 leverage that CFDs give.  For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year  $25.19 (which is where I put my stop).  RR ratio of 2:1.

Personally can't see it getting past that given the defensive nature of the company - if the market tanks, people will shift back to it, if it heads up, WOW gets dragged with it.  Can't lose hey 

PS looking forward to getting spanked for that last comment


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## skc (30 July 2010)

jonojpsg said:


> I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in.  Expecting a steady rise back to the middle of the range around 27 over the next month or two.
> 
> Tis a reasonable risk-reward with the 20:1 leverage that CFDs give.  For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year  $25.19 (which is where I put my stop).  RR ratio of 2:1.
> 
> ...




That is not how you should use CFDs!! You've just put on a naked $50K position - how big is this position relative to your account? (Ignore what I just said if your account is over a million).

Last year during the GFC they are well supported by government stimulus and not threatened by a weak Coles. There weren't even Masterchef on TV. The fundamentals are somewhat different (poorer) for WOW now imo.

-Deflating food price as a result of price competition from Coles.
-Renewed competition from Coles (their new format stores are nice...) and also Metcash (IGAs).
- Dicksmiths / Big W etc not really getting anywhere.
- Huge capital requirement on rollout of hardware stores to take on Bunnings.

Good luck.


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## oldblue (30 July 2010)

Yes, not my idea of a good bet at the moment.

Apart from the fundamentals, technically, and I'm no expert at this, WOW's chart doesn't look at all promising. SP in a downtrend, relative strength at a low point.

WOW is one of our best companies but not good buying at present, IMO.


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## jonojpsg (30 July 2010)

skc said:


> That is not how you should use CFDs!! You've just put on a naked $50K position - how big is this position relative to your account? (Ignore what I just said if your account is over a million).
> 
> Last year during the GFC they are well supported by government stimulus and not threatened by a weak Coles. There weren't even Masterchef on TV. The fundamentals are somewhat different (poorer) for WOW now imo.
> 
> ...




All good points.  I agree the MasterChef phenomenon being aligned with Coles is definitely a downer for WW no doubt.  Food deflation yes and will have to wait and see how that pans out.

Te $50k naked position - well, yep, but I explained how I was trading it - my account is definitely NOT $1m, would love it to be but am happy to wear the risk of $1200 for a potential gain of $2400 given the weight of the channel lends itself to a rebound back towards $27.

Agree trend is down, but that's always how channels work is it not, price trends down until it hits the base of the channel then rebounds and heads back to the top?  At least that's my interpretation

Anyway, we'll wait and see...will keep you posted


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## sptrawler (30 July 2010)

I don't have WOW, but did buy in at $2.40, what a great company. However I do feel they have "dropped the ball", easy to do when you are hammering an inept opposition. The problem with being on top of the heap, is the competition knows what it has to beat and I think WES is up to the job.
My thoughts are WOW will trend back to a P.E of 12 -15, which one would expect in a competitive market place for consumer staples.
I think the days of WOW commanding a PE of 26 and a dividend of 3% are over. It's hard work from here.


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## So_Cynical (30 July 2010)

jonojpsg said:


> Agree trend is down, but that's always how channels work is it not, price trends down until it hits the base of the channel then rebounds and heads back to the top?  At least that's my interpretation




That's how its worked for me...many many stocks are ranging and its easy money just trading the range and buying the bottom of the range with blind faith, don't suit the trendy's of course but each to there own...now having said all that i still have to agree with SKC a little and add to his list of negatives.

Aldi and Costco...2 very big negatives for woolies...personally i would of waited for the SP to fall a little below the trend line.


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## skc (1 August 2010)

jonojpsg said:


> All good points.  I agree the MasterChef phenomenon being aligned with Coles is definitely a downer for WW no doubt.  Food deflation yes and will have to wait and see how that pans out.
> 
> Te $50k naked position - well, yep, but I explained how I was trading it - my account is definitely NOT $1m, would love it to be but am happy to wear the risk of $1200 for a potential gain of $2400 given the weight of the channel lends itself to a rebound back towards $27.
> 
> ...




That's how channel works but I'd prefer trading in the direction of the channel - i.e. short at the top of the channel rather than buy at the bottom.

It does seem like you are fully prepared about the risk, and the chance of WOW gapping significantly lower seems small enough. But for general prudence in trading, keep your position size at some maximum percent of your total account may be a good rule to set up.

Good luck with the trade.


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## The_Snowman (2 August 2010)

jonojpsg said:


> I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in.  Expecting a steady rise back to the middle of the range around 27 over the next month or two.
> 
> Tis a reasonable risk-reward with the 20:1 leverage that CFDs give.  For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year  $25.19 (which is where I put my stop).  RR ratio of 2:1.
> 
> ...




Here's wishing you luck, this might help you some, but overall you may be at the mercy of greater market sentiment if indexes decide to head for an October low..... 

Chart is showing a typical A-B-C correction to the previous swing high, giving entry point and target for you  also notice the previous Volume Spike - take the profit at the target or trail a tighter stop if it goes to infinity and beyond


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## The_Snowman (7 August 2010)

jonojpsg said:


> I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in.  Expecting a steady rise back to the middle of the range around 27 over the next month or two.
> 
> Tis a reasonable risk-reward with the 20:1 leverage that CFDs give.  For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year  $25.19 (which is where I put my stop).  *RR ratio of 2:1.*
> 
> ...




Feeling better today? and not a bad day in New York even after the NFP figures released, so more confidence for next week.....  Bring your stop to breakeven, a WIN - NO LOSE situation, and let her run, possibly better than your 2 to 1 estimate


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## nulla nulla (7 August 2010)

MACD chart as at 06-08-10 looks good. I'm looking for further recoveries as woolworths announces their profit and final dividend.







The RSI chart indicates the share price is gapping up above the average and traders would need to be wary of any sudden retrace. A tight trailing stop loss to lock in any profits would be a good idea.


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## Tukker (7 August 2010)

nulla nulla said:


> MACD chart as at 06-08-10 looks good. I'm looking for further recoveries as woolworths announces their profit and final dividend.
> 
> View attachment 38278
> 
> ...




This looks more like a better short position to me. 

The med term trend is down and barring any significant news I fail to see evidence to the contra. Recent recovery is typical to previous attempts signaled by divergence, which ended up in a continuation of the trend.  I would say its a 75% chance of a retraction come monday especially with the US market weakness on Friday. 

Do well by your stops and good luck to you.


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## jonojpsg (8 August 2010)

The_Snowman said:


> Feeling better today? and not a bad day in New York even after the NFP figures released, so more confidence for next week.....  Bring your stop to breakeven, a WIN - NO LOSE situation, and let her run, possibly better than your 2 to 1 estimate




Am indeed thanks snowman  and have done just what you suggested, although must admit I snuck the stop a lil higher than breakeven, just to make sure I have the psychological nicety of coming out with a profit even if it gets hit


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## nulla nulla (15 August 2010)

One week on and *wow* traded in the range $26.30 - $26.70 with increasing volumes. The macd chart shows wow gapping above the moving average. 
Hard to work out if *wow* is lifting:
1. on purchases by investors buying "defensive" stocks where others were falling through the week;
2. investors buying in, seeing the curent price as oversold; or
3. the annual report is due for release and the dividend will be announced.

Personally, i'm looking for a break out above $27.00. As always, do your own research.


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## Huitzii (15 August 2010)

Im watching WOW closely but im not convinced that its heading north from my following T/A chart.
ATM its hovering sideways just above the $26,25 resistance, from here it could break north toward the $27.3 higher resistance or it could just as likely break south toward the $25.5 lower resistance.
10 day average is climbing while the 68 and 90 day average are still slightly heading south.
MACD is positive.
IMHO the next few trading days will decide where its heading.
I will wait and see what the market says and see if it presents me with a definite direction.
DYOR


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## skc (26 August 2010)

WOW jumping 7% on open thanks to the result. I really don't understand how that came about. Can't the analysts add up 4 quarters of sales report and work out with a reasonable degree of accuracy on what WOW's full year profit should be? When was the last time WOW "surprised" either way on their results.

Super profit tax on supermarkets anyone?



jonojpsg said:


> I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in.  Expecting a steady rise back to the middle of the range around 27 over the next month or two.




This trade closed yet?


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## skc (26 August 2010)

Let me take that all back. The spike up was due to the complicated off-market buy back arranagement offered. Essentially some free tax loss credits as the buy back price is made up of capital return and fully franked dividends. Would have been a perfect short on the open nonetheless.


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## noirua (27 August 2010)

skc said:


> Let me take that all back. The spike up was due to the complicated off-market buy back arranagement offered. Essentially some free tax loss credits as the buy back price is made up of capital return and fully franked dividends. Would have been a perfect short on the open nonetheless.




Yes! Jumping up and down like a minnow mining stock are Woolworths and hopefully we'll see my $30 target reached about 6 months later than I thought. A company generating a lot of cash as the present buyback shows, though it does seem that WOW can't see where else to invest the money. Staying firmly in Australasia appears to be the current policy - and why not! - with a fast growing Aussie population.


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## Huitzii (27 August 2010)

Regardless of the buyback it was the largest 1 day gain that WOW has seen is quite some time...it might wake up the button pushers


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## nulla nulla (27 August 2010)

Just in case you missed it, she went...wow wow wow........bang!! 




It was certainly looking for a break out. Curious to see what it can do from here. Profit forecasts are good but i find it hard to get bullish on on share while the rest of the world (and markets) are suffering from gloom and doom disease.


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## noirua (2 September 2010)

Huitzii said:


> Regardless of the buyback it was the largest 1 day gain that WOW has seen is quite some time...it might wake up the button pushers




Woolworths are doing well despite what some would like us to believe. Held back by a price war? - Yes, just a little. 
Probably, imho, should be on a 3.5% yield as markets move into Spring. Points to a target of $32 or there abouts.

What more can you say about Woolworths except, "WOW".


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## nulla nulla (2 September 2010)

It will be interesting to see if it gets oversold when it goes exdiv. Might provide a re-entry level for those that trade woolworths.


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## nulla nulla (3 September 2010)

Testing the recent highs, wow continues to climb on the strength of their results (and probably the forthcoming dividend).


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## noirua (9 September 2010)

I can't help getting excited about WOW at the moment as growing profitability is shown in the recent results. Analysts are looking for a price of $30.50 but the shares may well be set to move on further than that. I have a sell plan at around $35 and expect the target to be reached in 2010, however, I was wrong last time.
The chart shows a sharp breakout from the downtrend that has surprised many as Coles looked to be doing better. I tell yee, "Coles, you are  no President Woolworths."


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## qldfrog (20 September 2010)

*WOW - Woolworths off market buy back*

A probably stupid question but why would anyone want to sell back shares in the buy back instead of just selling on the market (saving 20$ of broker fee?) 
Does not seems reasonable..
Any CGT advantage, I have had a quick read of the prospectus but still puzzled.

Any help welcome


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## nulla nulla (21 September 2010)

Going Ex-div didn't seem to do the share price any harm. 
Does anyone consider that the present support for Woolworths could be indicative of share holders reducing their risky stocks for stocks like wow that are considered "safe"?  
Seems to be at a bit of a premium to me at the current price level and in the present financial climate.


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## lianeisme (22 September 2010)

Seems to be at a bit of a premium to me at the current price level and in the present financial climate.[/QUOTE]

In this climate people still have to eat the choice of super markets are not abundant in Australia and New Zealand you really only have Woolworths or Coles.
In this climate people need to drive to get to work petrol is needed they also have a monopoly on that Caltex and Woolworths petrol.
In this climate people are staying home having parties or watching videos they buy alcohol for their enjoyment they also have a monopoly on this. They also own Dan Murphy's
In this climate people shop in more affordable stores for presents and clothing and everything else they also own Big W
They also own the Taverner Hotel Group, Bruce Mathieson Group, and Australian Leisure and Hospitality Group. Dick Smith Electronics, Dick Smith Power House, Tandy. 
They are now branching into Hardware stores. So you have to ask yourself are we now in a different climate to 6 months, two years or 10 years ago is it expensive or is it cheap? Only you can be the judge, it all gets down to supply and demand.  I hold these stocks and quite a few my stocks are not for sale in the short term so that supply has dried up, I’m sure there are a lot of other investors thinking the same. Mind you over a year ago I was not into this stock I was playing somewhere else.


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## BSD (22 September 2010)

*Re: WOW - Woolworths off market buy back*



qldfrog said:


> A probably stupid question but why would anyone want to sell back shares in the buy back instead of just selling on the market (saving 20$ of broker fee?)
> Does not seems reasonable..
> Any CGT advantage, I have had a quick read of the prospectus but still puzzled.
> 
> Any help welcome




Buy back works for low or zero tax environment holders (allocated pensions). They get full benefit from the oversized franked portion of the buy back price and therefore their total sale price is greater than prevailing market price. 

Risk is scaleback

Great move for WOW overall as they get to buyback stock at big discount to market using tax arbitrage.


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## noirua (29 September 2010)

Just ahead, round the next bend and we see the splendid $30 fence and in the lead, by a distance, are Woolworth. This time it's up and over and on to fence $31.
Seriously though folks, the new buyback is in the wings and about to flutter forth and give Woolies that bit extra to take us on to $32 - the fence that is.


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## noirua (20 October 2010)

A 4.1% rise in first quarter sales augers well for WOW and should hold the stock up after a Dow slide overnight in the USA.

In fact we are hoping ASF will holdup well at The Bull, we need your help: http://www.thebull.com.au/the_stockies/forums.html


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## poverty (24 November 2010)

Can anyone tell me why WOW has dropped so hard the last few days?  Starting to look like good value to me.


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## Dangerous (24 November 2010)

Poverty, the buyback was scaled back hardcore leaving a lot of the big buyers with an overhang.

I bought a put on WOW at this time and used the simple calc of mkt cap pre-buyback and applied it to the new amount of shares on issue - i got 27.57 as the figure it would come back to.  I got out of the short position at about 27.80.

I am, however, not at all surprised to see that it has overshot this mark.  26.50 is now in its sights.

I agree with you, unlike most stocks i do not trade this one.  I accumulate it on the dips.  It is in a defensive industry and Wesfarmers has too many non-performing subsidiaries for my liking.  You should also look at Metcash (MTS) - IGA distributor and very healthy divs.


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## poverty (24 November 2010)

Thanks for the excellent response dangerous 

If it goes south of 26.50 I'm definitely going to bet the farm on this one, I just can't see it remaining that low for long.  Too bad it went back up a bit today!


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## oldblue (24 November 2010)

I wouldn't be looking to buy at the absolute bottom of any dip. I'm just not that lucky!

If I believed in buying WOW on the dips I'd regard this one - around 10% from recent highs - as a reasonable opportunity.


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## Dangerous (24 November 2010)

as much as i like woolies, the hardware move does concern me.  It will cost a lot and I don't really see that big a hole in the mkt.

The other thing is despite there now being less shares on issue (after buyback) there is still a chance that they will keep dividend the same (not increase it proportionally) as capex increases.


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## jonojpsg (24 November 2010)

This has been a great stock to trade the swings on over the last year or two - bouncing between $26ish and $29ish a few times pretty regularly.  Really should've taken the short when they hit $30 last time, was almost a given that we'd see $27 again IMO.


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## ROE (24 November 2010)

poverty said:


> Can anyone tell me why WOW has dropped so hard the last few days?  Starting to look like good value to me.




Don't think Woolie is cheap, I think it's fair value.

Don't confuse great fundamentals and great business with price.

Price is everything, you buy an extremely good business and over pay you
get under performance.

Look at Woolies since 2008 it hasn't move out from 26-30 range that, in my book it is under performing the market in the last 2 years and I reckon it could still be under performing next 2 years.

Great business, trade at premium I pass  and at $34 it was a bubble
it could takes another 3-5 years before it get back to that level at currently grow rate...


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## So_Cynical (24 November 2010)

ROE said:


> Don't think Woolie is cheap, I think it's fair value.
> 
> Don't confuse great fundamentals and great business with price.
> 
> ...




Price is everything however timing and time frame are also very relevant...WOW has underperformed over the last 2 years however "big picture" over 5 years its 50% in front of the ASX200...the GFC (market bottom) was hardly a blip in the WOW share price.
~


----------



## Boggo (24 November 2010)

WOW popped up in a larger degree trend ABC scan tonight if anyone is interested in that sort of thing.

Take note that the two small triangles were both valid entry and then both were stopped out trades so in theory already down $800.

Third time lucky ??

(click to expand)


----------



## 3aq1e (25 November 2010)

What point are people going to load up on WOW shares, below $27.


----------



## skc (25 November 2010)

3aq1e said:


> What point are people going to load up on WOW shares, below $27.




MTS has div yield of 6% and trading at PE ~14.6.

WOW has div yield of 4.26% and trading at PE ~16.5. Not to mention it has a fair bit of cap ex over the next few years to roll out the hardware big boxes.

WOW without great sales growth may need to support dividend yield at 5-5.5%. Say next year dividend goes up 10% to $1.26, the share price target will then be $23 to 25.3...   

Having said that WOW still enjoys some market aura that deserves 10% premium.

So current price is kind of fair value I suppose.

I will load up below $22.


----------



## Bean0 (8 December 2010)

ROE said:


> Great business, trade at premium I pass  and at $34 it was a bubble
> it could takes another 3-5 years before it get back to that level at currently grow rate...




If this did occur, to me that seems to be a 3-5 year return (dividends + reinvestment + capital gain) of 9-13%.  Given the solid nature of WOW what do others think about that sort of return?


----------



## jonojpsg (8 December 2010)

Bean0 said:


> If this did occur, to me that seems to be a 3-5 year return (dividends + reinvestment + capital gain) of 9-13%.  Given the solid nature of WOW what do others think about that sort of return?




As ROE pointed out, WOW is probably pretty fair value at current price...I'm thinking I might jump back in again as it is reaching the bottom of the range it has been in and should be heading back towards $28 again as people like yourself realise that it is a fair buy now.

As a longer term play though, buying at current price would be a reasonable thing to do...if I had an SMSF I would probably be considering putting a chunk into this...all IMO of course and I know very little


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## poverty (8 December 2010)

Bought 425 @ 26.52 today, gambling with my new margin loan.  My first ever stock purchase not thru employee SPP etc.


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## ROE (8 December 2010)

Bean0 said:


> If this did occur, to me that seems to be a 3-5 year return (dividends + reinvestment + capital gain) of 9-13%.  Given the solid nature of WOW what do others think about that sort of return?




Couple of things I don't know how well WOW will perform in the next 3-5 years....

The share buyback I don't think it is good capital management given it doesn't have the money to do it...offload property and take on debt to cover for buy back. 

WES wont let WOW takes its customers in hardware so a price war is likely to happen as soon as WOW open the first shop.

I am no bunnings lover I reckon their price is a ripped off, they are convenient but price wise they aren't cheap....I welcome WOW enter the market to keep the bastard honest but a price war wont do good for
any of them lower return on for both of them...

High debt house hold and hi-fi deflation probably slow down any excessive spending on grogs, and entertainment stuff....

with so much uncertainty I like a big margin of safety for WOW
maybe around $20  I maybe tempted but else I keep money in the banks
earning 5% ...

WOW is a market darling so I doubt I can get at that price but I cant get the price I want I just don't get 

I also has another stock I like a lot and if the market jig WOW down that path and this same stock fall by the same margin I buy this other stock over WOW because I prefer business where they can name their price and customers just pay up  and I am one of them...


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## ROE (8 December 2010)

poverty said:


> Bought 425 @ 26.52 today, gambling with my new margin loan.  My first ever stock purchase not thru employee SPP etc.





Don't you get employee discount   , most place I work offer like 5%-10%
discount for staff purchase with limitation of course.

I think you invest in a solid business  but for me price is everything 
don't care how good you are if price isn't right I wont buy.


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## poverty (9 December 2010)

ROE said:


> Don't you get employee discount   , most place I work offer like 5%-10%
> discount for staff purchase with limitation of course.




The only thing going is the ability to salary sacrifice $1000 a year to the SPP to buy shares, so there's no discount but I do save 30c in the dollar of tax, but it's small potatoes.


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## nulla nulla (8 January 2011)

It took 13 trading days to climb from the low of $26.06 to $27.20 and only 5 trading days to give it all back. 
The xmas retails sales are suspected to have been disasterous, the sales report is due soon and it is not going to be pretty. I expect wow to test the lows of $25.00 (and lower) before there is any kind of bounce linked to the AGM and dividend announcement. 
All this talk about retail sales sufferring due to savy customers buying online isn't helping either, even if it is only a drop in the bucket.


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## jonojpsg (8 January 2011)

Well I figured the drop's a bit overdone for WOW - retail sales as such (discretionary)make up a minor part of their sales compared to the staples (food, alcohol (hehe), etc.) although I guess any drop in that part is unlikely to be made up for by the staples side of things so will end up as an overall drop in sales growth so SP will suffer.

I bought in @ $26.25 hoping for a quick bounce back to mid-high 26s so will see how that goes...


----------



## Boggo (8 January 2011)

nulla nulla said:


> I expect wow to test the lows of $25.00 (and lower) before there is any kind of bounce linked to the AGM and dividend announcement.




This EW projection would tend to agree with that statement.

(click to expand)


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## Tyler Durden (24 January 2011)

Lowered forecast earnings. Drop today probably reflected that, but wondering if it'll continue to drop over the next few days?


----------



## jzell67 (25 January 2011)

Here's hoping it does. For me anyway...

Beginner trying to buy in and the price atm is unacceptable...


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## nulla nulla (25 January 2011)

Since my post of 8 January 2011, wow has bounced from $26.20 up to $28.20 then retraced again. Totally unexpected early bounce today after all the hype of low xmas sales. Mind you it could be a dead cat bounce.

Having reached $28.20 it appears to have retraced on release of the profit downgrade for the current fiscal year and what lies ahead. The bounce today (slightl) could be attributable to the record profit (?). 

The report summarises as "Strewth, things are tough, they are going to get tougher, but by the way we made a record profit". Must be bonus time for the executives.


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## Tysonboss1 (16 February 2011)

I thought the followers of Woolworths might get a kick out of this Vid.


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## Julia (16 February 2011)

That's all very fine, tyson.  Yes, WOW is a successful business.
But it's SP is essentially flat.  $34 just before the GFC and now a miserable $26.50 or so.
And the yield at 4.5% hardly makes up for the lack of capital appreciation.

So I don't see the point in 'owning a magnificent business' if you're not making decent money out of it.


----------



## Tysonboss1 (17 February 2011)

Julia said:


> That's all very fine, tyson.  Yes, WOW is a successful business.
> But it's SP is essentially flat.  $34 just before the GFC and now a miserable $26.50 or so.
> And the yield at 4.5% hardly makes up for the lack of capital appreciation.
> 
> So I don't see the point in 'owning a magnificent business' if you're not making decent money out of it.




Thats right, As you can see from the video when it was trading at $34 it was actually worth much less probally around $20. 

Rogers Value for it in 2010 is around $26 so it is sitting on or slightly above it's intrinsic value.

I can't see how your saying there has been a lack of capital gain, I remember WOW being $4 around 1999 - 2000 it's now >$26.  

the goal of value investing is to identify Great businesses, then indentify the true underlying value of the business, and then as the price fluctuates over time above and below this value you buy it when it is below.

When you pointed out the the WOW share price has gone no where in relation to the high pre GFC of $34, you are infact pointing out the core principle of value investing and that is longterm stocks will trade back to their intrinsic value.

I don't own WOW, have not owned them since 2001


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## nulla nulla (17 February 2011)

Dropping to an interday low of $26.24, wow has crept back up to the $26.50 - $26.60 range and held it for the last few days. Due to announce it's div on Monday 21/02/11, it would not surprise me to see the price run up before it goes exdiv, like it did last year.
Seems to have a pattern of rebounds between reporting and going exdiv, then crashing after going exdiv (Dividend strippers perhaps?).


----------



## poverty (17 February 2011)

nulla nulla said:


> Dropping to an interday low of $26.24, wow has crept back up to the $26.50 - $26.60 range and held it for the last few days. Due to announce it's div on Monday 21/02/11, it would not surprise me to see the price run up before it goes exdiv, like it did last year.
> Seems to have a pattern of rebounds between reporting and going exdiv, then crashing after going exdiv (Dividend strippers perhaps?).




Yeah I'm looking to hold for the pre-div price run-up, but not sure about whether to just sell before ex-div or take the div and sell on the open the next day.  Maybe I'll do half and half.


----------



## Noddy (17 February 2011)

For whatever it's worth, RM's latest valuation for WOW is $23.69.
Can check out his latest calculations on his Blog site.
He thinks you need to buy it below this price, the lower the better.


----------



## nulla nulla (26 February 2011)

Another buying opportunity yesterday, shortly after open, when the share traded arround $26.30 before working it's way up to $26.95 to close on $26.85. 
Response to the Report released seems fairly muted. The press release summary shows continued growth, reduction in costs, increased profits, increased earnings per share and increased dividends per share.




Page 20-21 of the press release shows the continued improvement in profit after tax over the past 5 years, yet some analysts consider this to be a soft result. You have to wonder what these people expect. WOW has maintained profitability during the gfc, maintained dividends and is now trading at a lower price earnings ratio than it was in 2007 (before the gfc), yet for some it is not good enough.




I suspect the market will get behind wow in the run up to going exdiv and I wouldn't be surprised to see it go higher after going exdiv. WOW appears to be focused on maintaining and improving market share in the foundation components of "Food, Fuel and Alcohol" and in reducing overheads. Sounds like good principles to running a business to me.  As always DYOR.


----------



## JTLP (26 February 2011)

nulla nulla said:


> Another buying opportunity yesterday, shortly after open, when the share traded arround $26.30 before working it's way up to $26.95 to close on $26.85.
> Response to the Report released seems fairly muted. The press release summary shows continued growth, reduction in costs, increased profits, increased earnings per share and increased dividends per share.
> 
> View attachment 41606
> ...




Hi Nulla Nulla,

As somebody in the industry - I can tell you now that the muted response to WOW's report is justified - both on an indirect level (floods etc) and direct level (competition).

Things are really heating up in the market place. Coles have lagged WOW for so long that their new strategy is to just bust bust bust suppliers for the lowest prices and drag consumers into their doors - no matter what the cost. If you look in any major category in the supermarket (say washing powder) you will see some very heavy discounts across the board - and not just on 1 or 2 brands.

Retailers do receive benefits for running these specials (they usually calculate part of the difference between the special and give it back to WOW) but this constant price warring won't help sales and the bottom line. 50% off running through catalogs weekly isn't sustainable - and with a new model Coles is moving to (PM if you want further info) sales will start to suffer as a result.

Just my


----------



## snowking (26 February 2011)

JTLP said:


> 50% off running through catalogs weekly isn't sustainable - and with a new model Coles is moving to (PM if you want further info) sales will start to suffer as a result.
> 
> Just my




Coles sales, Woolworths or both?


----------



## nulla nulla (27 February 2011)

JTLP said:


> Hi Nulla Nulla,
> 
> As somebody in the industry - I can tell you now that the muted response to WOW's report is justified - both on an indirect level (floods etc) and direct level (competition).
> 
> ...




For what it is worth and without trolling for an argument, I see Woolworths from the following perspective.

Woolworths has assets but the net tangible asset backing per share is very low as most of their locations are leased. The leases are very favorable as shopping centres like having cornerstone tenants that bring large numbers of customers in.

Woolworths also works it’s suppliers:
 In the fruit & veg industry they cut out the middle man and buy direct from the farmers. They have a reputation for pushing prices down and insisting that the quality of the product meets a high standard of quality and presentation.

In the meat sector they also buy product direct from the farmers and run the product through the abattoirs as a negotiated job lot (if they don’t already own the abattoirs). 

In respect of Alcohol, they own Hotels and Wine Shops, Dan Murphy’s, BWS, Langtons and now Cellermaster (mail order & online) and Wine Market (on line). Once again they buy in bulk and push the prices down.

In respect of Groceries, they push supplier prices down, charge for shelf space, probably insist on and charge for regular promoted discounts and have charge back deals for items that move too slowly and/or discontinued lines.

 In respect of fuel they own most of the previous caltex outlets and no doubt have stitched up a lucrative supply deal with Caltex. 

The point is they the supply across Australia on an incredibly large scale on a competitive basis. The report just out shows that they were able to offset tightening consumer spending over the last year by cost cutting and still post an increase in profit by 6%.

As to competition, they have proven that they are able to meet head on and survive challenges from:

Coles;
Aldi;
Metcash/IGA;
Franklins; and
Davids (Cambells Cash & Carry) (Gone?)

Costco’s is coming, so what. Costco’s is already in Melbourne and the feedback is that the prices are no better than the big chains “specials”. And the advantage of buying from Woolworths/Coles versus Costco is you don’t have to buy in bulk on the day and have massive storage space at home to store your groceries.

My previous posts in respect of Woolworths are relative to the regular trading opportunities that arise in the period between reporting and going exdiv. Even if you were a passive investor rather than a swing trader, Woolworths is still a standout with the franked annual div and a price that is only slightly higher than the low it hit at the bottom of the GFC. The market is driven by sentiment and at the moment Woolworths is not the market darling. But the market is fickle and Woolworths will be seen as an attractive opportunity again, one day.  . For now, trade the swings and lock in your profits.

As always Do Your Own Research.


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## tinhat (27 February 2011)

Don't know on which website I read it last night, but I read that this earnings accretive acquisition of $350 million for Cellermasters is for a business that generates revenue of $35 million p.a. I don't know what the profit margin is, but I can only assume that Woolies are looking for substantial synergies, improvements to buying power, etc., to justify that purchase price. Anyone have more info or opinion on this acquisition? It's got to get past the ACCC yet too.


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## nulla nulla (27 February 2011)

Inside Business (ABC 24) 5:30pm 27-02-2011. Woolworth GM. Solid and obviously planning ahead. Not about to roll over to any misplaced sentiment.


----------



## McCoy Pauley (27 February 2011)

nulla nulla said:


> Inside Business (ABC 24) 5:30pm 27-02-2011. Woolworth GM. Solid and obviously planning ahead. Not about to roll over to any misplaced sentiment.




Luscombe dodged some fairly direct questions from Kohler about his own plans in the next 12 months though.


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## nulla nulla (28 February 2011)

I thought he made it clear he was enjoying what he does and had no plans to change. It also appeared that he was not prepared to speculate on the prospect of any succession planning by James Strong and the rest of the board.

Personally I think that his performance, in what is a difficult period in retail, has been very good. If the board did decide that it was time to put someone "fresh" at the helm, they would do well to offer Luscombe a seat on the board. Be a shame to lose access to that level of experience and ability.


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## oldblue (28 February 2011)

Can't agree with that, nulla nulla.

Not a good idea to have a new CEO being second guessed by having his predecessor on the board!

I've no opinion on M Luscombe's effectiveness but if he's that good, keep him in his current job.


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## poverty (28 February 2011)

Got out this morning at 26.95 to top up on AUT.  Not regretting it so far!


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## JTLP (28 February 2011)

snowking said:


> Coles sales, Woolworths or both?




Personally I think both will be lower but Coles don't really care - they are all about gaining market share and foot traffic - that's why they will continually run these 'loss leaders' to drag feet through the door. Interestingly - supermarket loyalty is quite high.



nulla nulla said:


> For what it is worth and without trolling for an argument, I see Woolworths from the following perspective.
> 
> Woolworths has assets but the net tangible asset backing per share is very low as most of their locations are leased. The leases are very favorable as shopping centres like having cornerstone tenants that bring large numbers of customers in.
> 
> ...




Nulla I had a nice big comment but unfortunately accidently exited.

I have long admired your trading and commentary - so thank you 

To get back to the thread:

1. There is only so much cost cutting WOW can do to help bump the bottom line. Latest things such as the floods and NZ earthquakes won't help (but won't be a massive impact).

2. As mentioned before - Coles have a new plan that will be very effective in squeezing money from suppliers and bringing traffic through the door. I think it is due to come to fruition in April but things will be very cheap for consumers. 

Don't get me wrong - I would love to own one of the 2 someday. The big 2 supermarket chains get around 80c per dollar. That's pretty good odds.

Sorry about this shallow reply - I'm a bit annoyed about losing the original post!


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## nulla nulla (4 March 2011)

Closing on $27.38, a high for this week, wow has continued to gain ground after hitting recent lows of $26.27. Swing traders getting in at the nadir arround $26.30 are now $1.08 in front. There is still two weeks to go before the share goes exdiv and (in my opinion) there is a good likelihood that the dividend strippers will push the price up further. DYOR.


----------



## nulla nulla (20 March 2011)

Well I got that wrong. The finance fellow defected to Fosters and Japan had an earthquake, sunami and is now in the middle of an escalating nuclear meltdown. 

Must get a new crystal ball. I'm holding for the dividend and will hold for the required number of days to capitalise on the franking credit. I may have to hold a little bit longer for my trade profit but sometimes it is like playing a waiting game.

I expect wow to drop when it goes exdiv on Monday by the div and a franking credit component.  It will be interesting to see if any margin loan holders get flushed out and push it lower. DYOR


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## VSntchr (20 March 2011)

nulla nulla said:


> .... and will hold for the required number of days to capitalise on the franking credit.




Sorry, bit of a nooby with regards to tax...do you have to hold beyond the ex date in order to acquire the franking credits?


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## So_Cynical (20 March 2011)

VSntchr said:


> Sorry, bit of a nooby with regards to tax...do you have to hold beyond the ex date in order to acquire the franking credits?




If you received the dividend then you also get the franking credits.


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## YELNATS (20 March 2011)

So_Cynical said:


> If you received the dividend then you also get the franking credits.




Also be aware of the 45 day rule.

http://www.ato.gov.au/businesses/content.asp?doc=/content/18898.htm


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## skc (20 March 2011)

YELNATS said:


> Also be aware of the 45 day rule.
> 
> http://www.ato.gov.au/businesses/content.asp?doc=/content/18898.htm




45-day rule only applies if you claiming >$5K worth of franking credits.



nulla nulla said:


> Well I got that wrong. The finance fellow defected to Fosters and Japan had an earthquake, sunami and is now in the middle of an escalating nuclear meltdown.
> 
> Must get a new crystal ball. I'm holding for the dividend and will hold for the required number of days to capitalise on the franking credit. I may have to hold a little bit longer for my trade profit but sometimes it is like playing a waiting game.
> 
> I expect wow to drop when it goes exdiv on Monday by the div and a franking credit component.  It will be interesting to see if any margin loan holders get flushed out and push it lower. DYOR




The dividend drop off will definitely see the share price fall below the critical support level (where it is now). It's a head-and-shoulders pattern that has a target ~$24.2. Would not surprise me one bit if that is reached next month based on both technical and fundamental analysis (my post 194 on this thread).


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## nulla nulla (21 March 2011)

At the peak of the GFC Woolworths touched a low of $22.85. Since then the lowest price has been in the low $24.00's but the highest price has been $30.57.  The share price has pretty much moved sideways in a converging channel (chart attached is for 30 months).

I can't see the basis for the price to be so low. Woolworths continues to post increasing profits etc, however the market is driven by sentiment. Woolworths has been out of favour for a while and on top of going ex div, we have a nuclear disaster in Japan.

No idea where it will go from here. However, it should be remembered that the bulk of woolworths income is derived from food, alcohol and fuel. These things never go out of demand. I hold shares in wow, so do your own research.


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## fanger (21 March 2011)

skc said:


> 45-day rule only applies if you claiming >$5K worth of franking credits.




I didn't know that, I thought it was a general rule to apply to all trades regardless.


----------



## noirua (21 March 2011)

It's a bit of a game in the Woolworth sector and the UK is at present in a concerted trade war.
ASDA (part of WalMart) have laid down the gauntlet to their major rivals Tescos, Morrisons, Waitrose and Sainsburys. 
ASDA have said that they are 10% cheaper on all prducts (not including cigarrettes and tobacco) so you can go online and present your details and if ASDA are not 10% cheaper than all of the rest, then you can download a voucher to take off the cost of your next purchase. 
Since the rise of the AUD against the GBP, food prices have become very expensive in Australia in GBP terms and I think, emailing back home to WA, that something should be done about prices of food in Australia. Far to damn expensive - someones having a big joke against the average Aussie.
Wake up Coles and Woolworth, chop those prices by about 30%.


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## skc (21 March 2011)

Observe the war between Coles and Woolies and you see how WOW is on the defensive and reactionary position.

WOW has had to follow Coles in everything... cheaper milk, bring out Margret Fulton, and even similar ads and slogans.

Coles says 'Down Down Prices are Down' with big foam hand pointing down.

WOW comes out with 'Knock down prices' with big green boxing gloves.

They are under-cutting each other on price and that will hurt margin a fair bit over time. Since I don't hold either company I benefit from the cheap milk but not the destruction of shareholder value.

Look at SIP and API, the duopoly in wholesale drug distribution, and see how they ruined each other and the industry...(their share price charts tell the story).

At some point cooler heads will prevail. But I think the market is now pricing WOW at less of a premium to its peers because of this. (MTS is the most directly comparable peer imo).


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## snowking (21 March 2011)

the share price is actually holding up fairly well imo. dividend of 57cents and franking credit of about 24 cents would, in theory, imply a fall of about 81 cents. Only half that at the moment, maybe the market thinks WOW has been underperforming recently....


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## skc (21 March 2011)

snowking said:


> the share price is actually holding up fairly well imo. dividend of 57cents and franking credit of about 24 cents would, in theory, imply a fall of about 81 cents. Only half that at the moment, maybe the market thinks WOW has been underperforming recently....




Plenty of debat and research on value of franking credits overall..



> Are franking credits of value to the marginal shareholder
> – franking credits have no value post 1997 tax changes (Gray & Hall,
> 2006 and Cannavan et al. 2004)
> – franking credits are valuable (Lally, 2008 and Truong & Partington,
> 2008)




http://www.melbournecentre.com.au/F...f franking credit balances Richard Heaney.pdf


----------



## JTLP (21 March 2011)

skc said:


> Observe the war between Coles and Woolies and you see how WOW is on the defensive and reactionary position.
> 
> WOW has had to follow Coles in everything... cheaper milk, bring out Margret Fulton, and even similar ads and slogans.
> 
> ...




YES YES YES!!!

Thank you. As I've said it before - I'm on the other side of the fence (FMCG). All i've been hearing is that we have to start initiating price increases because the cost of raw materials has risen far too dramatically. 

Now this can be taken 2 ways by WOW and WES - accept the price increases from suppliers and pass onto their consumers OR accept price increases and continue this battle supreme.

It's quite obvious they are taking option 2 right now - as I've mentioned earlier Coles main priority isn't about profit and margins etc atm...it's about stealing market share from WOW at whatever cost - and they are doing this beautifully.

WOW is being too reactionary - and it's showing.


----------



## nulla nulla (26 March 2011)

Having gone exdiv at $26.40 woolworths closed the week on $26.10. I suspect that the reaction to the japanes crisis held the share price down before it went exdiv and now the market is starting to recover it is taking woolworths with it. Not sure how long it will last or how far it can go.


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## nulla nulla (28 March 2011)

Adele Ferguson writes an interesting article on the battle between Coles and Woolworths in todays (28/03/11) Business Day section of the Fairfax papers. Here is the link:

http://www.smh.com.au/business/proc...ermarket-giants-go-to-war-20110327-1cbva.html


The most poignant part being..



> ".....The brutal reality for Coles is it has an earnings before interest and tax (EBIT) to sales margin of 4.1 per cent, compared to more than 7 per cent for Woolworths. With Woolworths now responding to Coles' price attack on certain products, it is starting to get ugly. *Woolworths can afford it; Coles, less so.*
> This may not be an issue for the current management of Coles, many of whom came from Britain on short-term bonus incentives and who won't be around for the longer term havoc they have wreaked on the dairy, eggs or other industries. Coles' supermarket boss Ian McLeod stands to reap a bonus of around $38 million if he hits target through to 2013."..




The highlight is my work but it will be interesting to see which company suffers the most on the bottom line come next reporting season when the price war has run for a while. It will also be interesting to see what happens when the contracts expire for the Coles executives imported from overseas. DYOR and remember the market is driven by sentiment and prices often move in manners completely unrelated to worth. Disclaimer: I hold wow


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## nulla nulla (2 April 2011)

The market must be starting to see the value in the Woolworths trolley of business, food, alcohol & fuel. Nice action on the price this week. I have posted a two year chart for comparison. 

What i liked most is that the lows are getting higher and the highs higher as well. I expect wow to slowly push up to the $28.00+ mark, mind you there will be dips but I don't expect them to go below $26.00. 

DYOR, I hold wow so I am probably biased and/or optimistic.


----------



## nulla nulla (2 April 2011)

"Retailer up for the challenge" - Article in the Weekend Business section of the Sydney Morning Herald by Greg Hoffman from "The Itelligent Investor". 

http://www.smh.com.au/business/retailer-up-for-the-challenge-20110401-1crji.html

No mention as to whether he holds Woolworths shares or what price target he puts on Woolworths but a fairly balanced article none the less, supporting the article by Adele Ferguson earlier in the week.


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## ROE (2 April 2011)

nulla nulla said:


> "Retailer up for the challenge" - Article in the Weekend Business section of the Sydney Morning Herald by Greg Hoffman from "The Itelligent Investor".
> 
> http://www.smh.com.au/business/retailer-up-for-the-challenge-20110401-1crji.html
> 
> No mention as to whether he holds Woolworths shares or what price target he puts on Woolworths but a fairly balanced article none the less, supporting the article by Adele Ferguson earlier in the week.




That is what margin of safety are for 

you buy at  a discount to its intrinsic value and with that you some what covered on the down side  

You drive 5 tons truck over 10 tons load bridge just in case a naughty package loader put on an extra ton or two and you still make it over safely


----------



## nulla nulla (2 April 2011)

ROE said:


> That is what margin of safety are for
> 
> you buy at  a discount to its intrinsic value and with that you some what covered on the down side
> 
> You drive 5 tons truck over 10 tons load bridge just in case a naughty package loader put on an extra ton or two and you still make it over safely




I always drove across the bridge with 12 tons load on the basis that the sign had a built in safety margin. That is the bridge is really rated to 15 tons but they don't wont truckies driving across with 18 tonnes so the sign post it as a 10 ton load bearing bridge.

Not sure on the connection to Woolworths or my earlier post though?


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## tothemax6 (2 April 2011)

nulla nulla said:


> I always drove across the bridge with 12 tons load on the basis that the sign had a built in safety margin. That is the bridge is really rated to 15 tons but they don't wont truckies driving across with 18 tonnes so the sign post it as a 10 ton load bearing bridge.
> 
> Not sure on the connection to Woolworths or my earlier post though?



In fact they use factors of safety, where they mark the maximum load to a fraction of the actually failure load. The bridge could probably take 120 tons for all one knows. 

Question to WOW people, if commodity prices continue to rise, am I to assume that this will not actually hurt WOW margins, given that food is not really something people will cut down on?


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## nulla nulla (3 April 2011)

tothemax6 said:


> In fact they use factors of safety, where they mark the maximum load to a fraction of the actually failure load. The bridge could probably take 120 tons for all one knows.
> 
> Question to WOW people, if commodity prices continue to rise, am I to assume that this will not actually hurt WOW margins, given that food is not really something people will cut down on?




I gues the proof of the pudding is in the continuing increase in the profitiblilty of Woolworths year in and year out. During and since the global financial crisis peaked, Woolworths has continued to increase its' profits at a time other companies have not.

Food Alcohol and Fuel. You can tighten the belt on unnecessary spending but everyone has to eat: In tough times you eat out less and eat more at home; In tough times you buy your grog take away (the most price competitive bottle shop you can find like Dan Murphies or First Choice where they compete head to head) rather than at the pub; and in tough times you buy your fuel at the petrol station on the cheap price day using the discount voucher you got from Woolworths or Coles. 

Commodity prices (particularly Oil) have been rising for years and Woolworths continues to improve profitability.


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## boofhead (3 April 2011)

tothemax6 said:


> Question to WOW people, if commodity prices continue to rise, am I to assume that this will not actually hurt WOW margins, given that food is not really something people will cut down on?




In the last few months WOW have released a statement about expected food price inflation is going to be less than expected and that will hurt the bottom line. Coles may negate some postive profit impact rising prices have.


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## JTLP (4 April 2011)

Michael Luscombe out - a former shelf packer in.

I think it was widely known Luscombe would be stepping down - how do holders feel about it coming to fruition?


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## Julia (4 April 2011)

JTLP said:


> Michael Luscombe out - a former shelf packer in.
> 
> I think it was widely known Luscombe would be stepping down - how do holders feel about it coming to fruition?



I don't hold WOW at present but am always impressed by their succession planning.

As you say, Mr Luscombe's departure has been well forecast, so has been imo built into the SP.  I can't see any particular logic in the SP falling slightly today while WES rose.
In a week it will be meaningless.

WOW has an excellent history of choosing the right CEO's.

Just my opinion, but I think when this current price war on milk, bread etc, has all died down (and it will), Coles will not have won any long term converts, given the Australian public's desire to see farmers get a fair go.
If there's a backlash against Coles, it's no more than they deserve.


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## 9096848 (4 April 2011)

u r right, but it looks like wow is going to lose the discounting war with coles


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## nulla nulla (5 April 2011)

Julia said:


> I don't hold WOW at present but am always impressed by their succession planning.




I hold at the moment so I might be looking at wow from the hip pocket perspective.



> As you say, Mr Luscombe's departure has been well forecast, so has been imo built into the SP.  I can't see any particular logic in the SP falling slightly today while WES rose.




I thought the initial rise (as it happened) may have been due to the succession uncertainty being finalised. However my concern that the incumberant managing director would be hanging arround until October as a toothless tiger seemed to be reflected in the subsequent fall.



> In a week it will be meaningless.




I agree




> WOW has an excellent history of choosing the right CEO's.




Seems right however in this instance I think James Strong has fumbled the manner of passing the baton. 



> Just my opinion, but I think when this current price war on milk, bread etc, has all died down (and it will), Coles will not have won any long term converts, given the Australian public's desire to see farmers get a fair go.
> If there's a backlash against Coles, it's no more than they deserve.




I agree, as per previous articles, woolworths has the capacity to withstand competition. 



9096848 said:


> u r right, but it looks like wow is going to lose the discounting war with coles



 I think not. Woolworths has deeper pockets and can outlast Coles in a spending stand off.


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## nulla nulla (8 April 2011)

Woolworths has done well to hold $27.00 in todays close after what could only be called a difficult week. 
The Chairman decided to announce that the Managing Director's contract would not be renewed at the end of September 2011. Further his replacement would not be the 2IC but the 3IC. 
In one fell sweep Woolworths will lose not one but two experienced personel that have helped steer Woolworths through the GFC, competition from Coles and heaps of negative press.
Personally I think it is time that the Instutional Investors reviewed the performance of the chairman. Maybe Mr Strong would be stronger somewhere else.


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## nulla nulla (17 April 2011)

After dipping to $26.45 woolworths closed the week on $26.53. 

It would appear that the market isn't impressed with the transition of management leadership. An article in the fairfax papers late in the week pointed out the chalanges ahead for the new md and the share price turned south.

Seems woolworths have been linked to a potential purchase of further hotels to increase their pocker machine income. A move some analysts see as being a poor decision in light of the crack down on problem gambling and the need of the Gillard government to keep Wilkie happy. Maybe later when the dust settles or there is a change of government?

However, for now Woolworths still has significant market share in Food, Petrol, Alcohol and Gambling. Still sounds like they have the main bases covered (I don't smoke  ).


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## The_Snowman (17 April 2011)

Thanks for bringing to attention


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## nulla nulla (18 April 2011)

Analists were expecting growth of 3.5% so 3.2% was "a little short of their expectations". However Woolworths remains on target to achieve the amended forecast of profit growth between 5% - 8%.

Seems the market liked the report. Of course tomorrow the analysts will have had time to work the figures over and sprook their messages...gloom & doom...or sunshine and lollipops. I can hardly wait.


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## nulla nulla (20 April 2011)

Looks like the analists sprooked a message of gloom and doom and "The Snowmans" short is in the money. Today Wesfarmers release their Coles report. 

Might watch for another re-entry point.


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## nulla nulla (21 April 2011)

A couple of interesting articles in todays Fairfax Business section:

http://www.smh.com.au/business/cole...lies-but-target-kmart-lag-20110420-1dov5.html

Some contradictions though..

"THE Coles-generated price war continues to win sales for the supermarket chain against arch rival Woolworths but the downturn in consumer spending is hurting its mini-department stores, Target and Kmart, their owner, Wesfarmers, disclosed yesterday."

....and then in the next paragraph....

"Their respective figures also suggested the big two were winning market share from smaller competitors."

And there in lies the reality of their market dominance. In the present financial crisis where consumers are extracting more value for their spending they are buying from coles and/or woolworths at the expence of the smaller retailers, particularly for Food, Alcohol and Fuel.

Both are growing, neither is taking market share off the other. 

http://news.smh.com.au/breaking-new...lworths-cellarmasters-bid-20110421-1dpjj.html

Woolworths continues to consolidate and grow.

http://www.smh.com.au/business/coles-all-smiles-in-some-aisles-20110420-1doxd.html

Woolworths bounced today and I would not be surprised to see it go further ahead next week.


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## oxygen (26 April 2011)

Was interested to hear on YMYC on Thursday one of the guys from Team Invest recommended WOW as one of 2 stocks to buy for the longterm (other was QBE). He said EPS is growing while we have price deflation which bodes very well for the return or price inflation on food.


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## notabclearning (26 April 2011)

Make no mistake Woolworths current share price will be a long memory in five years. Its purely a great company and will continue to deliver great earnings.


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## oxygen (26 April 2011)

notabclearning said:


> Make no mistake Woolworths current share price will be a long memory in five years. Its purely a great company and will continue to deliver great earnings.




And why is that?


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## nulla nulla (29 April 2011)

notabclearning said:


> Make no mistake Woolworths current share price will be a long memory in five years. Its purely a great company and will continue to deliver great earnings.




But it keeps getting worse. And I thought wow was a defensive stock everyone turned to when the xao had a retrace. Looks like everyone else forgot to read the script.

Nice to see it bounce off the interday low of $26.23 to close on $26.51 but would love to understand why it (and WES) took such a shellacking this week?


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## nulla nulla (26 August 2011)

The recent sell off with the European and U.S.A sovereign debt fiasco/collapse took the wow share price down to lows not seen since the gfc. The recovery was just as quick as the sell off. Then the share price started to inch up in the period leading up to the release of the final profit report for twelve months ending 30 June 2011. 




This is the part I don't understand. The share price improves in the lead up to the release of the report. Then when the report is released the analysts jump all over it:
"It is at the bottom end of expectations";
"It is less than expected";
"The forecasts are not high enough"; and
"And Coles is oh so much better".
Then the price gets slammed. Some wally puts a sell on it; the cfd shorters put a sell on it; the hedge funds borrowing shares put a sell on it; and after it has sold down a fair whack, the margin loan holders sell it down a bit more to adjust their leverage or exit their holding never to return. 

It is becoming predictable. Why buy before the report, wait for the sell off then buy. 

I have a "three day" rule. When the report is so-so but there is an apparent over-reaction, wait for the third day and buy in for the bounce. It doesn't always work, sometimes the share keeps falling. However, on average, this rule has served me well in the past. With advances in technology I find these days that you may need to be prepared to jump in after two days. I could be wrong, I often am  however I jumped in today at $25.25.

This is not a recommendation, do your own research and be responsible for your own decisions. These are tough times to trade and our markets can go south on the hint of a greek default or no Q3 or a hurricane or earthquake etc etc. 

But think of this. The dividend coming up is $0.65 per share fully franked. Franking at 30% means this is worth, say, another $0.20. Total value $0.85. If the market is right and the present value of wow is $25.23 (todays close) then the share should realistically drop to $24.38 after it goes ex-div.

Now look at the chart for the last 3 years then ask yourself, do you really see wow being worth the same now as it was at the bottom of the gfc. If the answer is yes, then don't buy it. If however you have read the profit reports for the last few years and you see, year after year, woolworths not only make a profit but increase the profit over and above the previous year then it must occur to you that they are doing something right. Increased sales, increased profits, increased earnings per share and increased dividends. And yet the market goes "Not good enough, sell".




Sometime you have to wonder if the analysts are working hand in glove with the hedge funds. Negative press, sell the share price down, accumulate then sell into the bounce making profit on both legs of the journey. Gotta laugh. The share price may drop further but I'm looking for a run up between now and the ex-div date. DYOR and good luck


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## Bill M (26 August 2011)

nulla nulla said:


> I have a "three day" rule. When the report is so-so but there is an apparent over-reaction, wait for the third day and buy in for the bounce. It doesn't always work, sometimes the share keeps falling. However, on average, this rule has served me well in the past. With advances in technology I find these days that you may need to be prepared to jump in after two days. I could be wrong, I often am  however I jumped in today at $25.25.



Hi nulla, WOW is firmly on my watch list, top company in my opinion. I think your 3 day rule might work, QBE sort of went the same way. The only thing holding me back as a dividend investor is that the dividend is not quite high enough, only 4.5% FF. I can buy an ETF (with much less risk than a 1 company risk) that pays the same divi of around 4.5%. Having said that I really like WOW, if it drops below $25 on Monday then I might buy some as then the divi is nearing 5% FF. This is a good company and todays prices weren't bad, good luck to all holders.


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## ROE (26 August 2011)

Bill M said:


> Hi nulla, WOW is firmly on my watch list, top company in my opinion. I think your 3 day rule might work, QBE sort of went the same way. The only thing holding me back as a dividend investor is that the dividend is not quite high enough, only 4.5% FF. I can buy an ETF (with much less risk than a 1 company risk) that pays the same divi of around 4.5%. Having said that I really like WOW, if it drops below $25 on Monday then I might buy some as then the divi is nearing 5% FF. This is a good company and todays prices weren't bad, good luck to all holders.




I wouldn't buy WOW at $25, expensive as, it doesn't deserve this premium considering going forward, its cash flow will be impacted by the resurrection of Coles and an all out price war with Bunnings and people like Costco, Aldi snip around the edges

I buy under $20 and not a cent more  when it get to $20 I may have to re-valuate before I jump in


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## Tysonboss1 (26 August 2011)

ROE said:


> I wouldn't buy WOW at $25, expensive as, it doesn't deserve this premium considering going forward, its cash flow will be impacted by the resurrection of Coles and an all out price war with Bunnings and people like Costco, Aldi snip around the edges
> 
> I buy under $20 and not a cent more  when it get to $20 I may have to re-valuate before I jump in




I have thought that for 10years lol

Each time I think the are over valued, they pull a new business divsion out of the hat like a magic rabbit, and a new stream of profit growth follows.

Not saying this is what will happen with the Hardware, But it just might.

I'm not at all worried about Aldi or Costco or a price war with bunnings,

Disclaimer - I do not hold WOW, Would consider a selling a put if the strike was low enough though.


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## notting (26 August 2011)

I think the hardware thing is pretty stupid.
It's like they are chasing Wesfarmers instead of being way  ahead of them to begin with.
Not so good for HVN though that they are going to persue white goods as part of it IMO.


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## Tysonboss1 (26 August 2011)

notting said:


> I think the hardware thing is pretty stupid.
> It's like they are chasing Wesfarmers instead of being way  ahead of them to begin with.
> Not so good for HVN though that they are going to persue white goods as part of it IMO.




I guess it depends on the format, and whether they can turn it into another business unit the produces durable cashflows.


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## So_Cynical (27 August 2011)

Bill M said:


> Hi nulla, WOW is firmly on my watch list, top company in my opinion. I think your 3 day rule might work, QBE sort of went the same way. The only thing holding me back as a dividend investor is that the dividend is not quite high enough,* only 4.5% FF*. I can buy an ETF (with much less risk than a 1 company risk) that pays the same divi of around 4.5%. Having said that I really like WOW, if it drops below $25 on Monday then I might buy some as then the divi is nearing 5% FF. This is a good company and todays prices weren't bad, good luck to all holders.




I've just freed up a large chunk of money (see MRE thread) and feel WOW is screaming "buy me" but cant help but notice the dividend is somewhat woeful  Bill do you have any capital "at risk" ?


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## Tysonboss1 (27 August 2011)

So_Cynical said:


> I've just freed up a large chunk of money (see MRE thread) and feel WOW is screaming "buy me" but cant help but notice the dividend is somewhat woeful  Bill do you have any capital "at risk" ?




The over all profit they make per share is more important than the dividend per share. If I am the owner of a good business with plenty of expansion options and they made a $1000 profit, I would not mind them only paying out $500 in dividend and having them reinvest the other $500 earning perhaps 25%.


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## Bill M (27 August 2011)

So_Cynical said:


> Bill do you have any capital "at risk" ?



My whole darn portfolio is at risk, the only thing that is risk free right now is cash in the bank but unfortunately that won't pay the bills. But I know what you mean, WOW is not a company I would be worried about going broke.


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## oldblue (27 August 2011)

Certainly not worried about WOW going broke. But the SP is back to where it was four years ago, the yield is only so-so, and the growth appears to have settled back to lower levels.

I admire WOW as a well run company with a strong position in its sector but it doesn't appeal as a Buy at present.


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## ROE (27 August 2011)

Tysonboss1 said:


> I have thought that for 10years lol
> 
> Each time I think the are over valued, they pull a new business divsion out of the hat like a magic rabbit, and a new stream of profit growth follows.
> 
> ...




still wont buy above $20  that is my analysis 
dismissive your competitor could be a big mistake, especially the good one...

Costco is debt FREE and very well managed company with Charlie Munger mix, Coles is a well managed company now
how much debt woolie rack up in recent year to keep up the earning, the time will come where debt becomes a burden 

I tell you soon a story I uncover where Woolie is worry about Costco


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## nulla nulla (30 August 2011)

Woolworths probably welcomes costco finaly coming to Australia. The "shrinkage" appears to have moved from Woolworths to somewhere else, especially the "shrinkage to order".


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## nulla nulla (1 September 2011)

Sold the $25.25 parcel today at $25.72. Didn't like the re-testing this week of the $25.07 bottom after tapping mid $25.60's and when todays xao started to pull back I figured it was a good idea to take some profit in case we had another sell off. Looks like there are still a lot of investors willing to sell into any sort of bounce. 

Also the media and the market may have to allow the Hardware start-up some settling in time.  If tonight is a downer internationaly we are likely to have a down day tomorrow. The usual Friday sell off after 2:00pm could provide a re-entry. Will re-enter if there is any sort of decent retrace to $25.30 or lower.  (Still hold 2 parcels).


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## notting (1 September 2011)

That's funny.
I averaged in some more today around 25.35. Thinking there will be some excitement about the new hardware thing!
WES did a bit of a fear drop with good volume.  Maybe they felt the same as me! Nervous about competition.
If the markets week tomorrow, you't think WOW would be stronger given it's cum dividend and a defensive!
It will be interesting to see if the stores are really appealing to women.  They look pretty intimidating on that level to me!
I should have shorted WES and made it a pair!  Stupid cow!


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## nulla nulla (1 September 2011)

notting said:


> That's funny.
> I averaged in some more today around 25.35. Thinking there will be some excitement about the new hardware thing!
> WES did a bit of a fear drop with good volume.  Maybe they felt the same as me! Nervous about competition.
> If the markets week tomorrow, you't think WOW would be stronger given it's cum dividend and a defensive!
> ...




WOW traded today between $25.74 (high) and  $25.42 (low). Is your average $25.35? (todays purchase in this range with a lower purchase earlier in the week?) 

The press about the hardware stores has been a little negative, in that the rollout and opening of stores may take longer than expected. I suspect this has influenced some investors to hold back. Accordingly the bounce after the negative report has been minimal. 

The share is currently cum-div and there is a week or so of trading left before it goes ex-div. Could be some room for further dips before it climbs in the run-up to going exdiv.


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## notting (1 September 2011)

nulla nulla said:


> WOW traded today between $25.74 (high) and  $25.42 (low). Is your average $25.35? (todays purchase in this range with a lower purchase earlier in the week?)



Yep picked up some yesterday too.

I thought the press has been quite charitable with regard to the big opening!
I'm probably not going to be in it for long but if I am that will be fine.
I felt it might get a bit of a wave up to it's dividend.
I'm not expecting dips unless there is a general tank. 
I'd say flat at worst then a little nasty after that if markets are skittish around pay day!


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## nulla nulla (2 September 2011)

notting said:


> Yep picked up some yesterday too.
> 
> I thought the press has been quite charitable with regard to the big opening!
> I'm probably not going to be in it for long but if I am that will be fine.
> ...




The following is a link to The Sydney Morning Herald Business Day article "Has Woolworths lost its' WOW?" Scott Phillips 01 September 2011.

http://www.smh.com.au/business/has-woolies-lost-its-wow-20110901-1jnpa.html

Fairly neutral overview, the past is the past and the future is looking tough. However he does make the point that Woolies keeps on keeping on growing and making bigger profits year after year. Current price levels could be as good as it's going to get?

Then again the djia and the dax were down overnight. Also the u.s.a. is expecting poor job figures tonight so there could be further downside comming. I will be looking for re-entry prices today.


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## nulla nulla (2 September 2011)

nulla nulla said:


> Sold the $25.25 parcel today at $25.72. Didn't like the re-testing this week of the $25.07 bottom after tapping mid $25.60's and when todays xao started to pull back I figured it was a good idea to take some profit in case we had another sell off. Looks like there are still a lot of investors willing to sell into any sort of bounce.
> 
> Also the media and the market may have to allow the Hardware start-up some settling in time.  If tonight is a downer internationaly we are likely to have a down day tomorrow. The usual Friday sell off after 2:00pm could provide a re-entry. Will re-enter if there is any sort of decent retrace to $25.30 or lower.  (Still hold 2 parcels).




Got sick of waiting and took a parcel at $25.27. Imediately after I bought, the share price broke through the $25.26 support and dropped down to $25.18. Thankfully there was enought support in the auction to lift the closing price to $25.25. 

No doubt the u.s.a will be down on their employment figures tonight (the djia futures was down earlier) however I am looking for the weekend papers to be full of articles about the relentless growth of Woolworths and Market dominance, defensive stock in tough times etc etc and fire up the dividend strippers to push the price back up before it goes ex-div.  as always do your own research.


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## Chasero (3 September 2011)

I bought some Wow shares.

I'm expecting it to drift between 24.20 to 25.70 this week before hitting highs of low to mid 26.

Hopefully it'll peak before the ex div date. Then I'll decide whether to hold or sell.

The ~5% dividend is too safe a purchase to pass up for most investors using the dividend capture strategy.


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## Garpal Gumnut (9 September 2011)

WOW look in a bit of strife fundamentally.

Mrs Gumnut now buys most of our vittals from Coles.

This article suggests that Bunnings will win out in the hardware.



> Mr Errington said over the past six years, Woolworths has spent $13 billion on investing activities or $2.17 billion per year. In terms of money spent on investing activities over depreciation, Woolworths has spent on average $1.48 billion per year.
> Advertisement: Story continues below
> He said this high investment spend came at a time that it was making a risky move into the highly competitive hardware space
> 
> ...


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## nulla nulla (9 September 2011)

Aparently the Home Hardware market in Australia is so big and profitable the Woolworths doesnt have to dominate it to make a profit. All it has to do is capture a viable portion of it. Track record suggests it will recoup its investment and turn a profit from this area also.

However the market certainly paid out on Woolworths today with the massive push down before close and in the auction. $25.38 with a fully franked $0.65c dividend included suggests that WOW will get sold down to roughly $24.58 on Monday when it goes exdiv. You would think we were at the bottom of the gfc.

We took the profit on another parcel early this morning at $25.55 but held 3 more parcels for the div and a longer term capital gain. Might be holding for a while. If the share price goes over sold I will look for more trade opportunities. We live in strange times.


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## RandR (10 September 2011)

Garpal Gumnut said:


> WOW look in a bit of strife fundamentally.
> 
> Mrs Gumnut now buys most of our vittals from Coles.
> 
> ...


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## nulla nulla (14 September 2011)

When the herd turns against a stock it can get sold off like it has the plague. WOW is testing three to four year lows despite posting increased profits year in year out. 





On its recent performance, you have to wonder if it is going to retest the lowest point in 4 years at $22.85. That is only $1.25 from the low point of the last few days.


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## nulla nulla (27 September 2011)

Opened at $25.00 and for a few seconds it looked like wow was going to rally, then it fell to $24.68 and struggled to recover to anywhere near the opening price.

IMO there were two obstacles: The first was an article in todays papers business section about the $400+ million outlay to set up the hardware stores; and the second was the irrational exuberance of the previous "defensive buyers" selling out thinking it is safe to go back to more speculative shares.

They'll be back.


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## Chasero (28 September 2011)

nulla nulla said:


> Opened at $25.00 and for a few seconds it looked like wow was going to rally, then it fell to $24.68 and struggled to recover to anywhere near the opening price.
> 
> IMO there were two obstacles: The first was an article in todays papers business section about the $400+ million outlay to set up the hardware stores; and the second was the irrational exuberance of the previous "defensive buyers" selling out thinking it is safe to go back to more speculative shares.
> 
> They'll be back.




A lot of people I know have sold WOW and switched to WES.

Short term everyone's thinking Bunnings and Coles are miles ahead of Masters and wool. I'm still holding on though.


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## silence (29 September 2011)

In my local coles store I have often heard customers say they hadn't realised how much coles has changed since they had to come there instead of woolworths for a change, and that they had changed to shopping only at coles and hadn't looked back. I think there is a lot of momentum behind coles and it has several years of great growth ahead. And that's pretty much being stolen from woolworths. So one is probably heading up and the other down..



Disclaimer: While I work at coles I have heard these sort of comments in passing, not particularly in connection with my job. Other customers will have also heard the comments so I assume this isn't 'inside information'. I also hold WES shares.


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## nulla nulla (29 September 2011)

silence said:


> In my local coles store I have often heard customers say they hadn't realised how much coles has changed since they had to come there instead of woolworths for a change, and that they had changed to shopping only at coles and hadn't looked back. I think there is a lot of momentum behind coles and it has several years of great growth ahead. And that's pretty much being stolen from woolworths. So one is probably heading up and the other down..
> 
> 
> 
> Disclaimer: While I work at coles I have heard these sort of comments in passing, not particularly in connection with my job. Other customers will have also heard the comments so I assume this isn't 'inside information'. I also hold WES shares.




The Annual Reports released by both companies show that both companies are continuing to gain market share, which is apparently at the expense of the likes of Metcash, Aldi, IGA and independants.


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## matty77 (18 October 2011)

Can someone please explain "Notes II" to be? Is this just a fancy name for another share offer?



> Offer Summary
> 
> On 18 October 2011, Woolworths Limited (Woolworths) announced an offer (Offer) of dated, unsecured, subordinated, cumulative notes (Woolworths Notes II or Notes). The Offer is made under the Prospectus lodged with ASIC on 18 October 2011 (Prospectus).
> 
> ...


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## ROE (18 October 2011)

matty77 said:


> Can someone please explain "Notes II" to be? Is this just a fancy name for another share offer?




Another form of capital raising, WES aggressive push on its food stable is hurting
and fighting the market leaders in Hardware isn't cheap.


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## ROE (18 October 2011)

silence said:


> In my local coles store I have often heard customers say they hadn't realised how much coles has changed since they had to come there instead of woolworths for a change, and that they had changed to shopping only at coles and hadn't looked back. I think there is a lot of momentum behind coles and it has several years of great growth ahead. And that's pretty much being stolen from woolworths. So one is probably heading up and the other down..
> 
> 
> 
> Disclaimer: While I work at coles I have heard these sort of comments in passing, not particularly in connection with my job. Other customers will have also heard the comments so I assume this isn't 'inside information'. I also hold WES shares.




I used to hate Coles but that change in the last 15 months, I now mostly shop at Coles, I also like WOW as a business but that also change when I saw what WES is doing to Coles 

so I refuse to pay premium for WOW at that time the stock is around 26-28 bucks
two years later $24-$25 buck, another year or two $20-22 

below $20 I will seriously look else no go


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## huachuma (22 October 2011)

I live in Europe (Balkans)and I have wow for more than 10 years.  I am only building my holding hopping that it will provide a very good dividend income for my retirement.  These days, we are having a good opportunity to buy wow with very high div.yield, but many others shares would provide the same benefits, I guess.

 Can someone explain why wow was buying out shares, last year, spending around 700 mil (if i remember) and paying around $27 per share and now they are truing to get cash at very costly price by issuing notes?
  Is that just to obtain a better rating from agencies witch are becoming increasingly discredited these days (at least that is how it looks to bi here in Europe). 
I can not see the logic. 


(Sorry for my English, I am not from English speaking background)


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## nulla nulla (24 October 2011)

Woolworths is due to report on their sales this week. Coles sales were up 8% on last year and Woolworths is not expected to be up as high due to Woolies have a higher turnover than Coles to begin with. No doubt if it comes in under market expectations, the share price will get slapped down again. 

Interesting comment by the boss of Wesfarmers in an article in Fridays paper about the impact the Woolies hardware stores "Masters" are having on the local Bunnings stores when they open in the same area. Bunnings stores are experiencing a drop in sales. Wesfarmers not only has to contend with the competition coming from Woolies but the revitalisation of Mitre 10 hardware stores is making life difficult for Bunnings as well.

Go  Woolies. I haven't got the circular in respect of the notes issue yet but will certainly give it a good read when I do get it.


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## Ves (27 October 2011)

Looks like the result was towards the upper range of what they expected for the 2011-12 year. It's not startling growth by any means, but it's stable.

I am looking at picking up some WOW as way of providing a growing income stream for the future... unsure to wait to see if the price stabilises or retraces even further and offers a better yield on cost. Still kicking myself that I didn't pick up ANZ and WBC any where under $19.50 whilst I had the chance.


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## Julia (27 October 2011)

Ves said:


> Still kicking myself that I didn't pick up ANZ and WBC any where under $19.50 whilst I had the chance.



 If you wait a bit, Ves, when the world wakes up to the fact that the European solution isn't in fact a solution, you could well have the chance to pick these up at that price again.


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## Ves (28 October 2011)

Julia said:


> If you wait a bit, Ves, when the world wakes up to the fact that the European solution isn't in fact a solution, you could well have the chance to pick these up at that price again.



Here's hoping. As Buffett said, you don't need to swing until you find the right pitch. If profits increase the current prices may well be attractive too.


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## ROE (28 October 2011)

$20 here it come you don't have to wait for too long ...

Coles catching up
Heavy Capital expenditure start up masters and the Jury is still out on this one
Borrow more and more each year to keep up the earning....

they are caught between a rock and a hard place ... Borrow more to keep up the earning
or face stagnant growth or going backward but the more you rack up in debt it comes to
a point where increase debt wont increase earning but becomes a burden...

Like all good stories it eventually comes to an end and WOW cant command the premium like it used to in its young day.

Plus WOW earning is also mask by its Pokies earning, if the new Pokie laws come in effect WOW got a perfect storm hit it from all directions....

Still think this stock deserve a premium, not in my book..


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## nulla nulla (29 October 2011)

Here is a link to an article by Nathan Bell of Inteligent Investor in respect of the pro's and cons of the Woolworths Notes II versus the ANZ Notes recently issued.

http://www.theage.com.au/money/woolies-delivers-a-security-winner-20111028-1mnvr.html

They are expect to be redeemed after 5 years. If not the margin will increase by a further 1% and could run until 2036. I'm sure I read that the notes will trade on the asx but this may need to be checked. 

Looks like a good combo interest paid quarterly, for those looking to lock in for longer periods.


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## nulla nulla (29 October 2011)

ROE said:


> $20 here it come you don't have to wait for too long ...
> 
> Coles catching up




Actualy if you compare the 1st Quarter 2012 Retails Sales Results for Wesfarmers with that of Woolworths (year on year with 2011) you will see that Wesfarmers had growth of $602 million versus Woolworths growth of $661 million. If Coles was catching up the growth of Woolworths would be less not greater.



> Like all good stories it eventually comes to an end and WOW cant command the premium like it used to in its young day.




If you compare the financial statistics of both companies (in this instance from WebIress as at close of business Thursday 27/10/11) you would note the following:

Share Price:  wes $32.66,   wow $24.08
Earnings per share: wes $1.667,  wow $1.736  
Price to Earnings: wes  19.6,  wow 13.87
Divs per Share:  wes $1.50, wow $1.22
Yield:  wes 4.59%,  wow 5.07%

Of the two companies, Woolworths has the higher Earnings per Share and the higher yield (Also Woolworths is fully franked, I admit I don't know if Wesfarmers is fully or partialy franked).

If any of the shares is trading at a premium I suspect it is actualy Wesfarmers.




> Plus WOW earning is also mask by its Pokies earning, if the new Pokie laws come in effect WOW got a perfect storm hit it from all directions....




Both companies own Hotels, hotels have poker machines. Both companies will be impacted by the changes to poker machine law if and when it gets passed through parliament. Knowing the "addicts", they will find ways to get arround the restrictions if they become law.



> Still think this stock deserve a premium, not in my book..




As pointed out above wow is not trading at a premium when compared to wes. If anything the close on friday 28/10/11 of $23.83 makes the yield and price earnings even more favourable. The biggest competion for return with the share price is actualy the proposed notes issue. The margin of 3.25% added to the bank bill rate of 4.75% gives a yield of 8% (no franking credits though).

IMO wow is currently over sold. Currently at a level below the GFC nadir of March 2009 and still increasing turnover, Earnings per share and Dividends per share, year on year. Woolworths is a more attractive long term investment (for those that like long term investments) than Wesfarmers. 

Has Wesfarmers paid back the loan they took to buy coles yet? How long do you think it will be before "Masters" starts to eat into the "Bunnings" turnover and margins?


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## ROE (1 November 2011)

nulla nulla said:


> Actualy if you compare the 1st Quarter 2012 Retails Sales Results for Wesfarmers with that of Woolworths (year on year with 2011) you will see that Wesfarmers had growth of $602 million versus Woolworths growth of $661 million. If Coles was catching up the growth of Woolworths would be less not greater.
> 
> 
> 
> ...




I'm not saying WES is a better business, I think WOW is a better business but 
WES was a very very good business before it bought Coles.. Coles pretty much bring WES from a superb business to a mediocre business 

Having over paid for Coles there isn't much they can do but to improve on the business
and get better return for their shareholder money....

I'm just pointing out what competition and other factors play against WOW premium status .... Given enough time I think WES under the current team can beat WOW in my analysis of its business.

WES management is very good, I was a skeptic of Goyder but he has proven me wrong ...if you know WES long history they are a survivor and they can go from crap to top dog and that what they doing to Coles.

Here is a brief history on WES if you dont know...they used to be in rural and farming business you can tell by the name and some of the legacy business it still has .... under Chaney he see there is no money in this type of business
he start branching out in Retails and Bunnings was born.  Bunning is a cash cow machines and that given them ammunition to buy officeworks and other business and make incredible margin and profit..Officeworks now also a cash cow machine ... 

Goyder is heavy influence by Chaney direction and hence he bought Coles ....Once Coles turn around complete it will be another Cash Cow to buy more and they have come full circles and becomes Australia power house in retail 

WOW is at the top of their game, they either can maintain the earning or going backward very hard for them to grow like they used to..

WES on the other hand has Coles badly manage for years, now in the process of turning it around, they cant go lower but can only goes up.

Plus WES other business are on fire, Officeworks and Bunnings

where WOW has the trouble child Dick Smith and for many years now they cant turn
it around ....and I dont think they can ... JBH, Good Guys, HVN will make sure they stay there.

On that basis there is no way I pay WOW the premium, the risk to down side is way more than upside.


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## ROE (1 November 2011)

I also add people can argue WOW Masters cut into WES Bunnings but that to me like WOW take on massive debt, capital expenditure buying in another business...

wouldn't that be the same line as WES takes on Coles in 2007? maybe at a lesser premium 

but WOW dont have the cash flow to start up Masters, they have to go into debt and it would takes many years before you see reasonable return on capital for Masters so I reckon WOW is in a sense in weaker position than WES moving forward.

I dont have WES shares and I pretty much crossed them off on my list the day they bought Coles so I dont even contemplate buying them  I want WOW but at much cheaper price ...some day I may want WES but not now

I was going to buy SUL, I was waiting for some figures but thank god I didnt hahaha .... they bought the rebel dog  I post on hotcopper a bit 
so SUL is also off the list


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## robusta (1 November 2011)

Agree with you re WOW, WES & SUL, there should be some good opportunities in the retail space but I am having trouble finding anything to buy. Maybe ORL, RFG or MTS. MLC is on my watch list but I would like to see some decent results before I buy.


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## Muschu (1 November 2011)

Ves said:


> Here's hoping. As Buffett said, you don't need to swing until you find the right pitch. If profits increase the current prices may well be attractive too.




I suspect that one reality is that ASF is not the font of all knowledge.  To each his own.


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## tinhat (2 November 2011)

robusta said:


> Agree with you re WOW, WES & SUL, there should be some good opportunities in the retail space but I am having trouble finding anything to buy. Maybe ORL, RFG or MTS. MLC is on my watch list but I would like to see some decent results before I buy.




You might want to do your own research into RCG, although it is only a small cap, it is offering a yield of 6% at current prices and has had a solid EPS growth over recent years.


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## robusta (2 November 2011)

WOW hit a 52 week low today, I agree with ROE however it needs to drop another 10-15% before I get interested.


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## Ves (2 November 2011)

robusta said:


> WOW hit a 52 week low today, I agree with ROE however it needs to drop another 10-15% before I get interested.



Can tech-a or someone else proficient in Elliot Wave give a medium to longer term view of price action for WOW? The trend is clearly down, an infant can see that, but it would nice to have a technical view and / or some price targets to keep in mind.


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## tinhat (3 November 2011)

Ves said:


> Can tech-a or someone else proficient in Elliot Wave give a medium to longer term view of price action for WOW? The trend is clearly down, an infant can see that, but it would nice to have a technical view and / or some price targets to keep in mind.




I think the better question to ask is where is Woolworths in the corporate life-cycle? Slowing earnings and profit growth and now rising debt. Cash cow for a while if you are a risk averse, volatility averse yield taker (SMSF in pension phase). I'm tossing over the hybrid offer currently going. I don't think I will take it on my gut feeling, and our multi-generation SMSF needs an income stream because the majority of its capital is required to fund pensions.

Where is the next catalyst for earnings growth going to come from? Masters? That's lots of capital expenditure looking for a medium term pay-off. Personally, I think Woolworths missed an opportunity with not rolling out Dan Murphy's more aggressively. They could have done more there and in my local area, they have let WES play catch-up with their First Choice offering.

I've been selling down our WOW holding this year. WOW is not on my short list, but looking at the price it might come onto a trader's short list for being undersold (but then aren't most ASX 200 stocks in the same boat?). WOW is not on my short list as a medium term dividend paying stock.


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## ROE (3 November 2011)

tinhat said:


> You might want to do your own research into RCG, although it is only a small cap, it is offering a yield of 6% at current prices and has had a solid EPS growth over recent years.




I know about RCG, earning look good but very risky stocks ...they are on high margin business without vertical integration, anyone can do it... on the way up look great, on the way down it accelerates very fast...
I seen a few of these before...

I know people gone in there try out shoes, get the size went on-line get the same one 40% cheaper ...this trend wont slow down 

I'm more happy with ORL ..luxury, high margin, vertical integrated ..pretty hard for someone to copy and 
under cut your price...


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## nulla nulla (6 November 2011)

For the last two years wow has been trading in a sideways channel between $25.50 and $29.00. The volitilty appears most apparent in the lead up to reporting and again in the lead up to the share going exdiv. The share price appers to improve in the runup to the release of the report, then gets slapped back down, then it usualy improves again in the leadup to going exdiv, then drops after it goes exdiv (usualy by the amount of the div and franking). For some reason wow is concistantly panned for coming in under analyst expectations. Comparisons are made with the retail performance of Wesfarmers Coles divisions and Woolworths is panned. 

This panning induced volitility is almost predictable and you have to wonder if the analyst/brokers/media are not working hand in glove to create shorting opportunities followed by long opportunities. The reality is: Woolworths continues to increase market share; continues to increase profit; and continues to lift dividends. This is all the more remarkable when you consider objectively the tough financial times we are currently living in.





Since July 2011 Woolworths has taken on a new downward channel. The only basis I can think of to understand this recent increased bearishness is that an element of doubt/caution has snuck in to the assessment of Woolworths future. The market could have reservations about the Change of Management; the move into Home Hardware through Masters; and the increase in debt levels run by Woolworths to cover the initial setup and operations of Masters.




The Woolworths Balance Sheet and Profit and Loss demonstrates that they are paying dividends out of profits, not borrowings. Further their debt levels are not astronomical and they are continuing to review the finance costs of the debt as the recent issues of notes demonstrates. Their venture into Masters with a joint venture partner has been well thought out, costed and is progressing through the acquisition of sites, construction of stores, sourcing product from suppliers and the opening of some stores.

Where the first Masters stores have opened in proximity to Bunnings stores, the Bunnings store have experience an immediate drop in sales. No doubt with the passage of time, Masters will complete their rollout and take market share from Bunnings and Mitre10. I also expect (because this is a very lucrative business area in Australia) that the Masters stores will contribute to the Woolworths bottom line. 

In my opinion this leaves the change of management as a key factor in the recent downtrend. Personally, I find it hard to understand Mr Strong's decision to retire Mr Luscombe and replace him with Mr O'Brien. The old adage "If it isn't broken, don't fix it" comes to mind. Even more so after reading through the Annual Report for 2011 when you compare the back grounds of messers Luscombe and O'Brien. Maybe is was an "age" thing and Mr Strong felt the need to trade up to a newer model. 

If it was an "age" or "best before (insert date)" thing, after looking at the age of the Directors in the report, maybe it is time to bring in some fresh blood on the bord as well. 

Mr O'Brien is going to have to work hard to convince the media and the shareholders that his leadership will bring even better results than those achieved by Mr Luscombe. Meanwhile, in my opinion, the share price at these levels is good value. If it can break out of the recent bearish channel (upward) the share price should return to the realistic levels of $25.00 - $27.00. Time will tell.

As always do your own research and don't take any notice of my ramblings.


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## nulla nulla (12 November 2011)

Woolworths broke above the top of the recent downward channel line but stalled arround $24.90 on Wednesday and Friday. It needs to break above $25.00 then move above $25.60 to be convincing.




It wouldn't surprise me if brokers were to re-assess their positions in the near future and decide Woolworths has more upside than the current price (probably on the basis that retail is improving in the lead up to xmas). I can't see them being able to push it down much further (probably have to wait until January 2012 and take the position that xmas sales were lower than expected). As always, ignore my inane ramblings and dyor.


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## noirua (12 November 2011)

I have kept my Woolworth stock for a few years now and intend to sit on them. They have been hit by the Coles revival but I expect them to gradually claw back Cole's gains. The divi remains over 5% and helps as an investment for those who want increasing fully franked dividends.

Favorite forum vote is at: http://www.thebull.com.au/the_stockies/forums.html


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## Tysonboss1 (12 November 2011)

Wow is not one a following closely , but when you say they have been hit by Coles revival I are you saying you can notice it in their reported profit or sales volumes, or are you just blaming the rest share price activity on that,


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## Ves (12 November 2011)

Can someone provide some figures that Coles are actually gaining market share from Woolies? Or is Coles market share gain from other competitors in the same supermarket space? I'm really unsure how to tell at this point...


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## noirua (13 November 2011)

This link gives an impression that Coles have won the day of late: http://www.businessspectator.com.au...k-Smith-pd20111102-N872N?OpenDocument&src=rab





Opportunity to vote for your favourite forum at: http://www.thebull.com.au/the_stockies/forums.html


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## nulla nulla (13 November 2011)

Ves said:


> Can someone provide some figures that Coles are actually gaining market share from Woolies? Or is Coles market share gain from other competitors in the same supermarket space? I'm really unsure how to tell at this point...




The anual reports for Wesfarmers and Woolworths both point to increased sales and increased profits. They both appear to be gaining market share from the minor competitors. Woolworths increased slightly more in dollar value but the Coles increase represented a higher percentage gain on previous year.


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## poverty (13 November 2011)

Coles you could say are making the easy gains right now because they are starting from a much lower base of market share, sales $$ and profits $$ than woolworths.  Let's see if they can keep it up once their overall numbers are a lot higher.


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## JTLP (13 November 2011)

The once great juggernaut that is WOW has begun to slow...whether this is a short term blip on the radar or a longer term thing you have to consider.

Something of note is that if you look at management makeup of the big 2 - you can see that they are flying in international experience from the UK (Tesco types) to make the models more competitive. 

You'll notice that Coles has begun to expand its offering in a unique way (MIX clothing or whatever it is) which is very UK styled.

WOW is playing catch up and basically mirroring every move Coles makes at the moment. They were once the move makers...now they follow


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## noirua (14 November 2011)

JTLP said:


> The once great juggernaut that is WOW has begun to slow...whether this is a short term blip on the radar or a longer term thing you have to consider.
> 
> Something of note is that if you look at management makeup of the big 2 - you can see that they are flying in international experience from the UK (Tesco types) to make the models more competitive.
> 
> ...




WOW may well have to advance to cover most things as Tesco in the UK has. They have their own bank and are due to start opening branches in the future. All Tesco large stores are open 24hrs except Sunday (6 hours) and I believe will move to open always when a new law goes through the UK Parliament. 
Woolworth Bank may one day have a branch in your town.


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## nulla nulla (26 November 2011)

nulla nulla said:


> Woolworths broke above the top of the recent downward channel line but stalled arround $24.90 on Wednesday and Friday. It needs to break above $25.00 then move above $25.60 to be convincing.
> 
> It wouldn't surprise me if brokers were to re-assess their positions in the near future and decide Woolworths has more upside than the current price (probably on the basis that retail is improving in the lead up to xmas). I can't see them being able to push it down much further (probably have to wait until January 2012 and take the position that xmas sales were lower than expected). As always, ignore my inane ramblings and dyor.




It is a good thing everyone ignores my inane ramblings. The share price got the staggers and fell back into the downward channel. Hard to work out if it fell because O'Brien appeared to put a gloomy forecast on what lies ahead (at the AGM) or if the fall was relative to the rest of the XAO. To some extent it is possible the fall was reduced by share holders switching out of more volitile stocks into wow as a "safer" share for these volitile times.





Personally I think it was O'Brien's comments on what lies ahead combined with Mr Strong trying to imflict a nickname of "Penguin" on O'Brien because he comes from Penguin Tasmania.  Bloody pathetic.


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## Tyler Durden (26 November 2011)

Ves said:


> Can someone provide some figures that Coles are actually gaining market share from Woolies? Or is Coles market share gain from other competitors in the same supermarket space? I'm really unsure how to tell at this point...




Perhaps not the most technical way, but go into both Woolies and Coles and see which one you'd rather buy at. I always end up at Coles because the things I need are cheaper, and they have greater specials. I've also noticed more people at Coles than Woolies in the city.


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## Ves (26 November 2011)

Tyler Durden said:


> Perhaps not the most technical way, but go into both Woolies and Coles and see which one you'd rather buy at. I always end up at Coles because the things I need are cheaper, and they have greater specials. I've also noticed more people at Coles than Woolies in the city.



My partner and her mother are long-term Woolies customers; but I've always been a mix of both. Moreso Woolies these days, but I drop into Coles occasionally. I honestly haven't noticed too much difference between the store appearances, perhaps there really isn't much in Brisbane to separate them. I'm not big on stacking up on discretionary items such as chocolate, chips, soft drinks though... perhaps that's where the difference lies.

Still waiting for the Woolies share price to regress furher. Below the GFC lows would be lovely at some time next year.


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## nulla nulla (9 December 2011)

Against all expectations Woolworths rallied this week closing on $25.61 (after tapping $25.85 interday). Fairly significant when you consider where the rest of the market trended. 




Historically, for the last couple of years, woolworths has rallied up in the December / January period. Whether Woolworths is in the middle of this years rally or has done its' dash remains to be seen. 




Personally I think there is more to come. Very strong finishes the last three days, I wouldn't be surprised if Woolworths staggers toward $27.00. Then again....dyor


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## nulla nulla (16 December 2011)

While the rest of the market was tanking and other shares were testing lower channel levels Woolworths has been a stand out this week. Initialy holding firm early in the week arround the $25.68 mark, Woolworths then poked above $26.00 to tap $26.35 arround Wednesday and close on $26.26 today. 




That $27.00 level is looking more and more possible in the runup to Christmas/ Early January, but then again Europe could collapse and the down hill slalom could start all over again. DYOR and good luck.


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## nulla nulla (21 January 2012)

Well Europe didn't quite collapse although there is plenty of talk about GFC2, but it does look like the retail sector has taken a hit on xmas sales being less than hoped for. Combine this with the disappearance of thousands of Australian jobs and the message about the Australian 2 speed economy is well and truly starting to hit home.

WOW broke through the lower channel support line and is now moving sideways and down. The Sales up-date is scheduled for 31 January 2012 and it is unlikely to be good. This will probably spook another sell down between the Sales update and the Annual Report. Watch to see if it can hold above previous support levels.


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## notting (21 January 2012)

Hopefully it's just being conscientious and filling that little gap which it tried to do before but failed!
Then again the Tool shed thing's a bit scary and the Dick Smith thing was always retarded.  The pokies thing is just about finalized.  Even online Alcohol deals are causing the old long termer to stagger.  
Bit there to be mulled over whilst eating home brand sandwiches.
It's not as clear cut as it used to be.


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## Tyler Durden (23 January 2012)

Interesting view from a poster at HC:



> Peak volume sales of Christmas are over.
> 189 Dick Smith stores closing; and an attempt to migrate most of that arm to online sales (how many zillions will go on consultancy fees for that little stroke of getting-in-ahead-of-the-pack genius?).
> WOW looks like it's heading sub $23 before you can write out a directors $5 million productivity bonus cheque.
> WES looks like contiuing to outpoint WOW in the immediate future.
> ...


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## McLovin (24 January 2012)

Something I noticed when I did a bit of research on WOW was the decline in revenue/$ of PP&E.

I guess they're just not getting out of their stores what they used to...
	

		
			
		

		
	




The takeaway being that they will need to make a larger fixed asset investment for each additional $ of spending.


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## ROE (24 January 2012)

Tyler Durden said:


> Interesting view from a poster at HC:




That was an article in AFR regarding WOW review of Dickies and they could get rid of Dickie all together but they cant afford the write down so they caught between a rock and a hard place, so slowly closing down stores over time is probably the only option..


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## skc (24 January 2012)

McLovin said:


> Something I noticed when I did a bit of research on WOW was the decline in revenue/$ of PP&E.
> 
> I guess they're just not getting out of their stores what they used to...
> 
> ...




Interesting ratio. I don't know what makes up PP&E but is there property revaluation component that affects that number?

May be something like revenue uplift / annual capex would give a different/better picture?


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## McLovin (24 January 2012)

skc said:


> Interesting ratio. I don't know what makes up PP&E but is there property revaluation component that affects that number?




No, property is held at the lower of cost and recoverable value.

I compared that number to a few other supermarket chains around the world and WOW was, and still is, able to extract more revenue than most of its peers. Walmart, for instance, is down around the $4 mark.



skc said:


> May be something like revenue uplift / annual capex would give a different/better picture?






> 4.27,	2.56,	1.52,	1.20,	1.14




Those are the numbers for the 5 years to 2011. Not much better.


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## skc (24 January 2012)

McLovin said:


> No, property is held at the lower of cost and recoverable value.
> 
> I compared that number to a few other supermarket chains around the world and WOW was, and still is, able to extract more revenue than most of its peers. Walmart, for instance, is down around the $4 mark.
> 
> ...




Thanks. When I say better picture I meant "more accurate" picture.

I think the numbers you quoted do better reflect the situation... i.e. worse than what rev/PP&E suggests.


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## McLovin (24 January 2012)

skc said:


> Thanks. When I say better picture I meant "more accurate" picture.
> 
> I think the numbers you quoted do better reflect the situation... i.e. worse than what rev/PP&E suggests.




At the last FY report they said that they expected declining CAPEX over the next few years. It will be interesting to see how they can meet the markets, albeit diminishing, growth expectations and reduce CAPEX given the above.


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## Tyler Durden (29 January 2012)

> Woolworths has drawn flack for linking drinking and driving by offering deep discount petrol vouchers to people who double their alcohol purchases.
> 
> The supermarket chain, which is a major player in both the bottle shop and service station markets, is offering a 30 cents a litre petrol discount coupon to buyers who buy two cases of beer or pre-mix cans of spirits. The discount is being offered on top of the usual 4c a litre discount for grocery purchases.
> 
> But the Australian Automobile Association (AAA), usually a champion of a better deal for motorists, has drawn the line at the heavy petrol discounts, labelling it "irresponsible".




http://smh.drive.com.au/motor-news/...-30c-alcoholfuel-discount-20120127-1ql58.html

Responsibility issue aside, I wonder how successful this will be.


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## nulla nulla (29 January 2012)

Tyler Durden said:


> http://smh.drive.com.au/motor-news/...-30c-alcoholfuel-discount-20120127-1ql58.html
> 
> Responsibility issue aside, I wonder how successful this will be.




I didn't like their choice of Beers/Mixers (and pricing) so I let it slide.


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## Tyler Durden (30 January 2012)

> Woolworths bolstered its board today with the appointment of three new non-executive directors including David Mackay, the former president and chief executive of US snack food giant Kellogg's.
> 
> But He is not the only new director with retail experience. Fellow appointee Christine Cross, retired from British supermarket group Tescos in 2003 and runs her own retail advisory firm.
> 
> ...




http://www.smh.com.au/business/woolies-bolsters-board-with-new-directors-20120130-1qowg.html

Looks like the expected bad news tomorrow outweighed the new hirings, as WOW fell 1.29% today.


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## snowking (31 January 2012)

the market seems to like the results after they announced half year sales of $29.7 billion or a 5.0% increase on last year, up just over 2% at the moment.

I think the announcement regarding the divestment of the dick smith stores is also a positive. In my opinion so many of the goods found in DSE are readily available online and does one really need to go and look at a lot of the goods before buying? I don't. 

Also, the market seems extremely cautious of the move into hardware even though Bunnings holds only 20% market share. Based on many analysts and observers comments you would think bunnings was a monopoly that could not be touched. If Masters can gain market share from the other 80% then there is great potential for growth. I have heard very positive things from people going to the new store in Melbourne, with many commenting prices are lower and there is a greater selection of products. 
The partnership with Lowe's is also underestimated, Lowe's know their stuff and have been extremely successful in the US so if they have any input then I am sure Woolworths will pleasantly surprise going forward


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## Smurf1976 (31 January 2012)

snowking said:


> tI think the announcement regarding the divestment of the dick smith stores is also a positive. In my opinion so many of the goods found in DSE are readily available online and does one really need to go and look at a lot of the goods before buying? I don't.



DSE has been doomed ever since it stopped being an electronics store and became simply a retailer of consumer appliances as it is today.

For those not old enough to remember, DSE used to be what Jaycar is today and that's how Dick made his money out of it. I doubt you could even buy a roll of solder there today - it's a shop that sells phones and TV's, not an "electronics" store as such.


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## qldfrog (31 January 2012)

Smurf1976 said:


> DSE has been doomed ever since it stopped being an electronics store and became simply a retailer of consumer appliances as it is today.
> 
> For those not old enough to remember, DSE used to be what Jaycar is today and that's how Dick made his money out of it. I doubt you could even buy a roll of solder there today - it's a shop that sells phones and TV's, not an "electronics" store as such.



 I have to agree, any battery a bit unusual, no more transistor/resistor/capacitor, they are like a cheap harvey norman or retravision store
Can not for the hell of me understand what the management thought..doomed to failure indeed yet there is a niche market there that jaycar took


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## Smurf1976 (31 January 2012)

qldfrog said:


> I have to agree, any battery a bit unusual, no more transistor/resistor/capacitor, they are like a cheap harvey norman or retravision store
> Can not for the hell of me understand what the management thought..doomed to failure indeed yet there is a niche market there that jaycar took



Direct competitors to part or all of Dick Smith Electronics' business as it is today:

Harvey Norman, Myer, David Jones, K-Mart, Big W, Target, Retravision, JB Hi-Fi, Good Guys, every mobile phone retailer including Telstra and the other big companies, every computer shop from small one man operators to the large companies, every overseas equivalent of these retailers who ships internationally, numerous sellers on Ebay.

Direct competitors to Dick Smith Electronics as it was 20 years ago:

None as such. Jaycar was then a small operation and not a national chain. The only other significant national operator was Tandy, which did sell some actual electronics but was focused primarily on selling its own house brand consumer items (particularly audio systems, kids toys, landline phones, computers etc - all under their own house brands). DSE then was what Jaycar is now, and Tandy was half way in between. Both used to produce annual catalogues, with DSE's filled largely with technical data and components whilst Tandy's was filled with assorted gadgets, hi-fi systems and the like. Tandy used to literally give away batteries once a month in order to get people into their stores. 

Then came the big changes. DSE went head to head with other retailers and left the actual electronic components business to Jaycar. Meanwhile Tandy disappeared altogether, having been gobbled up by Woolworths and merged into DSE.

Why anyone would want to relinquish a virtual monopoly on a small but adequate niche market in order to go head to head with so many big name retailers I just don't know. Jaycar seems to have filled the gap quite well however.


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## McLovin (1 February 2012)

Dick Smith is the same as Radio Shack in the US. There was a time when hobby electronics was big (I remember having a CB radio when I was in year 7, then I discovered girls!). Technology more or less killed off hobby electronics; why build what you can buy for cheaper. Radio Shack now survives on selling phone contracts, DSE will probably too, eventually.

On the positive side, the DSE website is actually very good (pricewise and layout). They must have huge overheads because of the large store network but they still compare well with online only retailers. As a stand alone business with the right owner they could probably have a very successful online business with maybe a few showroom stores (not the 390 they have now).


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## nulla nulla (18 February 2012)

Woolworths is due to report on 1 March 2012. It will be interesting to see how they are fairing in comparison with Wesfarmers. It will also be interesting to see how the share price performs in the next few weeks. 

In the past there has been a share price rally in anticipation of the results (in the lead up to the release) only to see the price slapped down after the release (when the results failed to meet analyst expectations), followed by another rally in the lead up to going exdiv, followed by another dive on the day before it went exdiv. 





Try trading the volitility, too fickle to consider buying and holding imo.


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## notting (18 February 2012)

Thanks i'll look to short it if it has rallied in anticipation.


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## McCoy Pauley (27 February 2012)

My wife and I had a very poor experience with Big W on the weekend, which I hope does not reflect on the management of WOW, but if it does, management needs to be changed ASAP, otherwise the company will be easily overtaken by WES and other competitors in the future.

My wife purchased a Kindle for me for my birthday. Unfortunately, the Kindle stopped working after a couple of weeks, so we decided to return it to the place of purchase for an exchange or a refund. We put the Kindle back in its original packaging and made sure we brought the receipt with us.

Imagine how surprised we were when Big W initially refused to take back the Kindle and refund our money, saying that it was Amazon's problem and Big W was not an agent for Amazon.  They also claimed that my wife would have been told this when she purchased the Kindle.  My wife, an honest and truthful person (we must set an example for our children) adamantly denied that she was told this, and there was no written notice anywhere in the store, including where the Kindles are displayed, advising potential customers that Big W would refuse a refund and that customers would need to deal with Amazon.

Now, I hope that Big W's lawyers have advised their client that this contravenes the Competition and Consumer Act and is misleading and deceptive conduct.

We did eventually obtain a refund out of Big W, but only because we complained to the store manager.  We acquired a replacement Kindle (better model, as well) directly from Amazon at a cheaper price than offered by Big W and Dick Smith.


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## poverty (27 February 2012)

As a shareholder I'm disgusted that you were provided with a refund.


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## Tysonboss1 (27 February 2012)

McCoy Pauley said:


> My wife and I had a very poor experience with Big W on the weekend, which I hope does not reflect on the management of WOW, but if it does, management needs to be changed ASAP, otherwise the company will be easily overtaken by WES and other competitors in the future.
> 
> My wife purchased a Kindle for me for my birthday. Unfortunately, the Kindle stopped working after a couple of weeks, so we decided to return it to the place of purchase for an exchange or a refund. We put the Kindle back in its original packaging and made sure we brought the receipt with us.
> 
> ...




It is not Big W's fault, they are just following orders from the manufacturer,

Alot of manufacturers only allow on the spot replacement for items that are "DOB" meaning "dead out of box". 

if the item works but becomes defective at a later date during the warranty period they often want you to return the item to them for inspection before replacement.

As a retailer I have been bitten by this before.

A customer brought in an item worth about $400, about 8 months after they have bought it from me, they made a bit of a seen when I said they have to take it to the manufacturer service centre which was about 10kms away, So gave them a new one and I took it there myself, 7 days later I was told that the fault was caused by the user and no warranty claim would be given, So I lost out.

Remember for faulty goods there are 3 options,

Refund
replacement or
repair

and the Retailer gets to choose which one he wants to do, not the customer.

Only in the case of the good being not as described, wrongly supplied or DOB does the customer have the right to an automatic refund.


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## investorpaul (27 February 2012)

You ALWAYS have to argue to get a fair outcome these days regardless or product, retailer or manufacturer.

I bought a new laptop and within one month it was constantly freezing and crashing when operating on the battery (not on the power cord). 

I contacted customer service of the manufacturer and went through the usual stupid questions. Is the battery plugged in? yes, if you hit the power button what happens? etc etc etc

They said I would have to send it in and they would look at it. The process would take 6 weeks and if it was found that I had damaged it I would pay the cost. I use my lap top for business so this definately was not an option.

I hung up and phoned back, obviously getting another person, got angry and demanded a refund. They sent me a slip to fill out, I took it down to JB HiFi (where it was originally purchased) to get a replacement. They didnt have the same one in stock so discounted a newer model to price match.

Problem solved.


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## McLovin (27 February 2012)

If Big W are the importer then they are the manufacturer. They are not legally allowed to pass the buck to a foreign entity. AFAIK, Amazon don't have an Australian operation.

David Jones are still the winners in this area. I remember my Dad buying a pen at DJ's (Mont Blanc iirc), anyway the pen broke and the ink ruined his shirt (which was not a cheap shirt). He went into DJ's, they replaced the pen and then asked how much the shirt cost and gave him cash for that amount. No quibbling over wanting to see reciepts for shirts etc. That's customer service.


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## Tysonboss1 (27 February 2012)

McCoy Pauley said:


> We acquired a replacement Kindle (better model, as well) directly from Amazon at a cheaper price than offered by Big W and Dick Smith.




Whats amazon.com's warranty procedure. 

If you bought a faulty product from amazon directly are you able to get a replacement or refund on the spot as you expected from BigW.


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## McLovin (27 February 2012)

Tysonboss1 said:


> Whats amazon.com's warranty procedure.
> 
> If you bought a faulty product from amazon directly are you able to get a replacement or refund on the spot as you expected from BigW.




Amazon.com's warrant procedure is not relevant. The goods were purchased in Australia so are protected by Australian consumer law. The importer of the Kindle into Australia is considered the manufacturer of the product.


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## McCoy Pauley (27 February 2012)

poverty said:


> As a shareholder I'm disgusted that you were provided with a refund.




Heheh.

McLovin is correct, Big W as the importer is treated by the Australian Consumer Law as the manufacturer for the purpose of warranties and conditions in relation to the sale of goods to consumers.

Big W's response to attempt to pass the buck to Amazon is not permitted under the ACL and to then engage in a "he said/she said" about what might or might not have been said at the POS is laughable.

To top it off, I then read an article in the Weekend AFR quoting their CEO at a lunch speech saying that retailers need to stop whinging about the impact of the internet on their business model but find innovative ways to lift customer service.  Not a great start, IMO.

In answer to your question, Tysonboss, I believe that Amazon refund or replace within the warranty period no questions asked, so long as you have proof of purchase.  But again, as my wife purchased the product from Big W, it's only fair and reasonable to expect that Big W to refund the purchase price on a faulty product.

In relation to your first post on the issue, Tysonboss, Big W refused to refund our money or to replace the model.  That's not permitted under Australian Consumer Law.  I'm well aware that the retailer has the right to choose which remedy to give to the consumer, but the retailer must provide one of those remedies to the consumer.

investorpaul - JBH responded in the manner in which I would have thought Big W would respond to a customer returning a product that clearly does not work as it should.


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## Tysonboss1 (27 February 2012)

McLovin said:


> Amazon.com's warrant procedure is not relevant. The goods were purchased in Australia so are protected by Australian consumer law. The importer of the Kindle into Australia is considered the manufacturer of the product.




What I am saying is that he was saying is glad he managed to get one online,

What I am saying is that should he be unlucky enough to get a faulty one through that channel he will have a much harder time than he did from BigW.

Thats the hidden cost of online shopping, the cheaper price you get is not a risk free saving, often when the wrong goods or faulty goods are shipped or parcels are lost you have to suffer through alot of hassel and cost to rectify the situation.

I had a customer walk out of my store over a $6 price difference with a hong kong based online retailer, As murphey would have it the customer came back in 4 weeks later with a faulty product and asked if she could exchange it at my store since I retailed the same product.

My answer was offcourse no, she would have to mail it back to hong kong. she ended up buying a new one from me and throwing the other in the trash.


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## lurker123 (27 February 2012)

The majority of customers have no idea about their rights and responsibilities regarding returning products. Mainly because consumer protection laws are vague which benefits lawyers. In the end its up to a court case to decide who was right and who is wrong.

You get people that think just because the supermarkets don't care and give a refund straight away because they are mainly selling items under $10 so it saves time and gives better customer relations, or places with 7 days no questions asked refund policies, that they are automatically entitled a refund no matter what. With their over inflated ego's they think they are automatically entitled a refund even when they make a wrong decision. Giving something simplistic as a example if you choose to buy a red shirt and come back the next day and say you want a refund because you want a blue shirt instead or you found another place selling the same shirt cheaper. The retailer has a right to refuse refund. However because most transactions are more complex and because these people have big ego's they think they are automatically entitled a refund. Obviously most shops won't care and just refund and repackage the shirt in this instance but regardless the customer with the over inflated ego is wrong.

On the other end of the spectrum you get people who are pushovers and accept anything a retailer says regarding returns. This is also incorrect because the customer service staff and managers are not lawyers and often don't have proper knowledge of the laws themselves. The laws are so vague and the situations that can arise are so complex that in truth it takes a court case to know who is right and who is wrong.

A example to outline how vague consumer protection laws are. I purchased a usb stick with 8 years warranty from a online retailer, it failed 2 years down the track. This particular retailer had a office you can pickup from. I went back to the office to request they send it for warranty for me. Note that i requested it be sent for warranty, not a refund, as obviously having used it for 2 years requesting a refund is only done by people with big ego's since its obviously unreasonable. They refused and told me to contact the manufacturer directly. I then contacted the office of fair trading, since I didn't want to deal with the overseas manufacturer directly. From my telephone conversations with fair trading it became apparent to me that the retailer MAY have the right to request I deal with the manufacturer. I was not very happy since the retailer advertised the warranty for the usb prominently on their website and still had the item listed for sale even after 2 years. In fact they actually sold the usb under 2 prices. They sold it cheaper with the normal warranty and they sold it slightly more for the same item with longer warranty. Needless to say i bought the usb with the longer warranty and that is why I wasn't happy. In the end fair trading contacted the retailer and gave me some more numbers to contact in case I needed to progress to a court case. Anyway the retailer contacted me and agreed to send the usb for warranty and I got a replacement 6 weeks later. However the retailer had the right to refuse and it potentially would need a court case for a resolution. Obviously if it went to that stage I would have not bothered and dealt with the manufacturer directly.

What most people don't realize is that customer relations is a added cost to products. The cost of taking back items that can't be resold needs to be recouped by raising the price of all products. Yes there are a lot of legitimate claims, however there are also lots of claims by bad customers with big ego's. In the end good customers subsidize bad customers. 

In the end online retailers win out. They don't have to hire customer service staff reducing a large chunk of costs and they don't waste the same amount of time dealing with returns. Often the person buying online has done better research on what they are buying + return shipping costs mean that they are less likely to return items. Online retailers also don't need to waste 1/2hr or 1hr of a employees time arguing with a bad customer.

Customers are also misguided about buying online. They believe that because sales staff provide bad service they may as well have bought a item online for cheaper. Often time buying online can give bad customer service as well. It can even be more restrictive when dealing with returns. At least with a store front you can go somewhere to complain. As a example one of my friends bought a tv box from overseas, he bought it with the purpose of connecting a xbox to it. In the specifications there was vague references to connecting a xbox, however its unclear whether it would take the xbox as input or output. Well after receiving the item, it didn't do what my friend wanted it to do. So he contacted the overseas online retailer for a refund, after some back and forth, the retailer said they would refund the cost if he sent the item back. The problem is that sending the item back would incur a substantial delivery fee making it not worth it to send back. We tried to get the retailer to cover the delivery fee, no luck there. My friend made the mistake of not paying for the item through paypal, if he paid through paypal i'm sure he would have ended up with a better outcome. As it stood he now has a item that doesn't do what he wanted. 

Anyway this topic is more related to customer service which means it may be better served in the other thread in this forum about customer service.


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## McCoy Pauley (27 February 2012)

We have become sidetracked from the point of this thread.

I posted an account of my experience with Big W only as an anecdote about customer service as I think it reflects on management and, IMO, management influences the future direction of a company's share price.

I don't want to extrapolate my experience into the manner in which WOW treats its customers, but as it also appears that Dick Smith has the same policy on Kindles (we were advised this by the Big W salespeople we talked to yesterday), for me, it's a red flag about some of management's policies in dealing with customers.

I would certainly be reluctant to buy anything through WOW at the moment.


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## poverty (27 February 2012)

McCoy Pauley said:


> I would certainly be reluctant to buy anything through WOW at the moment.




REALLY?  Not even a packet of cornflakes?  Jeeze there's some weird people out there LOL!  Get over yourself.


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## notting (27 February 2012)

McLovin said:


> That's customer service.



DJS has always had great customer service, however, last time I went in there I couldn't find any one to serve me!
It was OK though.  
I just got a pair of black pants and a white shirt off the shelf put them on and went behind the counter and took off all the security tags myself.  Served a few people  then walked out with my stuff. 
It was a really good deal!
I can't for the life of me see why the share price has suffered so much. Perhaps people can't afford the petrol prices to get there?:dunno:


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## nulla nulla (28 February 2012)

Two good articles in the Sydney Morning Herald today in regard problems Coles is having in the Hotel/Liquor sector as against how well Woolworths is going in this area. Woolworths is due to report this week. Could be good for a leg up in the runup to going exdiv.

As always do your own research.


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## McLovin (28 February 2012)

nulla nulla said:


> Two good articles in the Sydney Morning Herald today in regard problems Coles is having in the Hotel/Liquor sector as against how well Woolworths is going in this area. Woolworths is due to report this week. Could be good for a leg up in the runup to going exdiv.
> 
> As always do your own research.




Coles and Woolworths should avail themselves of the prisoners' dilemma. They would both benefit from not competing with eachother. If they do go all out, then shareholders will see lower returns, especially those in Metcash.


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## McCoy Pauley (29 February 2012)

poverty said:


> REALLY?  Not even a packet of cornflakes?  Jeeze there's some weird people out there LOL!  Get over yourself.




Actually, yes.  My impression is that Coles are on the whole cheaper than Woolworths.  I always come out of Woolworths feeling like I've spent much more on the same basket of goods than I do out of Coles.  Given that both Coles and Woolworths are in the shopping centre I prefer, and I have another Coles 5 minutes away from where I live, there's no reason for me to go to Woolworths now.

As a shareholder, I'd be asking questions about what steps WOW is taking to combat the increasing competitive pressure being exerted by a number of different factors, such as WES, online retail, etc.

Luckily I do not hold WOW shares.


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## nulla nulla (19 March 2012)

Woolworths went ex-div today and dropped $0.64. I half expected it to drop by arround $0.80 allowing for the div and franking credit.





It will be interesting to see whether wow can continue upward and sideways from here or whether the recent improvement was only due to investors buying in for the div.


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## nulla nulla (1 April 2012)

Stellar performance by Woolworths this month. $24.95 on 6 March then ran up to $25.67 before going ex-div fully franked at $0.59. Fell back to $24.77 after going exdiv (div and franking) then rallied through the last week to tap $26.10 before closing out the month at $25.98.




A quick return of over 6% in 22 days for anyone trading the Div, Franking credit and Capital Gain. It will be interesting to see whether wow drifts down in the recent channel or breaks out above $26.10 in the next few weeks.


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## tinhat (1 April 2012)

nulla nulla said:


> A quick return of over 6% in 22 days for anyone trading the Div, Franking credit and Capital Gain.




Except that you can't claim a franking credit on a stock you only hold for 22 days.


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## Chasero (1 April 2012)

tinhat said:


> Except that you can't claim a franking credit on a stock you only hold for 22 days.




how come?


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## McLovin (1 April 2012)

Chasero said:


> how come?




45 day rule. Iirc, the shares also have to be at risk for the full period. That second point is often overlooked.


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## nulla nulla (1 April 2012)

tinhat said:


> Except that you can't claim a franking credit on a stock you only hold for 22 days.




Yes I can. If the total of all franking credits is less than $5,000 in a given fiscal year, the 45 day rule does not apply. This comes in very handy with jointly held shares as the threshold becomes less than $10,000 in franking credits,  the income is split and the individual benefit is less than $5,000 each.

Additionaly, when the total of all the franking credits is more than $5,000 the 45 day rule is 45 days clear between the buy date and the sell date, effectively 47 days.


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## tinhat (1 April 2012)

nulla nulla said:


> Yes I can. If the total of all franking credits is less than $5,000 in a given fiscal year, the 45 day rule does not apply.




I didn't know this. I will seek to confirm this (not that I don't trust anonymous people from the internet). If that is so, then the franking credits from my personal portfolio would be under this threshold. How does the threshold apply to a SMSF with several members but pooled funds?


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## blue0810 (1 April 2012)

Just in case  some info (page 7):
http://www.ato.gov.au/content/downloads/IND00270245N26320611.pdf


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## nulla nulla (2 April 2012)

tinhat said:


> ..... How does the threshold apply to a SMSF with several members but pooled funds?




Where the total franking credits for all the smsf members combined is less than $5,000.00, the 45 day rule does not apply. Where the total franking credits for all the smsf members combined is greater than $5,000.00 the 45 day rule applies as the smsf is taxed as a single entity (only one tax return filed).


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## tinhat (2 April 2012)

nulla nulla said:


> Where the total franking credits for all the smsf members combined is less than $5,000.00, the 45 day rule does not apply. Where the total franking credits for all the smsf members combined is greater than $5,000.00 the 45 day rule applies as the smsf is taxed as a single entity (only one tax return filed).




Thanks for the reply.


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## notting (20 April 2012)

Finding it hard to comprehend why WOW would quote some uncertainty going forward on the basis of the impact of the carbon tax as one of the uncertain factors!!  
Surely they don't really believe that!
Has the great management lost it's marbles or just clutching for excuses?


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## clinta44 (20 April 2012)

notting said:


> Finding it hard to comprehend why WOW would quote some uncertainty going forward on the basis of the impact of the carbon tax as one of the uncertain factors!! Surely they don't really believe that! Has the great management lost it's marbles or just clutching for excuses?




For those who haven't seen the statement read "we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates.”" 

I read the statement slightly different to you Notting. I thought it ment the business is more worried about whether or not the carbon tax and interest rates will affect consumer spending, rather than the carbon tax directly impacting the business. 

But they do list plenty of excuses in that paragraph... The statement could be rewritten in just a few words "sales growth was ok, not sure how next quater will compare, but we are getting hammered with price deflation!"


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## McLovin (20 April 2012)

The reality is that WOW is a good, but not great, company that for many years had no real competition from CML. It was an asymettrical duopoly, WOW had a cost advantage because it had better management. And, they used that advantage to get more traffic through the door with better pricing. That sort of advantage is very easily eroded. They blame deflation, but lets face it, it's not the farmers who are saying we'll sell you milk for cheaper than we can produce it for.

Without tooting my own trumpet, I think this table illustrates how a WES controlled Coles has been able to reduce WOW's profitability.



McLovin said:


> Something I noticed when I did a bit of research on WOW was the decline in revenue/$ of PP&E.
> 
> I guess they're just not getting out of their stores what they used to...
> 
> ...




Slightly related, I went to Costco yesterday, I've been to a few in the US, and while the prices aren't as cheap as in the US, they are cheap. I bought a kilo of beef tenderloin for ~$30/kg and it was really nicely marbled, scotch fillet was ~$20/kg. At the big supermarkets that would be about 50% higher and the quality is average. I cut my steak with a butter knife, try doing that with a steak from WOW or Coles!


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## Ves (20 April 2012)

McLovin, I remember reading an article that was discussing that since the GFC, Woolies and Coles both had to build their own premises more so than in days gone past due to the fact that a lot of the larger property developers were having trouble getting the finance to do so.

This would certainly help bring down the rev / pp&e figures.

Obviously Woolies are also in a similar position to JBH in that they have pretty much saturated the most profitable areas. With increased competition from Coles the figures can only come down (revert to the mean).


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## McLovin (20 April 2012)

That's true, but even with development properties taken out, they are still earning 15-20% less/$ of PP&E than in 2006. Which is probably better explained by their CAPEX/change in revenue...



> 4.27, 2.56, 1.52, 1.20, 1.14




And then of course, from a FCF perspective, all that extra WC that has had to be sunk into the business to do the property development in house isn't a great thing either.



			
				Vespuria said:
			
		

> Obviously Woolies are also in a similar position to JBH in that they have pretty much saturated the most profitable areas. With increased competition from Coles the figures can only come down (revert to the mean).




Completely agree.


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## notting (20 April 2012)

Great stuff as always Mclovin.
Re carbon tax.  
Yeah I hadn't read the statement.  
It just jumped out at me from some general commentary.  I thought that point may have related to sentiment rather than some kind of weight on consumer wallets but felt there had been enough political/media lampooning already to have braught that seed into life already rather than being some unknown risk coming down the line.
Hence it seemed a little - 'blame the tools' kind of thing.


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## Ves (20 April 2012)

McLovin said:


> That's true, but even with development properties taken out, they are still earning 15-20% less/$ of PP&E than in 2006. Which is probably better explained by their CAPEX/change in revenue...
> 
> 
> 
> ...



 Certainly don't disagree with you! It's a shame, I really like the stock, because it's earnings are fairly predicatable (at least for now...). Up until a few months ago I was keen to snap some up if it got back to $23. But after thinking (and learning), I think anything over $20 is more than I would like to pay. I'd want to be compensated by a much higher earnings yield (and dividend yield) going forward because of the difficulties that they are facing from all angles.  In the same boat with JBH as well.


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## McLovin (20 April 2012)

Here's a question worth pondering (and one I don't know the answer to but would be interested in hearing others): What is WOW's customer proposition, ie why am I (or anyone) shopping at WOW _instead_ of Coles? The two are so often lumped together that it's hard to see why one would shop at one over the other, aside from convenience. If it's a true prisoner's dilemma where by co-operating they maximise profitability then logically you would expect WOW's profitability to fall and Coles' to rise. Compare it to the UK, where each of the chains has some proposition (price/quality/brand (M&S)).

Just thinking out loud.


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## poverty (20 April 2012)

notting said:


> Finding it hard to comprehend why WOW would quote some uncertainty going forward on the basis of the impact of the carbon tax as one of the uncertain factors!!
> Surely they don't really believe that!




Why not?  From the Labor Government's own literature the carbon tax, by design, will lower GDP and raise unemployment.  We're already seeing it with Toyota, Alcoa etc.  Taking wealth and spending power out of the economy via raising living costs and  unemployment to lower carbon emmisions is obviously going to have some effect on discretionary spending.  Perhaps not on bread and milk but think liquor, counter meals, pokies, new TVs etc.  It's not the end of the world, but there's certainly uncertainty going forward in all facets of the economy right now.


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## Julia (20 April 2012)

McLovin said:


> Here's a question worth pondering (and one I don't know the answer to but would be interested in hearing others): What is WOW's customer proposition, ie why am I (or anyone) shopping at WOW _instead_ of Coles? The two are so often lumped together that it's hard to see why one would shop at one over the other, aside from convenience.




I'm also interested in this.  I shop mainly at Woolworths, despite Coles having a similar range of products, wider less crowded aisles and shorter wait at checkouts.

There's something (for me) really attractive about WOW layout and presentation of fresh foods which somehow my local Coles just misses.  Hard to say just what it is other than WOW is always fully stocked with fresh stuff.  Coles' displays often look a bit tired and half empty.
Staff are also a bit slow and dopey.


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## ROE (20 April 2012)

about 8 months ago I switch to shop mainly at Coles...

they are actually cheaper than WOW ... all stores around here are either new or got  renovated...stunning looking stores make WOW look dirty and old....

WOW is going down because more people are shopping at Coles not deflation, that is just spin talk...

WOW got it too good for too long, Coles under WES is not an easy target, they are innovative and I was critical of WES when they took over Coles but Goyder proved me wrong.

I now wait for the price is right on WES and load up ...


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## tinhat (20 April 2012)

I heard a broker once summarise WOW as EPS growth = inflation + population growth. I guess we need to see the inflation figure as a deflation figure, add in pressure on margins from competitive forces and maturity in the industry structure (in terms of growth of supermarkets share of grocery and fresh food markets).

WOW is as defensive a defensive stock you can buy but without much upside these days. I don't really know why I own it. For income there are much better options out there. I can't see much upside to the share price in the medium term. That said it has some momentum behind it at the moment so it might get back up to its previous "point-of-control" midrange of $27 if there is some catalyst to kick it along like a rate cut. Then again I don't think the RBA will cut rates by more than 25 basis points in any one move and I don't think a 25 basis point cut in May will achieve diddley-squat for consumer confidence.

Let's face it WOW share price is in long term decline. I once had a target of $30 on it but I can't see the point of hanging out for that prospect to eventuate really.

I'm going to put WOW into the interrogation chair this weekend. I've been saying I'm going to sell down my WOW for some time now. Time to wack in a stop loss and hunt around for better opportunities or wait for a peak to sell for the cash.

PS: Also, I've never been comfortable having a stake in the gaming industry either.


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## Ves (21 April 2012)

McLovin said:


> The two are so often lumped together that it's hard to see why one would shop at one over the other, aside from convenience.



We shop at Woolies more than Coles. And it is just as you said, the most convenient of the two. There is a stand alone Woolies store near us. There are two Coles (and two more Woolies) close by but they are both in larger shopping centres and more bothersome to find parking and access. Apart from minor differences, I don't really see a big difference between the two. It generally depends more on the specific store, than the brand as a whole. Each have their own bad and good stores I have found.


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## Tyler Durden (21 April 2012)

McLovin said:


> Here's a question worth pondering (and one I don't know the answer to but would be interested in hearing others): What is WOW's customer proposition, ie why am I (or anyone) shopping at WOW _instead_ of Coles? The two are so often lumped together that it's hard to see why one would shop at one over the other, aside from convenience. If it's a true prisoner's dilemma where by co-operating they maximise profitability then logically you would expect WOW's profitability to fall and Coles' to rise. Compare it to the UK, where each of the chains has some proposition (price/quality/brand (M&S)).
> 
> Just thinking out loud.




Good question, I've thought about it before as well.

Although I own WOW, I do 95% of my shopping at Coles, mainly because there is one near my work. If I walk 10mins more, then there is a WOW. Perhaps it's just me, but the lighting seems a lot better at Coles than WOW, which gives the effect that WOW is a bit run down.

I also find that the stuff I buy (roast chicken, chips) are more heavily discounted at Coles than WOW. I even asked my friend this, who works at WOW. I asked if things were cheaper at Coles than WOW and even he said yes.


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## ENP (21 April 2012)

WOW has in my opinion reached saturation point. It has limited growth to expand and reading the annual reports, the executive consider a 3-5% long term growth in revenues and net profit as a "great result".

It's just about got a shop everywhere in Australia or New Zealand where people need a supermarket, discount retailer, etc. (The only exeption being their home improvement section which has lots of scope for growth)

Consider this against other large ASX companies. CBA/ANZ, BHP, QBE. These large companies all see the benefit of expanding into Asia and the Pacific. They have realised that the expansion available in Australia is near saturation and they are expanding into markets to get some decent growth for share holders. 

I have nothing against WOW, it's a good solid, reliable company that you know will keep in line with inflation and has a dependable dividend. However, I don't ever see it growing it's revenue, profits any more than the 5% or so that it has been over recent years.


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## McLovin (21 April 2012)

Interesting responses. I think it would be safe to say that for a lot of people, what keeps them coming back to WOW is fairly weak, the same is true of Coles. 

Julia: I have heard from others that WOW has better fresh produce the Coles. I guess they are "the fresh food people". I think my Mum avoids Coles because the meat is not as high quality as WOW. That being said, she'll often buy her meat from a butcher and go to Coles, so it's hard to split them. They're almost like the banks!

WOW are maintaining their market share, so you would have to expect they are sacrificing margin in order to do so.


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## oldblue (21 April 2012)

> It's just about got a shop everywhere in Australia or New Zealand where people need a supermarket, discount retailer, etc. (The only exeption being their home improvement section which has lots of scope for growth)




Not quite. WOW don't have an equivalent to Big W in NZ so there is scope for some modest growth there, if they ever decide to take that path. I wouldn't think that they would though, Big W is hardly a roaring success these days.

WOW have a 10% shareholding in The Warehouse in NZ, acquired in the days when WHS looked to be expanding their groceries section and a potential threat to WOW's growth. The other, bigger, supermarket chain in NZ, Foodstuffs, also has 10% of WHS which was acquired as a blocking move to WOW. I imagine that both WOW and Foodstuffs would like to be rid of their shares now that the WHS groceries threat has evaporated!


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## MAKING MUSTARD (26 April 2012)

Word is around Woolworths may be looking to buy the refrigeration service wing of Austral Refrigeration part of the troubled Hastie Group..... That tie up would reflect the Coles/CityFM joint venture


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## notting (26 April 2012)

McLovin said:


> it's hard to split them.



From a supermarket shoppers point of view. I was surprised by the business commentary about how WOW was so much better than Coles prior to the WES purchase!  Never saw the difference. In fact some times I would go to Coles which was further away because I couldn't get stuff a few things from WOW. 
I eat raw almonds a bit.  So far I have found them to be 'fresher' at Coles than WOW!!!
Looks like I'm a Muppet today!!


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## nulla nulla (5 May 2012)

Although the recent share price looks like a spike that will have a subsequent fall, I would not be surprised to see Woolworths continue to trade sideways and upwards at a higher level than that of the period from mid February to the end of April.

The Annual report was still good despite the deflationary impact of the price war with other retailers. With each annual report the journalists like to sprook a negative spin on Woolworths with the "war" between Coles and Woolworths, however the reality is that Woolworths continues to grow market share and revenue off a larger base than that of Coles.

The recent RBA interest rate cut should mean more funds available in the consumers pocket for food, alcohol, cigaretes and petrol. No doubt this was a signifiacant contributor to the share price leap this week.


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## noirua (6 August 2012)

Yep! After holding WOW for many years it now looks to be building again after being wrong footed by Wesfarmers adding punch to Coles.  May not do anything very dramatic and upside may stall around $33, imho, until evidence of a continued recovery is proven more solid -- content to hold.


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## McLovin (10 September 2012)

McLovin said:


> Something I noticed when I did a bit of research on WOW was the decline in revenue/$ of PP&E.
> 
> I guess they're just not getting out of their stores what they used to...
> 
> ...




The trend above, highlighted in red, continues. That ratio of PP&E to sales has fallen to $5.75 for FY12. They haven't released the details of their development properties in their prelim report.


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## Ves (13 September 2012)

McLovin said:


> The trend above, highlighted in red, continues. That ratio of PP&E to sales has fallen to $5.75 for FY12. They haven't released the details of their development properties in their prelim report.




Do you know if a similar thing happened to Walmart?

I was having a quick look before and Walmart still has the same gross margin now (24%) that they had 40 years ago (26%).  That's a phenomenal achievement.  I am sure that operating margins have fluctuated a little bit. Significantly WOW has a gross margin of 25% on the 2012 figures if my calculations are correct.  I find that to be an interesting symmetry.  Operating margins are higher than they were 5 years ago too, perhaps they may mean revert a bit however.

The good thing about these businesses is that they're pretty predictable, and have many repeat sales, however the disadvantage in that is that the market usually prices them pretty close to value, and it's very hard to get a discount.


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## McLovin (14 September 2012)

Ves said:


> Do you know if a similar thing happened to Walmart?




I don't sorry. I know that they are not as competitive (lower margins) for stores outside the Southern US. If you're interested, Greenwald has an entire chapter devoted to Wal-Mart in _Competition Demystified_.



Ves said:


> I was having a quick look before and Walmart still has the same gross margin now (24%) that they had 40 years ago (26%).  That's a phenomenal achievement.  I am sure that operating margins have fluctuated a little bit. Significantly WOW has a gross margin of 25% on the 2012 figures if my calculations are correct.  I find that to be an interesting symmetry.  Operating margins are higher than they were 5 years ago too, perhaps they may mean revert a bit however.




Gross margins for most grocers are between ~23-26%. If you read some of the comments that the multinational food manufacturers have been making about the current Australian situation and how the lack of competition is squeezing their profits in Australia then you get some idea of how WOW is maintaining its margins. I know a guy who works for a company that supplies to WOW (they're large) and he says that WOW and Coles absolutely bend you over. If they are getting squeezed on price then they expect to recoup it from their supplier. From a business perspective WOW have done a great job at maintaining gross margins and expanding NPM.

The stat I've highlighted I think has more to do with the saturation of supermarkets. Realistically, how long can you build supermarkets for in a country that was already well served? Once Coles was reinvigorated it was harder for WOW to open new stores and get the same bang for their buck _and_ existing stores had to deal with the new Coles. The ACCC has implied the same point, that there is an oversaturation of supermarkets at the moment.


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## tinhat (14 September 2012)

McLovin said:


> The stat I've highlighted I think has more to do with the saturation of supermarkets. Realistically, how long can you build supermarkets for in a country that was already well served? Once Coles was reinvigorated it was harder for WOW to open new stores and get the same bang for their buck _and_ existing stores had to deal with the new Coles. The ACCC has implied the same point, that there is an oversaturation of supermarkets at the moment.




How much of the route trade and convenience store market do people think there is still left for the supermarkets to capture? Also, are Coles or Woolworths going to be worried about over-saturating specific geographic markets with supermarkets if in the long run it means forcing out independents (such as IGA owners) and convenience/street-strip retailers? The thing that worries me about WES and WOW more than supermarket growth is the future of their discount department stores, K-mart, Big W. There is so much of the market moving online for discount goods - not just entertainment and electronics, even discount clothing, home-wares and manchester.


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## McLovin (14 September 2012)

tinhat said:


> How much of the route trade and convenience store market do people think there is still left for the supermarkets to capture? Also, are Coles or Woolworths going to be worried about over-saturating specific geographic markets with supermarkets if in the long run it means forcing out independents (such as IGA owners) and convenience/street-strip retailers? The thing that worries me about WES and WOW more than supermarket growth is the future of their discount department stores, K-mart, Big W. There is so much of the market moving online for discount goods - not just entertainment and electronics, even discount clothing, home-wares and manchester.




Yeah the convenience store/petrol thing seems to be where it's at. I bought CTX last year when they started finally coming to the realisation that it wasn't sensible to be trying to compete against huge refineries in Asia and they should instead focus on selling the fuel at the bowser and getting people in the door to buy a Cherry Ripe and Coke. CTX probably gives you a good idea of how profitable WOW's petrol/convenience stores are.

Apparently Big W's online offering isn't too bad. Don't know too much about it though.


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## Ves (14 September 2012)

McLovin said:


> I don't sorry. I know that they are not as competitive (lower margins) for stores outside the Southern US. If you're interested, Greenwald has an entire chapter devoted to Wal-Mart in _Competition Demystified_.



I have it on my shelf - it's an excellent chapter.




> Gross margins for most grocers are between ~23-26%. If you read some of the comments that the multinational food manufacturers have been making about the current Australian situation and how the lack of competition is squeezing their profits in Australia then you get some idea of how WOW is maintaining its margins. I know a guy who works for a company that supplies to WOW (they're large) and he says that WOW and Coles absolutely bend you over. If they are getting squeezed on price then they expect to recoup it from their supplier. From a business perspective WOW have done a great job at maintaining gross margins and expanding NPM.



Indeed -  I think Wow (and possibly WES) have salient competitive advantages that have been built over decades.  They're going to be super-hard to break  (failing extreme government intervention that I don't think will come).  People keep talking about overseas giants coming to break up the dominance, but it has not happened as yet (or at least has not been successful). I think WOW is as close to a blue-chip as you can get on the ASX, but unfortunately they are now ex-growth (unless you think Masters will turn into a big cash cow). Still, at the right price, it is a reliable dividend stream.



> The stat I've highlighted I think has more to do with the saturation of supermarkets. Realistically, how long can you build supermarkets for in a country that was already well served? Once Coles was reinvigorated it was harder for WOW to open new stores and get the same bang for their buck _and_ existing stores had to deal with the new Coles. The ACCC has implied the same point, that there is an oversaturation of supermarkets at the moment.



I agree 100%  - the same thing has happened to JB Hifi.  Actually, most of the big chain names in Australia are close to saturation. They all rely on population  & urban expansion.

Geoff Gannon on Gurufocus mentions this in regards to one of the reasons that he doesn't like retailers too much in one of his articles. There is only so many stores you can build.  I will try to find it tonight if I remember.


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## JTLP (14 September 2012)

I'm not saying that Aldi is the 3rd player but they are doing nicely on the share of $ front - taking a nice slice from the other 2.

When s#!t hits the fan and people are scraping cents together + the fact that Aldi will become more socially acceptable to shop at to the majority - you may see some slowing in the big 2.

One thing that will keep $$$ in their pockets is their pump to P/L - ambitions in the 25% range of total grocery...They didn't hire all those ex UK supermarket chiefs for nothing


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## nulla nulla (14 September 2012)

It is more likely that the real competition in the long run will come from some-one like costco in respect of food alcohol and petrol. Woolworths has the advantage in realestate accumulated over the years and expanding into Hotels (with their poker machine licences) and the development of the joint venture with Masters. Everyone else is effectively trying to play catchup. 

As much as they like to believe they are scoring points off Woolworths, the opposition isn't. Woolworths continues to grow, developing market share and increasing annual profits. If the opposition is growing, it is at the expense of the smaller players, not Woolworths.

The next legup for Woolworths will be vertical integration.

The four year chart is the best demonstration of where Woolworths has been and where it is likely to go next (?).




Woolworths has recently breached the October 15, 2009 peak of $30.57 when it hit $30.88 on 5/9/2012. The next challenge is the December 12, 2007 peak of $34.67. As lways D.O.Y.R and good luck.


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## skc (27 September 2012)

WOW...

Sold Dicksmith for some lose change of $20m. 

DickSmith had HY sales of $873m and EBIT of $19.5m. So the equity was worth 0.5x full year EBIT 

Not sure how the future upside works, or how much debt is within the Dicksmith unit. But it really isn't a large number, is it?!

FWIW, JBH trades at 5.5x, although direct comparison isn't fair due to the unknowns.


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## Knobby22 (27 September 2012)

Dick Smith is a dying business though. 
The whole electronics sector is going badly with internet sales. EVen JBHiFI, a very well run business will struggle to grow in my opinion.


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## McLovin (27 September 2012)

skc said:


> WOW...
> 
> Sold Dicksmith for some lose change of $20m.
> 
> ...




According to the AFR, Anchorage picks up the lease liabilities which are worth ~$50m.


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## brettc4 (27 October 2012)

I imagine you have now received your Notive of AGM and the SCA Property Group proposal.

I am struggling to see the benefit here. The only thing that stands out is that the Board want's to reduce the companies Plant and equipment. Fine but I don't see how splitting off these propoerties will help them do that, as SCA Propoerty Group will want to maximise their profit as well.

What are others opinion on this proposal?
Can anyone educate me on why splitting out these propoerties is a good thing for WOW  or me as a shareholder?

Cheers,
Brett


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## Smurf1976 (27 October 2012)

McLovin said:


> The stat I've highlighted I think has more to do with the saturation of supermarkets. Realistically, how long can you build supermarkets for in a country that was already well served?



Ask yourself a question. If you are in an Australian city, any city, that you are not familiar with then would you need to actually ask someone for directions to a Coles or Woolworths store?

They have become much like petrol stations. Very rarely do you need to actively search for one, normally you see plenty just in normal travel. Worst case you could just drive around random streets and you'll almost certainly find either a Coles or a Woolworths reasonably quickly as there are so many of them.


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## ecnalb (28 February 2013)

*WOW - Woolworths Ltd*

There is some good results coming soon. Grant O'Brian has some please number, with supermarkets and liquor showing some great growth. 62c fully franked dividend coming up.


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## tinhat (28 February 2013)

*Re: WOW - Woolworths Ltd*



ecnalb said:


> There is some good results coming soon. Grant O'Brian has some please number, with supermarkets and liquor showing some great growth. 62c fully franked dividend coming up.




For long term, stable dividend paying stocks, of course WOW is a great stock, but at the right price. We are on the verge of exuberance and already across it on so many defensive stocks. There will probably be better opportunities to buy into stocks like WOW.

I hold.


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## McLovin (15 October 2013)

Wow (pardon the pun)...



> Anchorage, which bought Dick Smith from Woolworths for $20 million last September, appointed Goldman Sachs and Macquarie last month to explore sale options, including an IPO valuing the chain at between $550 million – $620 million. Feedback from fund managers has been positive, with the recent rollout of Dick Smith departments in 29 David Jones stores further pushing the name into the spotlight. Dick Smith earned $80 million before interest, tax, depreciation and amortisation in the 12 months ending June, compared with $36 million EBITDA in its last year under Woolworths. The company has previously outlined to fund managers that it plans to open 77 stores over three years, expanding the network to 400 stores.




So either WOW didn't know how to run this thing or Anchorage have played a masterstroke.


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## ROE (15 October 2013)

McLovin said:


> Wow (pardon the pun)...
> 
> 
> 
> So either WOW didn't know how to run this thing or Anchorage have played a masterstroke.




Agreement structure wow will get a fare share of the float ...they sold at that price to attract turn around specialist and participate on the up side ...no Wow isn't that stupid -


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## skc (15 October 2013)

McLovin said:


> Wow (pardon the pun)...
> 
> So either WOW didn't know how to run this thing or Anchorage have played a masterstroke.




Or Anchorage has done a great job dressing things up. It's only been 12 months so it's hard confidently believe such turnaround as sustainable. May be there were one-off savings to be had, large reduction in cap ex, may be lower inventory / working capital... the usual bag of tricks in any private equity turnaround game. 

I can feel a MYR all over again.

The alliance with David Jones is not going to deliver much imo. Their respective market positions are quite different - DJS supposed to be more premium (are they anymore?) and in DickSmith they stock lower end brands. I don't think you can even buy a Sony TV at DickSmith. And who goes to David Jones to buy electronics? Only boyfriends/husbands who left their wives shopping in the clothes section. So you might pick up a few impulse buys on small ticket items, but much of the floor space are wasted with TVs and laptops that simply won't sell well imo.


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## McLovin (15 October 2013)

ROE said:


> Agreement structure wow will get a fare share of the float ...they sold at that price to attract turn around specialist and participate on the up side ...no Wow isn't that stupid -




The profit share agreement was terminated earlier this year. I think they paid ~$70m to WOW.



			
				skc said:
			
		

> Or Anchorage has done a great job dressing things up. It's only been 12 months so it's hard confidently believe such turnaround as sustainable. May be there were one-off savings to be had, large reduction in cap ex, may be lower inventory / working capital... the usual bag of tricks in any private equity turnaround game.
> 
> I can feel a MYR all over again.
> 
> The alliance with David Jones is not going to deliver much imo. Their respective market positions are quite different - DJS supposed to be more premium (are they anymore?) and in DickSmith they stock lower end brands. I don't think you can even buy a Sony TV at DickSmith. And who goes to David Jones to buy electronics? Only boyfriends/husbands who left their wives shopping in the clothes section. So you might pick up a few impulse buys on small ticket items, but much of the floor space are wasted with TVs and laptops that simply won't sell well imo.




Yeah, I certainly wouldn't be buying it. I'm more surprised that WOW couldn't have done these fairly simple things itself and then spun it off.


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## Tyler Durden (15 October 2013)

Going by the few DSE around my place and work (CBD), and if I dare to extrapolate it to apply to all stores, I can't see how those numbers could be supported.


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## ROE (15 October 2013)

If that is the case 90m for Dickies isn't a bad price 

This is a dress up to sell, any one smart wouldn't be touching it

they are flocking a dead horse  ...this area is intensely competitive and price sensitive, unless you are the lowest cost of doing business and selling the cheapest it hard to see you sustain decent profit....


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## notting (16 October 2013)

And you can get most things for a quarter of the price online.


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## McCoy Pauley (24 October 2013)

Woolworths still looking at ways to get into the pharmacy game.

http://www.businessspectator.com.au/news/2013/10/24/retail/woolworths-eyes-pharmacy-tilt


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## piggybank (14 January 2014)

Australia's two biggest supermarket chains *Woolworths* and *Coles* continue to punch above their weight, cementing their place among the world's top 20 retailers. Woolworths jumped two spots to 15th place while Coles' parent company Wesfarmers fell one place to 19th in a global ranking of the 250 biggest retailers by revenue. This year's Deloitte Global Powers of retailing report found Australian consumers were fairly upbeat in the face of a difficult start overseas in the last fiscal year. "Our home grown retailers Woolworths and Wesfarmers continue to maintain their impressive position in the top 20 global retailing powers" Deloitte Australia Partner David White said. Overseas retailers were still eager to target Australia to exploit relatively strong consumer spending, he said. "The relative strength of the Australian economy has persisted" Mr White said.

Woolworths, Australia's largest supermarket chain, beat global online retailer Amazon in terms of revenue, while Wesfarmers was ranked ahead of US supermarket giant Safeway, Deloitte said. The report again ranked US behemoth Wal-Mart as the largest retailer in the world followed by UK supermarket operator Tesco and US wholesale group Costco which now has operations in Australia. Tesco nudged out fourth-placed French supermarket chain Carrefour for second place. All of the other companies in the top 20 come from highly populated countries with large consumer bases such as the United States, Germany, UK, Japan and France. The report found more than half of domestic retailers predict consumer confidence will increase in 2014. Mr White said global firms Next and River Island who have been selling to Australia through their online stores were rumoured to open physical outlets after global fashion giants Uniqlo and H&M decided to open stores in Melbourne. Deloitte found the fastest growing company was Dutch supermarket chain Jumbo Groep which recorded a 115 per cent jump in revenue growth. Meanwhile, Amazon doubled its revenue growth to cement itself as the largest online company, followed by Apple and Wal-Mart. 

Eighty per cent of the top 250 retailers posted an increase in retail with a total revenue of $4.3 trillion in 2012.


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## skc (14 January 2014)

piggybank said:


> Australia's two biggest supermarket chains *Woolworths* and *Coles* continue to punch above their weight, cementing their place among the world's top 20 retailers.




Assuming you didn't write this article, piggybank, could you please provide the source? Thanks!


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## McCoy Pauley (11 February 2014)

Solid sales figures for the core, meat & potatoes business for WOW released a week or so back. Seems to set it up nicely for the first half results soon.  Still, it seems to me that Masters is a major drag on WOW, and I wonder how long it will be before O'Brien decides that Masters is a headache he can do without and tries to find a way to sell it just to get rid of it.


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## matty77 (11 February 2014)

Masters are losing cash every day with WOW propping them up, they are saying Masters wont even begin to turn a profit for another 3 years or around 2017. As we know those sort of forecasts can be misleading, so it wouldn't surprise me if its longer. Can WOW afford to lose another 300 million + over the next 3 years (or more!) on Masters or do they think of a different strategy? (yes they can afford it but will they let it happen?)

I'm not a fan of the Masters strategy either with placement of stores, if anyone has noticed most of the new stores have a Bunnings directly opposite or 100m down the road, it just doesn't make business sense to open a "poor mans Bunnings" next to all the Bunnings stores! If Bunnings was a bad performer then yeah good idea, but its a very solid performer..

My guess is they will throw cash away for another 2 years, then stop building new stores...


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## McCoy Pauley (12 February 2014)

matty77 said:


> Masters are losing cash every day with WOW propping them up, they are saying Masters wont even begin to turn a profit for another 3 years or around 2017. As we know those sort of forecasts can be misleading, so it wouldn't surprise me if its longer. Can WOW afford to lose another 300 million + over the next 3 years (or more!) on Masters or do they think of a different strategy? (yes they can afford it but will they let it happen?)
> 
> I'm not a fan of the Masters strategy either with placement of stores, *if anyone has noticed most of the new stores have a Bunnings directly opposite or 100m down the road, it just doesn't make business sense to open a "poor mans Bunnings" next to all the Bunnings stores! If Bunnings was a bad performer then yeah good idea, but its a very solid performer..*
> 
> My guess is they will throw cash away for another 2 years, then stop building new stores...




My understanding, from people connected with both sides of the fence, is that Wesfarmers deployed a very deliberate strategy of controlling property so that Woolworths would struggle to build a Masters that was not near a Bunnings Warehouse, unless it was effectively in an area that Wesfarmers considered to be not profitable for them.

Having said that, I know that in Preston (northern Melbourne) Woolworths did build a Masters that is just down the road from a well-established, and popular Bunnings.  I admit that although I'm a WOW holder, I do buy hardware, etc, from Bunnings as it's difficult to break my habit. 

I did read a comment somewhere the other day on one of the online rags that suggested that Luscombe decided to execute the joint venture with Lowes to build Masters because his local hardware store didn't contain everything he needed for a DIY project.  I suspect the story is apocryphal, but I sometimes do wonder...


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## notting (12 February 2014)

I prefer them Masters to Bunnings and think they are great!
The idea isn't to make a lot of money but to seriously harm the Bunnings model which can be used to help pay off the Coles dept and so on.  
Bunnings has been pretty much a monopoly ever since it took over Hardware House which was terrible for the consumer.
Masters is air conditioned and the staff are far more helpful, although Bunnings has lifted it's game in customer service since Masters came along.
As far as I can see Masters is getting more popular too.


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## Tsubodai (12 February 2014)

notting said:


> I prefer them Masters to Bunnings and think they are great!
> The idea isn't to make a lot of money but to seriously harm the Bunnings model which can be used to help pay off the Coles dept and so on.
> Bunnings has been pretty much a monopoly ever since it took over Hardware House which was terrible for the consumer.
> Masters is air conditioned and the staff are far more helpful, although Bunnings has lifted it's game in customer service since Masters came along.
> As far as I can see Masters is getting more popular too.




My understanding is that WOW did a gap analysis and found that, while Bunnings was the dominant player in hardware, there was actually a lot of market share still up for grabs, (about 40% I think). If this was the case then WOW were targeting the last of the independents not Bunnings. 

I think McCoy Pauley is probably right about W/farmers strategy to block available land forcing Masters into not so desirable locations or even into direct competition with Bunnings. This is great for the independents but not WOW. 

W/farmers don't seem to consider masters a threat as they are opening a new bunnings next to an existing masters in my old home town. W/farmers are super aggressive retailers like most that are highly successful. They do know what they are doing and I would not like to go up against them. Most times in retail, ego gets in the way of good decision making. Can't see them both going gangbusters long term and Masters has a lot of ground to make up.

Still, I have been out of the retail corporate landscape for over 6 years now so I could be way off base....


----------



## piggybank (12 February 2014)

McCoy Pauley said:


> I admit that although I'm a WOW holder, I do buy hardware, etc, from Bunnings as it's difficult to break my habit.




Hi McCoy Pauley,

I suppose you take your Bunnings stuff home in a non Australian made vehicle as well?

PM


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## oldblue (13 February 2014)

notting said:


> I prefer them Masters to Bunnings and think they are great!
> The idea isn't to make a lot of money but to seriously harm the Bunnings model which can be used to help pay off the Coles dept and so on.
> Bunnings has been pretty much a monopoly ever since it took over Hardware House which was terrible for the consumer.
> Masters is air conditioned and the staff are far more helpful, although Bunnings has lifted it's game in customer service since Masters came along.
> As far as I can see Masters is getting more popular too.




That strategy is called "killing your enemy by drowning them in your own blood"!

No, there's got to be more to it than that and if Masters doesn't breakeven within a couple of years I reckon we'll be seeing a change of strategy on WOW's part.


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## skc (13 February 2014)

oldblue said:


> That strategy is called "killing your enemy by drowning them in your own blood"!
> 
> No, there's got to be more to it than that and if Masters doesn't breakeven within a couple of years I reckon we'll be seeing a change of strategy on WOW's part.




Is Master's losing money from an accounting point of view or a underlying cash basis?

WOW has invested a lot in Masters and with high initial set up costs and lots of D&A which could take account profit down.

Whether Masters will meet WOW's long term ROE/ROCE type hurdle however remains to be seen.


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## Valued (13 February 2014)

WOW's senior operations management don't really know what's going on in a store operational level. When a big manager comes to visit a store the store gets managers to pull longer shifts (they have to do reasonable overtime) and take a lot of the wages allocated and dump it into the day before the visit and the day of the visit. When senior management come they see a perfect store with a lot of staff. The senior management get left scratching their heads since they see perfection and wonder why they arn't making more money. They should do surprise visits to stores on the busiest trading days. Prior to their visit they should tell area management down they will be interstate for a conference.


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## Murloc (14 February 2014)

I think Woolworths are putting their Masters stores close to Bunning's by choice. Woolworths want Bunning's customers so there's no point in putting their stores at the opposite end of town. A lot of people shop at Bunning's in the belief that Bunning's prices are better than anyone elses and therefore don't bother shopping around. Woolworths aim to change that perception. I notice Masters has taken Bunning's "...or we'll beat it by 10%" motto verbatim and are using it for themselves. I can imagine soneone going back and forth between the two stores getting  successively better 10% discount offers until they get what they are after for free. 

Once Bunnings loses the best prices magnet there's no good reason to  prefer shopping there, except maybe to get some empty cardboard boxes.


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## stewiejp (15 February 2014)

Correct Murloc - when Woolies first announced Masters they made the bold claim (I think it was Luscombe) that they would build one near *every* Bunnings store. Rather ambitious IMO but if they want to compete they need to be reasonably close to them. Will be difficult to find the real estate especially in more densely populated areas IMO.

Someone said something about losing money for 3 years... with a new business model that size, I would have thought 3 years of losing money would be on the conservative side. I like the new Masters stores but there's something about them which makes me think they won't do well. Hope I'm wrong.

I'm really surprised Woolies hasn't gone down the pharmacy route - they were looking at that *20+ years ago* when I was working for them, and they redesigned their "Health and Beauty" sections with the plan to put pharmacies in there.


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## McCoy Pauley (15 February 2014)

I'll think you'd find what Luscombe said was corporate spin after WES locked WOW out of the premium sites.


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## Murloc (15 February 2014)

McCoy Pauley said:


> I'll think you'd find what Luscombe said was corporate spin after WES locked WOW out of the premium sites.




Goodness gracious. Implying that Bunnings want Masters on their door step is like saying Bunnings wants to fill their car parks with Masters' billboards. Masters don't have a customer base to lose, Bunnings do.

Bunnings' team member: "Thank you for shopping here. Yes, that is a M6 thread and by the way did you notice the air-conditioned, better and more brightly lit alternative across the road? If you can read you will know it is called 'Masters'. If you want one washer and don't want to buy a packet of 25 to get it, I suggest you shop over there, but you didn't hear it from me." 

Trust me on this: Bunning's is a lumbering dinosaur, okay in its current undisturbed environment, and Woolworths + Lowes is the comet that will wipe it out.


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## Tsubodai (16 February 2014)

Murloc said:


> Goodness gracious. Implying that Bunnings want Masters on their door step is like saying Bunnings wants to fill their car parks with Masters' billboards. Masters don't have a customer base to lose, Bunnings do.
> 
> Bunnings' team member: "Thank you for shopping here. Yes, that is a M6 thread and by the way did you notice the air-conditioned, better and more brightly lit alternative across the road? If you can read you will know it is called 'Masters'. If you want one washer and don't want to buy a packet of 25 to get it, I suggest you shop over there, but you didn't hear it from me."
> 
> Trust me on this: Bunning's is a lumbering dinosaur, okay in its current undisturbed environment, and Woolworths + Lowes is the comet that will wipe it out.




Your loyalty and optimism for WOW is admirable but McCoy Pauley is right. Masters don't have a customer base to lose because they aren't making a dent. If they want to get into a war with WES they will lose much of their share holders money just as Coles Myer did opening World for Kids to combat Toys 'R' Us. But this is on a much bigger scale. 

Air conditioning and pretty lighting? When Bunnings opened every serious tradie I know thought they were to fluffy compared to a real hardware. Even those green and white flyers and simple tv adds are deliberate. they don't cost less to produce, they just look that way. WES know their customer well and are ruthless. Since acquiring Coles they have increased their market share in the toughest retail gig there is. 

My bet, Bunnings will prevail and masters? who knows. If I were WOW I would be looking for another big box idea to fill the retail space they will be stuck with.


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## ROE (16 February 2014)

Murloc said:


> Trust me on this: Bunning's is a lumbering dinosaur, okay in its current undisturbed environment, and Woolworths + Lowes is the comet that will wipe it out.




I think it maybe the other way around, the dinosaur will survive and the comet may crash and burned.
you know why Masters cant get the people and sale through the door? your beloved CEO told you it's the scale
I disagree, its not scale it is something that WOW cant fix with money...

it is the location...WES snapped up all the prime real estate and WOW left with second rate far away land no one want to go there and shop, and WES continue to snap them up and hold them so WOW cant get in.

your CEO tell you they break even in a year or two or make profit... and I think not, they be losing money for
a while yet, how long who know but in 2 years time he has to face the music with shareholders..

he cant use the scale excuse any more he may has to face front up and be honest...we late to the game...we cant get prime real estate and bunnings is a good operator and not some mum and dad push over.

I dont have either stock but looking to short WOW close to the day they face the music.

Like all good and great business they get to stage where they becomes complacent and the rejuvenate rival start to attack they left back pedalling.. 

WOW have an opportunity to kill WES when they took over Coles but they under estimate WES .... WOW could have gone on an all out price war and kick while Coles is down and WES was under massive debt pressure back then, they would have taken it out but management too complacent 
and gave them a 4 years of easy time...

it now is too late and the game reverse ...


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## keithj (16 February 2014)

ROE said:


> it is the location...WES snapped up all the prime real estate and WOW left with second rate far away land no one want to go there and shop, and WES continue to snap them up and hold them so WOW cant get in.



Anecdotally, a mate of mine sold his regional hardware store in a prime location a few years ago. He had offers from Bunnings, Mitre 10 & others - the highest being from WES. He refused to sell to Bunnings on principle, and sold to Danks instead (who are now owned by WOW).


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## ROE (16 February 2014)

keithj said:


> Anecdotally, a mate of mine sold his regional hardware store in a prime location a few years ago. He had offers from Bunnings, Mitre 10 & others - the highest being from WES. He refused to sell to Bunnings on principle, and sold to Danks instead (who are now owned by WOW).




one site out of how many WES already hold and own  drop in the ocean for WES ...

the fact is some market WOW cant get in, easy to find out where WES bunnings locations compared to masters, you see WES locations are far far superior.

WA I think WOW have a hard time there, ACT nothing left for them except at the airport, who go to airport to get hardware when a local bunning in 5-10 minutes way...the list can go on take NSW.

Market now price WES at a premium to WOW so the collective wisdom is WES will trump WOW in the near future.

When the facts change I change my mind ...I used to like WOW now I like WES more


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## Murloc (16 February 2014)

Tsubodai said:


> Your loyalty and optimism for WOW is admirable but McCoy Pauley is right. Masters don't have a customer base to lose because they aren't making a dent. If they want to get into a war with WES they will lose much of their share holders money just as Coles Myer did opening World for Kids to combat Toys 'R' Us. But this is on a much bigger scale.
> 
> Air conditioning and pretty lighting? When Bunnings opened every serious tradie I know thought they were to fluffy compared to a real hardware.




I'm not blindly loyal to Woolworths. I bought WOW stock because of Masters and also because Woolworths had the good sense to dump DSE. Bunnings don't care a whole lot about trades people. Bunnings promotes the idea that trades people shop at their stores because it enhances their image, giving Bunnings an aire of gravity and making them seem less like a chain of toys-for-boys stores. 

I laugh when I look at their "Trade Entrance" signs. I go in and out of their stores where I please and no-one has yet asked me to produce a trade certificate...

Me: *Wandering through Trade Entrance*
Team Member: "Wait! Let me see your trade certificate"
Me: "Sure, here it is."
Team Member: "That looks suspiciously like a fake certificate you produced with MS Word and a cheap DSE inkjet printer."
Me:"You are right. It is fake."
Team Member:"Okay, I'll give you the benefit of the doubt. Now, are you serious?
Me: "What?"
Team Member: "Are you serious?"
Me: "Are you serious?"
Team Member: "No, are you serious?"
Me: *punches team member in the face*
Team Member: "I'll take that as a yes. Good to go, my man. You may enter."

Bunnings is an out-dated business model that is entombed in stone. Masters does every thing Bunnings does but better. There is no reason to prefer shopping at Bunnings. End of discussion.


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## Tsubodai (17 February 2014)

Murloc said:


> I'm not blindly loyal to Woolworths. I bought WOW stock because of Masters and also because Woolworths had the good sense to dump DSE. Bunnings don't care a whole lot about trades people. Bunnings promotes the idea that trades people shop at their stores because it enhances their image, giving Bunnings an aire of gravity and making them seem less like a chain of toys-for-boys stores.
> 
> Correct, this is marketing 101 and has worked well for them...
> 
> ...




LOL, End of story? I think not. Just the beginning.  Good luck and I hope you are right. I will not be visiting or posting on this thread again.


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## piggybank (23 March 2014)

*Results Place Woolies As The Quiet Achiever & Is Recording World-Beating Returns.​*Woolworth's Everyday Rewards program, which offers shoppers Qantas frequent-flyer points and instore discounts, has more than 5 million members. If you're a regular Woolies customer it's an attractive program. If you're an investor, there's an even better program: joining the share register of one of the world's most impressive supermarket retailers. While Coles secures glowing headlines, most recently with its promise of a $1.1 billion expansion, Woolies remains our preferred supermarket pick with world-beating returns. Not only does it beat Coles but it also outperforms Walmart and Tesco, two of the biggest supermarket names globally.

To Read More, Click On The link Below:-
http://www.smh.com.au/money/investi...et-achiever-20140311-34ien.html#ixzz2wlURCcwZ


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## piggybank (22 April 2014)

Up 4.5% over the past couple of trading days


​


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## McCoy Pauley (28 May 2014)

Looks like Woolworths is exploring an opportunity to divest itself of its pubs but would take leases back over the sites.

http://www.businessspectator.com.au...rths-confirms-it-investigating-property-sales


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## McCoy Pauley (2 June 2014)

Interesting article in today's AFR about Wesfarmers finally paying attention to its liquor division.  The gist of the article is that the new Coles managing director believes that their liquor outlets have been neglected for too long and given that Woolworths' liquor division has double the market share of Coles', one suspects that if Coles' latest strategy is successful, Woolworths' earnings derived from its liquor division (eg., Dan Murphy's and BWS) will suffer.


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## trinity168 (22 September 2014)

https://au.finance.yahoo.com/news/accc-sues-woolies-over-faulty-054242490.html

Looking for a good price to buy into WOW. Wondering if these news will bring the share price a bit.

( am a newbie, looking for long term shares to hold )


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## nulla nulla (4 November 2014)

From $36.00 to $33.16 in two (2) days. It would appear that the level of growth for the quarter was not as high as expected and the experts have sold Woolworths down almost 10% in two days trading. In my humble opinion this is either a stupid over-reaction or a deliberate trading strategy. The key word that appears to be being overlooked is "growth". Woolworths continues to grow, Woolworths is larger than Coles and year in year out Woolworths continues to grow and pay good franked dividends.





I bought in today and will happily hold for the recovery. As always, do your own research and good luck. 

Edit: If it gets any cheaper tomorrow I will probably top up.


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## dlineinvestor (4 November 2014)

trinity168 said:


> https://au.finance.yahoo.com/news/accc-sues-woolies-over-faulty-054242490.html
> 
> Looking for a good price to buy into WOW. Wondering if these news will bring the share price a bit.
> 
> ( am a newbie, looking for long term shares to hold )




Long Term to hold,and on a weekly chart ... 32.50 level for an "initial purchase This would mean 1/5  your allocation of funds to this stock. It can go lower


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## nulla nulla (5 November 2014)

If you waited for an entry at $32.50 it looks like you may have missed the train. Opened at $33.30 (up $0.10c on yesterdays close) and never looked back.




Money for jam. Two (2) day trades closed out and one trade still live. Might duck down to woolies and see if they have some English marmalade and low price bread for my toast tomorrow morning. As always do your own research and good luck.


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## coolcup (5 November 2014)

nulla nulla said:


> Money for jam. Two (2) day trades closed out and one trade still live. Might duck down to woolies and see if they have some English marmalade and low price bread for my toast tomorrow morning. As always do your own research and good luck.




Great work nulla. Fantastic gain for such a short hold. I bought in today but will hold for the long term.


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## rimtas (5 November 2014)

I'd say it's a corrective bounce. I am looking at ~30 next year.


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## nulla nulla (7 November 2014)

Woolworths opened yesterday at $34.25, tested an inter-day low $34.185 (failing to reach down to my bid at $34.15) then spiked up to an inter-day high of $34.51, before being pushed down to trade for most of the day around $34.34. 

Although 955,657 shares turned over at $34.34 through the day and 1,037,234 shares turned over at $34.35 (most of it in the closing auction), the volume weighted average price for the day was only $34.297 due to five (5) cross trades totalling 1,165,181 shares at the previous days closing price of $34.13. It would appear that some investors were more than happy to accumulate at the $34.34 - $34.35 level. 
The MACD chart shows the closing price as diverging below the moving average price. 
The Relative Strength Chart shows the closing price as returning to (but slightly below) the moving average price which at close of trade was $34.68. 
Volumes of shares traded have been higher than average for the preceding six (6) days. Personally I don't see Woolworths testing $32.50 (or $30.00) in the near future, particularly with Christmas coming up.

As always do your own research and good luck.


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## dlineinvestor (7 November 2014)

nulla nulla said:


> Woolworths opened yesterday at $34.25, tested an inter-day low $34.185 (failing to reach down to my bid at $34.15) then spiked up to an inter-day high of $34.51, before being pushed down to trade for most of the day around $34.34.
> 
> Although 955,657 shares turned over at $34.34 through the day and 1,037,234 shares turned over at $34.35 (most of it in the closing auction), the volume weighted average price for the day was only $34.297 due to five (5) cross trades totalling 1,165,181 shares at the previous days closing price of $34.13. It would appear that some investors were more than happy to accumulate at the $34.34 - $34.35 level.
> The MACD chart shows the closing price as diverging below the moving average price.
> ...



Nulla,
As long as you understand my quoting 32.50 was in answering the newbies post for "what would be a good buy for a long term hold". 
Your trade is going well, do you mind me asking what software you use for the depth ?
Good analysis there. cheers


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## nulla nulla (7 November 2014)

dlineinvestor said:


> Nulla,
> As long as you understand my quoting 32.50 was in answering the newbies post for "what would be a good buy for a long term hold".





No problems, I agree if it gets that low it would probably be a good entry point if you were considering a buy and hold strategy. Probably a viable trade entry point as well.




dlineinvestor said:


> Your trade is going well, do you mind me asking what software you use for the depth ?
> Good analysis there. cheers




I use commsec/webiriss. Their "trade analysis" screen can provide some pretty useful information for inter-day monitoring as well as back checking.

Today looked like more accumulation to me around the $34.34- $34.35 range. The initial price jump on low numbers got pushed back fairly quickly but there was plenty of support in the low $34.30+ area. I would expect the share price to test resistance around the $35.00 next week. Then again I could be completely wrong. As always do your own research.


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## dlineinvestor (7 November 2014)

Interesting, I just started trialing D2MX, you probably know it the newest version of what u use. I like the depth and analytics
It will be nice if the market momentum carry's
Cheers,


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## rimtas (9 November 2014)

I noticed that WOW  has formed a Quasi Fractal, the replica at the higher degree of trend. 
It satisfies three main criteria for the fractal to be valid: form, number of waves and Fibonacci relationship with a Base Fractal. 
Both fractals have the same form of an Expanding Leading Diagonal.
Both have five Waves.
The Base Fractal is 61,8% of  a Copy Fractal.






Usually Quasi fractals are a good indication that the main trend will resume and prices will expand higher. In real time I use them when they are confirmed with a wave count-this combination makes an entry point almost without defeat.  But this time unfortunately EW contradicts as the Top has been reached in three waves, which I consider as a B wave of an Expanding Flat. 
This means that Wave C is in Operation now which could reach targets between 26 and 30 in y2015. The key level is 32.40, when(if) breached, will confirm that price will collapse further. 

As per Alternate count Intermediate wave (2) is already upon us, and WOW is sporting series of first and second waves (second waves as a fractals), accelerating in a third wave. 

Implications of this development long term are bullish-WOW is in a correction, and the question is _not if_ it reaches New All Time Highs, _but When_. I am a buyer.


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## nulla nulla (10 November 2014)

rimtas said:


> I noticed that WOW  has formed a Quasi Fractal, the replica at the higher degree of trend.
> It satisfies three main criteria for the fractal to be valid: form, number of waves and Fibonacci relationship with a Base Fractal.
> Both fractals have the same form of an Expanding Leading Diagonal.
> Both have five Waves.
> ...




Are you buying now at the present level $34.35ish or are you waiting for an entry at $26.00 - $30.00?


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## coolcup (10 November 2014)

And Rimtas how does this reconcile with your earlier comment that you are looking for ~$30 next year?


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## rimtas (10 November 2014)

No guys, I am not buying _now_. I have a lot of patience and can wait for an entry many weeks and months, as long as it takes for the market to sport a good opportunity.  Good oportunities are rare, just once or twice  a year, but when picked up on time, they reward you generously. 

I understand that the bottom could be in already, but current structure has  alternatives and I do not like losses. To reduce risk, the market must reduce the number of alternatives, it would be best to zero  

So the short answer is-yes, I am waiting cheaper, but I will buy it one way or another, just need a good entry point-it's when you buy and the stock rallies straight away.


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## nulla nulla (19 November 2014)

Hmmm, if it keeps getting pushed down like it has for the last nine (9) days, I might have to eat humble pie. As at 10:30am today it has already tested $32.65. That $32.50 target of dlineinvestor isn't so unbelievable after all.


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## McCoy Pauley (19 November 2014)

UBS took an axe to its view of Woolworths yesterday, apparently. Downgraded its rating from "buy" to "sell" (bypassing "hold") and cutting its 12-month target price from $39/share to $31/share. UBS forecasts a full-year FY15 earnings per share of 199cps, compared to a consensus forecast of 203.3cps.

This was from my FN Arena daily email this morning.


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## nulla nulla (19 November 2014)

McCoy Pauley said:


> UBS took an axe to its view of Woolworths yesterday, apparently. Downgraded its rating from "buy" to "sell" (bypassing "hold") and cutting its 12-month target price from $39/share to $31/share. UBS forecasts a full-year FY15 earnings per share of 199cps, compared to a consensus forecast of 203.3cps.
> 
> This was from my FN Arena daily email this morning.




I figured someone had downgraded them to "sell". Todays turnover was fairly high. As at yesterday morning a few analysts had reassessed them as "neutral" and "underweight" but there were still a few "hold" ratings and one or two "buys". The UBS clients must have headed for the door enmass. I suspect the sell down price was a bit excessive for a forecast earnings difference of 4.3cps.


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## Triathlete (19 November 2014)

If price does not hold at $31 or $29 then its coming back all the way down to $26!!!


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## nulla nulla (19 November 2014)

Triathlete said:


> If price does not hold at $31 or $29 then its coming back all the way down to $26!!!




At which point I would rate it a "screaming buy and hold".


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## rimtas (19 November 2014)

WOW has taken out an important 32,4 level today, confirming the scenario I discussed above.  This point marks a "point of Recognition", where almost everyone starts looking not how high WOW could rise, but how deep it can fall. I call it a sentiment shift from positive to negative-it is normal when the price enters into a second half of the decline.

Even some brokerage companies waited almost 7 months and a price decline of ~20%, and _only then_ they issued a "sell" recommendation. 
This is typical behaviour-most brokerage firms have a "Buy" near the tops, and "sell" near the bottoms. When the last of them still holding "buy" will capitulate and downgrade, sentiment becomes extreme and the bottom follows-it could be an anecdotal yet everyday situation.

 Recommendations are a very good sentiment indicator, because usually anyone issuing them has a linear thinking-they think that if fundamental situation is worse than before, it will get ugly later. But in reality fundamentals just follow the market and situation is worst at the bottom, and vice versa- looks shiny near the top.

 Wave structure is a key when applying a sentiment indicators, and at this point WOW does not has a count that would enable for a bottom setup. 
Also, when Quasi Fractals fail to produce the same directional movement, prices usually collapse in the opposite direction aprox in the length of the Copy Fractal itself, giving an ultimate target area at around 28 mark, which coincides with the previous Triangle apex (see chart above).   So I expect lower prices from here in the weeks to come.


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## Triathlete (20 November 2014)

nulla nulla said:


> At which point I would rate it a "screaming buy and hold".




WOW Chart price analysis


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## issh (21 November 2014)

A first plus day for a while


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## nulla nulla (21 November 2014)

issh said:


> A first plus day for a while




But is it only a "dead cat bounce"?


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## Porper (21 November 2014)

nulla nulla said:


> But is it only a "dead cat bounce"?




Plenty of confluence around $30.00. Ideally we'll see one final washout and get a buying opportunity.


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## nulla nulla (21 November 2014)

Porper said:


> Plenty of confluence around $30.00. Ideally we'll see one final washout and get a buying opportunity.




But how deep will the "final wash out" go? 
At what point will the analysts that have rated wow a "sell", switch to a "hold" or a "buy"? 
Is there still  potential for one or more legs down? 

How much of this retrace is simply brokers/fund managers churning the stock for fees?


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## Porper (21 November 2014)

nulla nulla said:


> But how deep will the "final wash out" go?
> At what point will the analysts that have rated wow a "sell", switch to a "hold" or a "buy"?
> Is there still  potential for one or more legs down?
> 
> How much of this retrace is simply brokers/fund managers churning the stock for fees?




Brokers often change their view after the event (A reversal). Just because Brokers are predominantly bearish doesn't mean too much. The "typical" retracement zone aligns with a zone of support. If a reversal higher is going to commence then the $30.00 area is the place where buyer's should be seen.


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## Triathlete (21 November 2014)

nulla nulla said:


> But how deep will the "final wash out" go?
> At what point will the analysts that have rated wow a "sell", switch to a "hold" or a "buy"?
> Is there still  potential for one or more legs down?
> 
> How much of this retrace is simply brokers/fund managers churning the stock for fees?




I am still of the opinion that $29 will see the retracement of a wave A down complete in which case price should move back up in a wave B formation anywhere between  $34 to $37 and even as far as the previous high of $38.92 before turning down into a wave C and bringing price back down anywhere between $33 and $26.
Anyone else have ideas in regards to Elliot wave concept?


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## rimtas (21 November 2014)

How about the fact that WOW has risen in three waves  from Jul 2013  bottom to April  2014 top? You can't fit it into Triangle.


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## Porper (22 November 2014)

nulla nulla said:


> But is it only a "dead cat bounce"?




At this point in time the chart below is my take from an Elliott Wave point of view.

5-waves up followed by an expanding flat. With these types of patterns wave-b will often hit the 1.382 extension of wave-a which is a direct hit here. Wace-C is often 1.618x the length of wave-a which came very close to being hit. This means slightly lower levels could be made before the turnaround commences. Also, as I mentioned yesterday the target area using Elliott Wave coincides with a good zone of support. Below $28.41 means the analysis is incorrect.


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## Triathlete (22 November 2014)

Porper said:


> At this point in time the chart below is my take from an Elliott Wave point of view.
> 
> 5-waves up followed by an expanding flat. With these types of patterns wave-b will often hit the 1.382 extension of wave-a which is a direct hit here. Wace-C is often 1.618x the length of wave-a which came very close to being hit. This means slightly lower levels could be made before the turnaround commences. Also, as I mentioned yesterday the target area using Elliott Wave coincides with a good zone of support. Below $28.41 means the analysis is incorrect.




Thanks for that view Porper as I find EW  a fascinating topic always good to see how others mark up their charts using this concept.
As far as my $26 goes it was more to do with some price tables I had made up using previous ranges and had found $31,$29 and $26 as my strongest levels using my monthly chart and not so much to do with the EW.

and

Rimtas I am not too sure of your meaning as I am still on my " L" PLATES as far as understanding the total concept of EW  so will need to do some more reading and research.

Thanks for the feedback all!!


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## rimtas (22 November 2014)

Porper said:


> Below $28.41 means the analysis is incorrect.




Your analysis is incorrect now already. Wave C can not be an overlapping 7 wave structure, because it is the third wave. And this is especially true in an expanding flat scenario (in other flats wave C can be an ending diagonal).

Also, welcome to the real world of  expanding flats, where wave C can be far much beyond of 1,618 of wave A. A good example was an 1987 Dow crash, or 2011 Apr  Dow correction, examples here are endless...

You can stick with Elliott Fibonacci guidelines which he outlined from his _observations_ in the mid of last century, or you can try to spot how waves are forming by yourself. You have what Elliott didn't-a state of the art charting software, presenting market as a fractal in different time frames at the touch of the button. You can spot the whole EW with all the rules and guidelines _just in one day_, looking at the one minute chart.


Back to WOW topic-_if_ this is wave C, it should be a normal Impulse wave consisting of 5 waves down. It can bottom anywhere right to the bottom of 23.18. The wave structure is the key here.  The most recent dive can be characterized best as the "Point of recognition", e.a the 3 of 3, or to put it simply, just the middle of wave C. It could take another half year for WOW to finish the pattern, with a series of fourths and fives ahead.
I'd be very surprised if WOW finds a bottom above 30 mark (in the light of Expanding Flat Scenario that we are tracking).


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## McCoy Pauley (24 November 2014)

Adele Ferguson wrote a very gloomy article about WOW that's been published in today's AFR here: http://www.afr.com/p/business/companies/project_oxygen_sucks_life_out_of_TgMTCAIrKo2jTKNU3bH1PP

Essential points:

Had WOW not gone into the Masters' JV with Lowes, WOW could have concentrate on maximising the performance of the food & liquor divisions and crush Coles before its revival took effect;
Grant O'Brien may not have much leeway should WOW fail to meet guidance for growth;
Remuneration at WES in relation to performance more in line with shareholder expectations than at WOW;
WOW is losing the PR battle about its prices, as many consumers see products sold by WOW costing more than at its competitors;
WOW's stock and inventory management systems are falling behind.


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## sptrawler (24 November 2014)

McCoy Pauley said:


> Adele Ferguson wrote a very gloomy article about WOW that's been published in today's AFR here: http://www.afr.com/p/business/companies/project_oxygen_sucks_life_out_of_TgMTCAIrKo2jTKNU3bH1PP
> 
> Essential points:
> 
> ...




Yes WOW seems to have lost its way, in some ways it appears to have drifted into the old pre Westfarmers Coles model.

I bought in at the initial float, then sold out at a later date. Since then I keep looking for an entry point, but then think why not WES, WOW seem to be playing catch up footy.

With Masters, it doesn't have seem to hit the market place in any given spot, it appears to be trying to be everything for everyone, therefore not actually appealing to any given sector.

We tend to go there as a last resort, not as a first place to check. It is a great shop, but the hardware isn't better than Bunnings, White goods aren't better than Harvey's or Retra vision.
Has a big identity problem.IMO

It will be interesting, if down the track if WOW, sell off Masters and Lowes buys them.


----------



## McCoy Pauley (24 November 2014)

Found a copy of Adele's article which isn't behind the AFR paywall.

http://www.theage.com.au/business/r...ves-supermarkets-gasping-20141124-11skc7.html


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## nulla nulla (24 November 2014)

McCoy Pauley said:


> Found a copy of Adele's article which isn't behind the AFR paywall.
> 
> http://www.theage.com.au/business/r...ves-supermarkets-gasping-20141124-11skc7.html




Thanks for the link McCoy Pauley. I suspect in all the "Coles" versus "Woolworths" hype that there are three (3) aspects of Woolworths that are either overlooked or deliberately down played:

1. The Woolworths annual sales and profit is bigger than that of Coles;
2. Woolworths profit continues to grow, while Coles is also growing at a slightly higher rate the percentage of growth is determined off a lower base level than that of Woolworths; and
3. As pointed out in the article, over the last three (3) years Woolworths have increased their distribution by 56.7%.

There seems to be a popular trend among the analysts and newspaper reporters to discredit the Woolworths results, year in year out, and invariably when they trumpet their gloom and doom message the share price gets slammed. However, the share price always recovers. It seems that the clued up investors are selling to the bargain hunters. Time will tell who is right. As always do your own research and good luck.


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## rimtas (24 November 2014)

nulla nulla said:


> There seems to be a popular trend among the analysts and newspaper reporters to discredit the Woolworths results, year in year out, and invariably when they trumpet their gloom and doom message the share price gets slammed.





You are very close with this, but I can ad for a clrearer picture.

The context of the article itself is not important. Most important is the time when it was published. 
After the stock was hit by a third wave (the strongest one in a sequence), analysts and reporters felt that their bearish view will be accepted as the explanation of the _reason_ why WOW is falling. Their job is to explain yesterday's moves.

 More and more are joining the crowd and they feel that they are right-downgrades, sell recomendations, gloom and doom articles and so on. This is an unconcious shared behaviour, where to be different means "death". So expect even more bearish views, analysis and articles about how WOW is "geting toasted". 

Third waves are the waves when the trend is clear, and at the bottom of it, fundamentals usually colapse in response.  Just the degree of this wave is not very large, so to what extent they will colapse will be seen, but it will be a good source for analysts to predict even more falls at the nadir. 

In reality nothing changed with company whatsoever-WOW situation is not much different from that 7 months ago when the stock was at All Time Highs and analysts and reporters were seeing a bright future and higher prices ahead. What changed is the views of market participants, and they changed only because of the price movement down. 

The quantity of bearish articles is fluctuating along with the trend, and when the WOW finds a bottom and rally next year, they just disapear. So socionomicaly it is normal to feel bearish at this stage, especialy for people who don't have much knowlidge about social science related to the stock market. 

There are no any conspiracy or "trying to push down the price with gloomy articles".  No one can push against the market in any direction, it always recovers to the direction of the main trend.

The price most likely will hit the bottom of a third wave (circled) in the coming weeks and fourth wave rally will start. Expect more articles "with the hope" at this stage.


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## galumay (24 November 2014)

nulla nulla said:


> .....It seems that the clued up investors are selling to the bargain hunters. Time will tell who is right. As always do your own research and good luck.




I agree with your comments there, its pretty much the case with shares in general, so few people are really investors and very few have the ability or discipline to research and understand the fundamentals of a company's business so they just trade in and out of the market on emotional triggers.


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## Julia (24 November 2014)

galumay said:


> I agree with your comments there, its pretty much the case with shares in general, so few people are really investors and very few have the ability or discipline to research and understand the fundamentals of a company's business so they just trade in and out of the market on emotional triggers.




Why would you assume people 'trade in and out of the market *on emotional triggers*'?
Most traders are not driven by emotions at all.
You do not have to engage in complicated fundamental research to successfully make money which, after all, is presumably the reason you are in the market.


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## galumay (25 November 2014)

Julia said:


> Why would you assume people 'trade in and out of the market *on emotional triggers*'?




Not sure how you could come to any other conclusion, if it wasnt emotions that ran the markets then companies would actually be priced at their value and you would never see an event like the GFC or a boom like the tech boom!


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## The Falcon (25 November 2014)

That's pretty much it...fear of missing out, then fear of obliteration. Chancellors "Devil take the hindmost" is a great read on the nature of markets and how poorly equipped us humans are to deal with them. It has always been so.

 The best battle plans seldom survive first contact with the enemy.


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## rimtas (27 November 2014)

That's right Falcon... and I can add this- Despite the rigorous analysis and understanding the fundamentals of the company, once you are in the market, logic no longer applies. You are at the mercy of forces that do not know your analysis and understanding, and even you.  Usually the limbic system takes over from the point of entry and only the fear of loosing and greed of making more exists. Fundamentals and analysis are left somewhere in the mist of deep corner in your brain...


By the way-today probably was formed the top of wave (iv) at WOW.


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## luutzu (28 November 2014)

Julia said:


> Why would you assume people 'trade in and out of the market *on emotional triggers*'?
> Most traders are not driven by emotions at all.
> You do not have to engage in complicated fundamental research to successfully make money which, after all, is presumably the reason you are in the market.




I think that if investors don't look at a company's fundamentals, they're at risk of getting themselves into a ponzi scheme, one that ponzi up and also ponzi down.


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## Julia (28 November 2014)

galumay said:


> Not sure how you could come to any other conclusion, if it wasnt emotions that ran the markets then companies would actually be priced at their value and you would never see an event like the GFC or a boom like the tech boom!



There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.


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## Value Collector (28 November 2014)

Julia said:


> There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.




it's mathematically impossible for the majority of people to make money this way.

Because, if the majority of people took that strategy, who would be there to buy when the stock when the market is flooded with sell orders because a trend reversal trigger was met, an early group who got their sell orders in quick enough might exit in time, but the rest behind them would just be adding to an avalanche of sell orders and an evaporating list of buy orders and a falling price.

It would just be increasing volatility, 

I am not saying it's impossible to make money that way, offcourse it's not. I am just saying it's a game that the majority must lose at to make the profits of the winners, and it becomes more about "Playing the Market" than making sound investments. 

It is also the sort of system that feeds the gambling stigma that the share market has, That leads a lot of people to avoid the market all together.


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## VSntchr (28 November 2014)

Julia said:


> There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.




The problem is, what is the definition of the trend reversing? 
If you have the trigger too tight then you will be stopped out on any slight volatility, too loose and you give back too much of the gains which the momentum provided you with.

Then there is the question of when to get back in if you got stopped out on a slight dip? 
Or even after the reversal?


I don't know...it gets quick tricky for me...but I appreciate the fact some employ this strategy successfully. You seemed to have timed it well over the GFC and boggo has a successful weekly chart system which employs this strategy.


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## Julia (28 November 2014)

Value Collector said:


> it's mathematically impossible for the majority of people to make money this way.



Let's not divert the WOW thread into a discussion on trend trading.  Wysiwyg has made an appropriate response to you on the trend thread, and I've added a comment there in response to Value Snatcher's post.

My only reason for making any comment was to contradict the baseless assertion by galumay that


> few people are really investors and very few have the ability or discipline to research and understand the fundamentals of a company's business so *they just trade in and out of the market on emotional triggers*



*.*


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## galumay (28 November 2014)

Julia said:


> My only reason for making any comment was to contradict the baseless assertion by galumay
> .[/B]




LOL!! "baseless assertion" eh?! Come on, Julia, surely you can do better than throwaway lines like that.

I have yet to see anything since my post that challenges the widely held view that i put forward in what you call my "baseless assertion"!


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## Julia (28 November 2014)

Please yourself.  Any suggestion that trend trading is based on emotion is baseless for perfectly obvious reasons.   Entries and exits are decided on SP alone, no hoping, no wishing, just using what actually exists on the chart.
Much more emotion involved in* hoping* that buying a stock in a strong downtrend, eg MND, will turn around.

I earlier suggested not to continue diverting the WOW thread.  If you want to make comment about trend following then it would be reasonable to do it on the trend thread.


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## skc (28 November 2014)

Interesting article on WOW and Coles.

http://www.sharecafe.com.au/roger_m.asp?a=AV&ai=32753



> *Is Aldi A Real Threat To Woolworths & Coles?*
> 
> It doesn’t take much imagination to see the same market pressures impacting operators here in Australia and this is exactly what Aldi has positioned itself to do.
> 
> For a business like Woolworths, currently enjoying the best margins in their history – EBITDA margins of ~7.9 per cent and EBIT margins of ~6.2 per cent on average for the past 4 years -there is potentially pain to come.






> If Australia has similar experience to Europe with discount retailers, Woolworth’s margins could eventually HALVE and earnings fall 30-40 per cent in the years ahead assuming our market continues to grow by 3-5 per cent.


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## luutzu (28 November 2014)

Julia said:


> ....
> 
> Much more emotion involved in* hoping* that buying a stock in a strong downtrend, eg MND, will turn around.




ouch. 

We, ok I, don't expect MND to turn around. I expect it to carry on business as usual and the market will turn around and value it properly, or improperly


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## dlineinvestor (28 November 2014)

Certainly not a pretty sight for any holders BUT
Right on the 200 SMA (this "means" short term support for all you fundies out there)
High volume this week could just be that (blow off)

The deal breaker will be if the 200sma is broken ..... it then becomes even more of a sell  !


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## TPI (29 November 2014)

In August, Stefan Kopp group managing director of Aldi said this on AFR:

http://m.afr.com/p/business/compani...d_end_coles_woolworths_d33XUgjDY5V0pXmhrWaOtK

“Nine billion is achievable and slightly optimistic. I wouldn’t go beyond that,” he said. “We have 350 stores and we plan to open 25 a year for the next years. Most of those new stores will be fill-in stores and they’ll take some sales away from existing stores.”

Mr Kopp denied customers were less satisfied than four years ago, saying Aldi had just won a Roy Morgan award for highest customer satisfaction.

“That’s in line with our internal data and research which is telling us we are providing better stores to customers now than four years ago. *We are getting better but the other supermarkets are getting better as well,” he said.*

Out-of-stock items were falling, checkout service was improving and Aldi was extending its produce range, adding meat items, a more sophisticated bread offer and extending and sprucing up older stores. *"We will grow to a certain size and we might become No. 3, but we’ll never be a big player, or even close to, the size of Coles and Woolworths," Mr Kopp said.*

“We have areas where we can improve and do better – that’s what we should be focusing on.”


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## galumay (29 November 2014)

Julia said:


> I earlier suggested not to continue diverting the WOW thread.  If you want to make comment about trend following then it would be reasonable to do it on the trend thread.




Julia, I have seen you do this same thing in the past. You have failed to actually read and comprehend what I wrote, then you have made assumptions based on your misunderstanding and used a school-marmish tone in your communication of that misunderstanding.


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## Julia (29 November 2014)

galumay, since you refuse to move your commentary to the trend following thread, let's just summarise the exchange.



galumay said:


> I agree with your comments there, its pretty much the case with shares in general, so few people are really investors and very few have the ability or discipline to research and understand the fundamentals of a company's business so they just *trade in and out of the market on emotional triggers.*




I questioned why you would assume anyone trading in and out of the market did so motivated by emotion, which brought the following:



galumay said:


> Not sure how you could come to any other conclusion, if it wasnt emotions that ran the markets then companies would actually be priced at their value and you would never see an event like the GFC or a boom like the tech boom!






Julia said:


> There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.




Then I suggested we should not divert the WOW thread into a discussion on trend trading and referred to wysiwyg's response which he'd sensibly put on the trend following thread, adding that I've also made a comment there in response to Value Snatcher's post.

Then:


galumay said:


> LOL!! "baseless assertion" eh?! Come on, Julia, surely you can do better than throwaway lines like that.
> 
> I have yet to see anything since my post that challenges the widely held view that i put forward in what you call my "baseless assertion"!



It was not a throwaway line at all.   You offered no basis for suggesting people who trade on price action are motivated by emotion.  I attempted to explain that trading on price is trading on just that.  No emotion.

Finally you have decided on a personal criticism re schoolmarm comment.  I have just politely suggested, more than once, that discussion on trend following go to that thread, so that people who just want to read about WOW are not irritated by some extraneous discussion.

I'll try asking once again, for the same reason.


----------



## Ves (29 November 2014)

His post has nothing to do with trend trading!!!    Did I miss him mentioning this???

You're interpreting his use as the word "trade"  as technical trading / trend following,  when he just means trade as in buy / sell.

Geez,   disagreements out of thin air!!!


----------



## Julia (29 November 2014)

Ves said:


> His post has nothing to do with trend trading!!!    Did I miss him mentioning this???



You seem to have missed wysiwyg's moving (via VC's post) the non-WOW related discussion to the Trend thread.
That is where trend following came up.



> You're interpreting his use as the word "trade"  as technical trading / trend following,  when he just means trade as in buy / sell.



OK.  Why then would necessarily any trade be based on emotion rather than eg simply what the price is?
How about putting the idea that all buys/sells that are not based on 'value investing' are emotionally based to people like Tech/A, Trembling Hand et al?  
galumay some while ago in a discussion about charting said that no matter how much he squinted, it was still voodoo to him.

That's fine, but it seems unreasonable not to accept that others find charts a useful and a non-emotional guide to profitability.


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## Joe Blow (29 November 2014)

This thread appears to be drifting off topic. Please keep your posts focused on WOW and feel free to start a new thread if there is another topic you wish to discuss.


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## McLovin (29 November 2014)

There's a whole branch of finance (behavioural finance) that deals with people's emotions and cognitive biases and how it distorts asset prices. I would have thought the basis of trend following is rooted in hitching your wagon to those biases.


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## Ves (29 November 2014)

Julia said:


> OK.  Why then would necessarily any trade be based on emotion rather than eg simply what the price is?
> How about putting the idea that all buys/sells that are not based on 'value investing' are emotionally based to people like Tech/A, Trembling Hand et al?



No one ever said they were.   You're just arguing for the sake of it now.  I'm out.


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## So_Cynical (29 November 2014)

skc said:


> Interesting article on WOW and Coles.
> 
> http://www.sharecafe.com.au/roger_m.asp?a=AV&ai=32753




I saw Roger Montgomery on "The Business" talking about this, reading the detail in the article its easy to see how Aldi could cut Wollies profit margin in half as has been the case in all territory's where Aldi operates.

Wondering what a 50% reduction in profit translates to in Share price terms? back to under 20 bucks?


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## McLovin (29 November 2014)

So_Cynical said:


> I saw Roger Montgomery on "The Business" talking about this, reading the detail in the article its easy to see how Aldi could cut Wollies profit margin in half as has been the case in all territory's where Aldi operates.
> 
> Wondering what a 50% reduction in profit translates to in Share price terms? back to under 20 bucks?




Ummm....is it just a coincidence that right at the time margins started falling Europe fell in the toilet?




There might be a segment of the market that wants no choice when shopping but they would be the minority. Waitrose has also grown it's market share, and they most definitely are not at the budget end.


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## So_Cynical (29 November 2014)

McLovin said:


> There might be a segment of the market that wants *no choice* when shopping but they would be the minority.




Yet just look at the focus Woolies has on price, every commercial is price focused with a little freshness and quality thrown in, and choice is mostly an illusion, i worked for a packaging company a long time ago...we packed 4 different brands of sugar, all the same sugar just different packaging.

Aldi can only make things worst for Woolies and Coles, there is no scenario where Woolies and Coles do not give away market share to Aldi.


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## McLovin (29 November 2014)

So_Cynical said:


> Yet just look at the focus Woolies has on price, every commercial is price focused with a little freshness and quality thrown in, and choice is mostly an illusion, i worked for a packaging company a long time ago...we packed 4 different brands of sugar, all the same sugar just different packaging.
> 
> Aldi can only make things worst for Woolies and Coles, there is no scenario where Woolies and Coles do not give away market share to Aldi.




It might be an illusion but Aldi isn't going to get 20% of the market with a one size fits all approach: They've been in Germany for 50 years and only have ~8% of the market. Most consumers want choice. Wanting the best price doesn't necessarily mean someone wants a single product.

What about the scenario where Aldi eats IGA's lunch.


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## TPI (29 November 2014)

McLovin said:


> It might be an illusion but Aldi isn't going to get 20% of the market with a one size fits all approach: They've been in Germany for 50 years and only have ~8% of the market. Most consumers want choice. Wanting the best price doesn't necessarily mean someone wants a single product.
> 
> What about the scenario where Aldi eats IGA's lunch.




Yeah if IGA has 15-20% market share, per the Montgomery article, aren't they the first to be in the Aldi firing line, rather than WOW or WES?

And if one thinks that Aldi will have a material impact on Australian supermarkets is it time to sell or trim holdings of both WOW and WES?


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## DeepState (29 November 2014)

TPI said:


> And if one thinks that Aldi will have a material impact on Australian supermarkets is it time to sell or trim holdings of both WOW and WES?




Consensus EPS three years out, FYI. Stock is not cheap on these metrics.  It does not enjoy strong valuation support if your outlook is not in the vicinity of these figures.  I'm not saying it's expensive.  It's just not a screaming buy at these prices and for these expectations.  Stock will likely move with changes in EPS expectations without materially over or under doing the proportionate movement.






Street sentiment is already bearish (balanced is bearish).  EPS estimates have been trending down.  Probably a lagging indicator though in terms of changes.  Broker recommendations aren't exactly highly predictive though.





Also, to McLovin's earlier point, Safeway operating margin in the US where Aldi has been present and growing since 1979.  Aldi has a nearly identical store count to Safeway now.  ~ 1,300.  Had been growing at 30-80 stores per annum since ground breaking.  Margin compression happened in the US as well and it probably wasn't related to a sudden jump in competitiveness from Aldi.


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## McLovin (29 November 2014)

A couple of other points:

1. The UK is a much more fragmented market than Australia.

2. Aldi has about double the market share in Australia than it does in the UK. It hasn't really led to the demise of the profitability of the duopoly. The incumbents have responded by having cheap high quality home brands "Woolworths Select" etc. I'm not sure where the article gets 4% from but Roy Morgan puts Aldi's share at about 10%. Just ahead of IGA.


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## The Falcon (29 November 2014)

We are on the way to a 40m+ population, WOW is dominant, with the best sites, and best supply chain and many levers yet to pull. Discussion of its demise is premature...if it goes to sub 25 I will pin the ears back.


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## So_Cynical (29 November 2014)

The Falcon said:


> We are on the way to a 40m+ population, WOW is dominant, with the best sites, and best supply chain and many levers yet to pull. *Discussion of its demise* is premature...if it goes to sub 25 I will pin the ears back.




No one is talking about demise, Coles and Woolies will always be dominant, the discussion is about market share and margins.


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## luutzu (29 November 2014)

I shopped at Aldi maybe 4 times since it opened 15 years ago?

The line (one or two max) are looonnnggg... I got to pay for bags; got to load it myself; got to return the trolley else lose $2. The food might be cheaper but I just don't "feel" it... it seems that it's cheaper because it's just cheap food somehow (and have tried its tuna/salmon canned food - they're quite terrible).

Mainly, I just don't see how not giving me shopping bag or bagging my own stuff saves me money. It could just go to them or we split it and I do all the work and they get half my work/savings... that and then I got to buy rubbish bags instead of using the shopping bags for the bins.

Anyway, that's my market research.


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## TPI (30 November 2014)

luutzu said:


> I shopped at Aldi maybe 4 times since it opened 15 years ago?
> 
> The line (one or two max) are looonnnggg... I got to pay for bags; got to load it myself; got to return the trolley else lose $2. The food might be cheaper but I just don't "feel" it... it seems that it's cheaper because it's just cheap food somehow (and have tried its tuna/salmon canned food - they're quite terrible).
> 
> ...




I've got a Woolies nearby my house and a recently opened Aldi, but I am yet to visit the Aldi as the car park is too small and too hard for me to get a spot.

Anyone else visited their nearest Aldi recently care to share their experience?


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## qldfrog (30 November 2014)

My own feeling
I visit Aldi on a regulat basis (Carseldine North Brisbane as it is next to the bunnings there and convenient parking spacel
;
it is cheaper but not that great a shopping experience;
queues at checkout, not always pleasant cashier, extra for credit card payment.

but on the +
a DIFFERENT line which means european(german) products I can not find elsewhere and a break in the boring IGA/worworth/Coles choice.
Born and raised initially in Europe, the lack of real diversity in Australia shopping is one of my grief,
Understandable when produced here: small market, etc
less so when most of WOW offer is actually imported.

ALDI specials are amazing in value for money;
you get [you name it] on a week basis be it cycling gear, tools, lighting appliance etc and these are decent quality items imported in batch (probably worldwide) which are priced as per cheapest on the web, yet you can touch and check before buying;
even better they often mistarget and the cycling gear or tools in a shop  used mostly by struggling retirees/families are then discounted the following weeks.Let's just say I do not believe this can be beaten;my win.
I doubt ALDI is a real thread to WOW
But just 2 days ago, I visited the Coles in Brookside and the shopping experience vs the WOW at the same location was day and night;
I had pleasure shopping there.
WOW is more a pain...no real price advantage or difference in lines I could see at Coles
just better aisles, presentation
That is a real worry for WOW
And worse, I have a costco membership;
Not that near from home but next to one IP I own, so I go there every second month;
This is a shopping experience and people buy big in the $300/400 trolley at least.Based from this floor experience, this is another nasty competitor for WOW, more than aldi which will be restricted to struggling people on a budget
So
Coles for cashed up/refined people, Costco for big families, aldi for (real) strugglers... and WOW for the rest....


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## nulla nulla (30 November 2014)

I suspect a lot of the participants in the discussion regarding Woolworths future are overlooking the fact that Woolworths and Coles are both *growing* their slices of the market. Coles is not growing at the expense of Woolworths and Woolworths are not growing at the expense of Coles. They are both taking market share from the other players.

Coles is growing at a faster percentage rate than Woolworths. This does not mean that Coles is actually lifting their monthly/quarterly/annual sales figures by a higher dollar value than Woolworths, it simply means that the amount by which Coles is lifting their sales figures is coming off a lower base than Woolworths. 

For example: If Woolworths has a base of $150 million and gains 6%, Woolworths will have growth of $9 million; and
if Coles has a base of $100 million and has gains of 8%, Coles will have growth of $8 million. Bragging rights in the percentage of growth, are all media hype and do not reflect how well either company is doing.

Coles was a mess (and still is in respect of liquor sales) and had/has more scope for improvement than Woolworths. Woolworths has been well run for a long time and has got an amazing head start over Coles. You only have to look at their involvement in Hotels (poker machines), Bottle shops (Dan Murphys) and Grocerys and it is immediately obvious that Woolworths is the market leader. Coles has a long way to go playing catch up.


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## Bill M (30 November 2014)

I live on the Central Coast of NSW, I have been here 5 years. In that time 1 big stand alone Aldi has opened up and 3 more Aldi's have been approved for construction, that's in a 20 km radius. They are flat out building the stores.

I shop at Aldi and they are way cheaper than Coles or Woolworths and their product is good. Yesterday for example I bought truss tomatoes, nice and fresh for $3.99 a kilo. Coles and Woolies are usually $6 to $8. There is a big difference between Aldi and the other two price wise. 

Where I think Aldi makes a big difference is where Coles and Woolies are in shopping malls and an ALdi opens up in that mall as well. They most definitely lose market share in that scenario. Aldi forces Coles and Woolies to drop their prices, no one would rather pay $8 a kilo for tomatoes at Wollies or Coles when you can get it at Aldi for $3.99.

My opinion is that overall, Aldi will only have little effect on the others profitability. As another poster wrote, the population is increasing everyday and there is plenty people to go around for all 3 big Supermarkets to do well. 

If the WOW price goes down to the $28 - $29 zone then I might start thinking about buying it for my super fund to be held long term. At that price it will be almost a 5% fully franked dividend and I don't see that dividend being in danger, good luck.


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## rimtas (30 November 2014)

Bill M said:


> I live on the Central Coast of NSW, I have been here 5 years. In that time 1 big stand alone Aldi has opened up and 3 more Aldi's have been approved for construction, that's in a 20 km radius. They are flat out building the stores.




It does'n matter how many stores Aldi have opened in the last 5 years, because WOW started to slide only 7 months ago. Nobody even mentioned Aldi at the start of 2014, when WOW costed around ~40 bucks a share, during that time ALdi expanded it's network at the same pace as today, but optimistic investors in a rising trend have not considered this as a threat to WOW.

Only now, when downtrend is very close to it's bottom, everyone seems to have became an "experts" in forecasting how WOW gets slaughtered and their mind is generating a wild ideas about the reasoning for this. 

 The implications of this behaviour is a classic one-the majority of people will miss out the bottom because WOW at this point will not look atractive-share price is low, internet is full of "experts" bearish opinions, the threats from other stores on every corner an so on... 

It is hard for them to imagine that WOW will hit the bottom in the early/mid of 2015 and the biggest rally in decade will be on it's way, which will carry prices to triple digits in the years to come.


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## TheUnknown (30 November 2014)

WOW what a disaster.............Aldi owning woolies, bunnings owning masters.

What could possibly go wrong????? 

Chasing pathetic dividends...........for a share price that will be worth $20bucks soon.


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## rimtas (30 November 2014)

That's a good comment that captures an extreeme sentiment towards stock price and the company, notice the dates when they are made...

https://www.aussiestockforums.com/forums/showthread.php?t=3539&p=813996&viewfull=1#post813996



Murloc said:


> Trust me on this: Bunning's is a lumbering dinosaur, okay in its current undisturbed environment, and Woolworths + Lowes is the comet that will wipe it out.







TheUnknown said:


> Chasing pathetic dividends...........for a share price that will be worth $20bucks soon.


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## TPI (30 November 2014)

Speaking of dividends, in my view, historically WOW has been one of the best stocks on the ASX for its regular, reliable and predictable dividends and significant dividend growth over a long period of time, having increased dividends every year for at least the last 14 years, which includes the GFC. None of the other large cap stocks come even close to this for sheer consistency, so I don't think it's just like any other dividend stock. See the graph attached. I found this on www.sharedividends.com.au a couple of years ago and it inspired me to create my avatar with the blue columns in it . When people talk about how volatile and risky shares can be I like to point them to this. That being said, the past is not necessarily indicative of the future, so the discussion of the future prospects of WOW remains relevant now so I watch and read with interest the comments about this.


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## luutzu (30 November 2014)

Nothing wrong with a bit of competition - it keeps management sharp 

Another way to look at competition is that instead of them destroying each other, they could just wink wink and divide the world into sections and niches? I mean, isn't that what all oligopolies do? They'll absolutely destroy the little guys, but the big guys they'll just come to certain agreements with through winks, nudges and signals.

Why fight when you can make money?


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## pinkboy (30 November 2014)

luutzu said:


> Nothing wrong with a bit of competition - it keeps management sharp
> 
> Another way to look at competition is that instead of them destroying each other, they could just wink wink and divide the world into sections and niches? I mean, isn't that what all oligopolies do? They'll absolutely destroy the little guys, but the big guys they'll just come to certain agreements with through winks, nudges and signals.
> 
> Why fight when you can make money?




Because that sounds like collusion.......

pinkboy


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## luutzu (30 November 2014)

pinkboy said:


> Because that sounds like collusion.......
> 
> pinkboy




You, me, the ACCC say collusion; they say "can you prove it?" 

If we say "yea"; they say "Oh OK. That one bad executive doing the unconscionable is now terminated. Here's the wrist to slap and we promise to keep management in line with our own high ethical standards of serving the Australian public with blah blah".

Anyway, was just having fun with predicting the future and management actions.


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## Wysiwyg (30 November 2014)

qldfrog said:


> But just 2 days ago, I visited the Coles in Brookside and the shopping experience vs the WOW at the same location was day and night;
> I had pleasure shopping there.
> WOW is more a pain...no real price advantage or difference in lines I could see at Coles
> just better aisles, presentation
> That is a real worry for WOW



Lighting, sound, colour and space make the sensory experience all that more enjoyable and could be worth extra feel good purchases as well as return business.


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## TPI (1 December 2014)

Westpac broker account charts say this below from a technical perspective that supports the case for it being oversold, but I have limited knowledge in this area, and there are other indicators which suggest the opposite:

_Stochastics
The Slow Stochastic Oscillator is registering a bearish signal as the %K is below the %D. However, the oscillator has dropped below the critical value of 20 and WOW is now signaling an oversold condition. This means that the recent downside momentum may not be sustainable.

Bollinger Band
WOW is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement._


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## tech/a (1 December 2014)

TPI said:


> Westpac broker account charts say this below from a technical perspective that supports the case for it being oversold, but I have limited knowledge in this area, and there are other indicators which suggest the opposite:
> 
> _Stochastics
> The Slow Stochastic Oscillator is registering a bearish signal as the %K is below the %D. However, the oscillator has dropped below the critical value of 20 and WOW is now signaling an oversold condition. This means that the recent downside momentum may not be sustainable.
> ...




A couple of comments.

"The analysts ' is using standard Oscillators for a technical perspective and in isolation.
I would suggest he has absolutely no idea what he's looking at.
All Oscillators are made up of High/Low/Open/Close/Range
Volume/Open interest they are a derivative of price and as such reflect the price action over the period selected for the oscillator.

In *EVERY* case of an extended down move *ALL* oscillators will indicate oversold---problem is they *STAY THERE!*

Bollinger bands are simply displaced Moving Averages and in a free fall will see trading well below.
I've only had a brief look at WOW and cant see anything that suggests a pause yet.

If you would like a considered technical view I'm happy to oblige---but some may see it as 

*TOO EMOTIVE!!*

Read--reactive to popular opinion in the face of clear Fundamental opinion.


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## Triathlete (1 December 2014)

Ves said:


> No one ever said they were.   You're just arguing for the sake of it now.  I'm out.






tech/a said:


> A couple of comments.
> 
> "The analysts ' is using standard Oscillators for a technical perspective and in isolation.
> I would suggest he has absolutely no idea what he's looking at.
> ...




Hi Tech
I would be interested on your technical view as to where you believe WOW is headed from here.I am still of the view that if price does not hold at $31 then $29 is the next level followed by$26 who know after that?


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## So_Cynical (1 December 2014)

TPI said:


> Anyone else visited their nearest Aldi recently care to share their experience?




Visited my Aldi for the first time in maybe 6 months the other day, i always buy these frozen Potato Gratins that they have, anyway i ended up getting bread and minced garlic and some cheese kransky, i had a goos look in the meat and dairy sections and noticed that the range has expanded and had undergone a gourmetification.

Also only took me 3 minutes to reach the checkout.


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## JTLP (1 December 2014)

Triathlete said:


> Hi Tech
> I would be interested on your technical view as to where you believe WOW is headed from here.I am still of the view that if price does not hold at $31 then $29 is the next level followed by$26 who know after that?




Agreed - Tech-A would be great to have your input in to this thread.
Rimtas has also provided some really great charting and it would be good to overlay yours for mine and others learning


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## TPI (1 December 2014)

tech/a said:


> A couple of comments.
> 
> "The analysts ' is using standard Oscillators for a technical perspective and in isolation.
> I would suggest he has absolutely no idea what he's looking at.
> ...




Thanks tech/a, that would be great if you have time to give us your considered view on WOW from a technical perspective.


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## rimtas (1 December 2014)

TPI said:


> Bollinger Band
> WOW is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.[/I]





All price related indicators are useless if they are not applied within a context of the Wave Principle. Every eliotician knows  that third waves produce an effect, when indicators/oscilators are in an oversold condition and stay there until third wave is not over. In other words, they stop producing buy/sell signals, as they did in first/second wave, or fourth/fifth. 
So basicaly if you folow some indicators and noticed that they entered an oversold stage and market did not rebounded, this means that third wave is in progress. At this point one can start changing a time frame of observation-lets'say from hourly, switch to 4H, and then to Daily-in every case indicators will reach an oversold case, and depending on the degree of the wave in progress, an oversold condition starts to diverge at the end of third wave.  

Usually the bottom of the oversold indicator is at the point of recognition area and lower(in the midle of third wave), this means that the wave already traveled half of its way, and if you buy not knowing this, loses will folow.

In case of Bollinger Bands- during a Third wave price is trading above/below(depending on a trend up/down)Bolinger Bands and this indicator also fails to produce a signal for entry/exit. 
So in sumarry-every single indicator that is calculated using price/time factors is failing in a third wave and not behaving as everyone expects.  They just stay low(in downtrend).


I am not sure how to label a waves on WOW in a Daily chart, but this recent move is definately the third wave, so WOW is  already half way to the bottom and indicators from here start to diverge and not breach lower levels. This will be only true if the scenario that we are tracking is correct, e.a this is the final wave of an 3-3-5 fllat, and Wave C  which should cosists of 5 waves down, is in progress.

I labeled two scenarios at the moment, and as the wave structure develops further down, one of them will be eliminated, but I am sure that to pick up the bottom will be quite easy (sometimes next year).

For a short term trade, one bottom (iii circled) is due just days from here.


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## TPI (1 December 2014)

Very interesting post rimtas, thanks. The terminology is all new to me, but something to add to the reading list at some stage.

MTS also got slammed today with the share price plunging more than 15%, perhaps this is where Aldi starts to take them down and eat away at their market share?

https://www.fool.com.au/2014/12/01/...15-as-dividend-payout-plunges-should-you-buy/


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## rimtas (2 December 2014)

I'll try to determine the bottom of wave iii(circled) by using channelling technique and Fibonacci ratios.

As the wave count and an Indicator(RSI) at the bottom of the chart suggests, the drop from 32.08  is weaker than previous impulse wave,  meaning a final wave (v) is in progress. Fifth waves are terminating waves and after they find the bottom, rally will follow. 

If  wave (v) would be equal to wave (i) with a 7,81% drop from a corrective top, then the bottom should be at +/- $29,4.

Usually wave (iv) subdivide entire Impulse into Fibonacci section 61,8/38,2 and adding this technique the bottom would be at $29,69.

A Descending lower Impulse Channel line is at $29,4 tomorrow, so basically  to reach it, market must gap down on open and reverse instantly to the upside. Sideways trading would extend a small wave iv(of (v)) and a Channel line would be closer to $29.  
Price doesn't need to touch this trendline, it can fall short from it, but keeping in mind that this is a third (circled) wave of the larger degree, it probably will, as third waves are strongest ones in a sequence. I will be no surprised if it overshoot to the downside. 


So in summary the best looking target area for wave (v) is in  $29,4-$29,7 brackets this week.  A confirmation of the bottom would be a small five wave rally in a 5min timeframe, that's were the buying opportunity for risk takers exists. 
The rally that should follow will carry prices back to the wave (iv) area of $31-$32 and this could take months.


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## Triathlete (3 December 2014)

rimtas said:


> I'll try to determine the bottom of wave iii(circled) by using channelling technique and Fibonacci ratios.
> 
> As the wave count and an Indicator(RSI) at the bottom of the chart suggests, the drop from 32.08  is weaker than previous impulse wave,  meaning a final wave (v) is in progress. Fifth waves are terminating waves and after they find the bottom, rally will follow.
> 
> ...




Thanks Rimtas for taking the time to give us your technical view on WOW,I always look forward to them.One question I have if everything goes to plan as you mentioned in your comments and we get the rally back towards the $31-$32 price range for wave 4 do you have an early view as to where price could go when it finally begins its wave 5 down or is it too early at this stage as we do not know the wave structure?


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## rimtas (3 December 2014)

I usually try to determine targets only when the structure looks closer to completion. Today WOW rallied in 5 waves up from the bottom( means more to go later), but my targets mentioned were not reached. Moreover, wave (v) looks too short to say that it is over, but it can be.  Maybe it will move in "threes" and sport an Ending Diagonal for wave (v) if it is not yet complete, who knows. 
Or maybe it is just the first wave of (v) and todays rally was part of wave ii.  I'll better not guess short term moves, because I do not trade within tame frames mentioned. 

To answer your question there is one method to determine aprox bottom of five wave move when the point of recognition is behind us. Simply use this area as the middle of the wave and you can see that the theoretical bottom could be at ~$27.   There is even a runaway gap in mid 2012 at $27.15 that could attract prices to close it. 

But in reality this method can't be used, unless you want to put your buy order now because let's say you go to Himalayas  and won't be able to monitor the situation next six months and miss out the bottom.  Waves can be extended, truncated, or in an ending diagonal formation, so there is no true way to say where and when the bottom would be  until it is in and a five wave rally  on a Daily time frame starts. 

But I am keen to buy this stock and keeping a close eye on it. Usually I buy in two/three stages when I smell a bottom is nearby.


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## tech/a (3 December 2014)

Sorry about the delay been pretty busy.

*Click to Expand*

*This is a WEEKLY CHART*

*

*


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## kid hustlr (3 December 2014)

tech do you make anything of the recent high volume bars?


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## Triathlete (3 December 2014)

Thanks Rimtas for your further views on WOW.

Thanks Tech/A for giving us your view as well and posting your chart. Much appreciated.

I am sure we will all learn something so it will be good to see what happens now with WOW.

Thanks again.


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## TPI (4 December 2014)

Thanks tech/a and rimtas for the charts, interesting stuff.


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## McCoy Pauley (4 December 2014)

According to an article from The Age, Merrill Lynch predicts that the profit of WOW in FY16 and FY17 will fall.

http://www.theage.com.au/business/r...years-says-merrill-lynch-20141204-11zsrz.html

WOW has initiated talks with Pie Face over selling Pie Face pies in WOW stores.

http://www.theage.com.au/business/retail/woolworths-throws-pie-face-a-lifeline-20141203-11zgpj.html


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## Triathlete (6 December 2014)

Julia said:


> There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.




You are absolutely right there Julia!!

A good example was Forge group before it was liquidated.Some of the top fundamental newsletters going around that have been in business for over 40 years were all giving this company the thumbs up as a buy and many fundamental only investors were caught out big time when the charts clearly showed it was time to exit.A technical investor would have ridden the trend up and then exited near the top of the trend with a significant profit.Many were still piling into the stock when it collapsed a few months latter.
I will still invest in sound fundamentals but the technicals need to be on my side as well before I place my cash on the line!!


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## nulla nulla (6 December 2014)

kid hustlr said:


> tech do you make anything of the recent high volume bars?




In my humble opinion there appears to be a lot of accumulation happening in WOW at the moment even though they have had a few broker downgrades. 

Their announcement in respect of liquor distribution in China appears to have been well received by the market. I imagine them rolling out the equivalent of a Dan Murphys in China would be very promising.


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## Triathlete (6 December 2014)

Julia said:


> There is nothing emotional about simply following price action:  staying on a rising trend and exiting when it reverses.






nulla nulla said:


> In my humble opinion there appears to be a lot of accumulation happening in WOW at the moment even though they have had a few broker downgrades.
> 
> Their announcement in respect of liquor distribution in China appears to have been well received by the market. I imagine them rolling out the equivalent of a Dan Murphys in China would be very promising.




Is it accumulation or is it still a distribution phase.?
Could the fund managers be slowly  getting out around this price to protect there profits at this $31 level in small orders as  not to alert the majority as to what is going on?
If that is the case it may take a few months in which case price will then move lower to complete the EW 5 as has been shown by both Ritmas and Tech/ A charts.At what price level only time will tell..At which point we will see them all pile back in
Just my own view!!


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## Wysiwyg (10 December 2014)

Triathlete said:


> WOW Chart price analysis



Hey there Tri. I'm not Elliot Wave or Fibonacci orientated so I don't want to go down that chart path. However I have run a test on WOW and a index of stocks using an exit of 10% but the exit is from any Highest High Price. Since you noted that 10% pullback would be an exit from this years peak. You also would buy WOW in an uptrend so that could be a new high price being made (historical reference high ??).  The results were in line with trend following strategies. WOW is a good example of a long term up trending stock.


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## Triathlete (11 December 2014)

Wysiwyg said:


> Hey there Tri. I'm not Elliot Wave or Fibonacci orientated so I don't want to go down that chart path. However I have run a test on WOW and a index of stocks using an exit of 10% but the exit is from any Highest High Price. Since you noted that 10% pullback would be an exit from this years peak. You also would buy WOW in an uptrend so that could be a new high price being made (historical reference high ??).  The results were in line with trend following strategies. WOW is a good example of a long term up trending stock.





I am sure it would help your trading and keep you safe in the markets if you new Elliot wave , Fibonacci/Gann levels.

I was only using the 10% pullback as an example in regards to the  "stop loss thread is not your friend thread" and whether getting out there for one person would have been the right time for the second person to start accumulating at that time.

For me it would have depended on whether I thought the stock had further to run or not....I may have let it pull back further it just all depends on my strategy at the time and where it was in relation to its Elliot wave and Fibonacci /Gann ,strongest support and resistance levels at the time.

Just because a stock makes a new high does not mean it is in a confirmed uptrend...A trader/investor needs to confirm this on his chart. This is an important point because in my experience you always trade with the trend and not against it. I am sure you have heard the saying "The Trend is your Friend" but it needs to be confirmed!!

It is always good to have two scenarios before you trade , that is how far is the stock likely to run and how far could it fall if it goes pear shape...you need to understand these scenarios so it does not play with your psycology if the trade does not go as you had hope , so best to know this upfront before you trade and what your exit strategy will be!!


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## rimtas (17 December 2014)

I think bottom of wave ((iii)) is close, as waves look quite good.
 Either one more low after pop up, or rally straight away, but the slowing momentum and countable subdivisions makes a good case that a bottom is near. I th


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## JTLP (17 December 2014)

rimtas said:


> I think bottom of wave ((iii)) is close, as waves look quite good.
> Either one more low after pop up, or rally straight away, but the slowing momentum and countable subdivisions makes a good case that a bottom is near. I th




Thanks Rimtas. 

Based on that, where do you see wave 5 landing (if I am interpreting correctly) for both price and time period?


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## rimtas (17 December 2014)

It should land before Christmas, maybe even this week, somewhere very close to 29. I will be looking for an Impulse wave up in 15 min time frame to confirm a change in trend.


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## rimtas (29 December 2014)

Today structure best looks as a "five", which confirms that uptrend is in progress.  I will be looking for a correction in coming days as Wave (b), and then a new leg of advance towards 32 with wave (c).

If it continues to rise without wave (b), then I would consider the entire advance from ~29 bottom as an (a) wave of a larger Triangle, but it should be at least of 7 waves and end at ~32 price area(+/-).
I will update charts as waves unfold, trying to predict  tops and bottoms of completed waves at various degrees.


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## Triathlete (6 January 2015)

Just updated my WOW weekly trading chart seems like it is all down at present. $29 is still an important level but should it close below here,then it is all down for WOW in my opinion.

Anyone else like to share their own views.

As always do your own analysis this is not financial advice.


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## seven7 (6 January 2015)

Hi 
I don't know about anyone else here.  But its Woolworths we're talking about here.  Yeah I know masters might flop,  it  may break even,,,,maybe even do ok. Woolworths will still survive in some form.

This company has been around all my life. So I'm going to start buying.  If it gets to $29, well great, but under $30 is close enough for me to have a look.  They seem to be opening shops all over the place.

To put it in perspective I am looking at buying etf bonds, etf oz shares and etf world shares also.  The ONLY 3 individual shares I want to own (and I am a simple blue collar guy selling a few houses in sydney) are CBA (tick at less than half current prices) AGL (tick - I look at this one like a bond, it wont make much but slow and steady - good enough) and Woolworths (soon - and just because it is Woolworths). I am happy with a 4% franked dividend from them and they are well over this.

my breakdown hopefully will end up something like 
25% Bonds - VGB
25% OZ ETF - VAS or VHY which ever is safer
25% World ETF - VGS or probably VGSAD
25% OZ individual shares - CBA,AGL and WOW

I'll be buying VGB and WOW over the next few months.  While everyone is scared about WOW I will buy.....slowly and carefully.

I realise there is overlap with the OZ ETF and my individual shares, but what can I do. Our market is dominated by a few banks and 2 supermarkets.

I may be wrong...I have no real knowledge on anything but have been lucky so far. Also I am older now and wont get the pension so am chasing dividends. 

cheers


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## rimtas (6 January 2015)

seven7 said:


> slowly and carefully.




Hi, 

Could you please shed some light on how the buying process in a "slowly and carefully" manner is processed?


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## seven7 (6 January 2015)

Hi Rimtas

and thankyou for your interest.

I have been selling houses and buying shares in my own transition to retirement for some years now.  So to answer your question as best I can.  My version of slowly and carefully is that I feel its a good time to buy govt bonds right now.  Reasoning ... the s--t hasn't hit the fan yet so they are ok (and that's good enough if keeping long term) buying.
For WOW...they are at a low right now...so if I see on any particular day they are hitting a low...yeah I will put in a buy if I feel like it.
Slowly and carefully is an individual thing. Each person is different. I am investing proceeds from sales, have no debt and looking to 'carefully' as best I  can invest.  My $1 slow investment  might be your $10 equivalent.

I am comfortable with my choices - that's the careful part.  Do you really think Woolworths will start closing their stores? It will probably be my most risky investment EVER!  So in proportion, for me anyway I am ok with that.

I am always willing to learn.........ETF's seem good to me esp with the Gov Bond aspect. But, some things are also worth a look. For me WOW is one of these things.

Of course,, I will probably be wrong on this.   As I am retiring on my own hard earned...why wouldn't I be!

Cheers


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## coolcup (6 January 2015)

seven7 said:


> I feel its a good time to buy govt bonds right now.  Reasoning ... the s--t hasn't hit the fan yet so they are ok (and that's good enough if keeping long term) buying.
> Cheers




Hi Seven7

Out of interest, and I don't mean to hijack the woolworths thread, but I was wondering what your view is on interest rates? Do you think they are likely to go up over the next few years or go down?


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## rimtas (6 January 2015)

Today's low of 29,56 could mark the bottom for wave (b), which corrected fib 76,4% of wave (a). I would allow  for one more push down for better and more complete wave subdivisions, but market could rally from here in wave (c).

  I expect that the entire correction of wave ((iv))(circled) will be some sort of sideways movement, resulting in flat(even expanded with new lows), or Triangle which could go into March.   Maybe it  will sport a Quashi Fractal copying a  previous wave (iv) of ((iii))(circled), resulting in Flat. 
Other options also available, and to tell in advance which one will occur is impossible until it's close to the end, but as wave ((ii))(circled) was a sharp advance, this correction has many chances to be sideways movement.

 After wave ((iv)) is done WOW should decline to new lows(below 29,12). But at the moment, short term trading opportunity is at hand, offering in excess of 5% price rise from current levels.


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## rimtas (6 January 2015)

seven7 said:


> Slowly and carefully is an individual thing.
> 
> I am comfortable with my choices - that's the careful part.
> Cheers






Hi Seven, 
and thank you for your reply 

I thought you just push the "buy" button very slowly and carefully


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## Triathlete (7 January 2015)

rimtas said:


> Today's low of 29,56 could mark the bottom for wave (b), which corrected fib 76,4% of wave (a). I would allow  for one more push down for better and more complete wave subdivisions, but market could rally from here in wave (c).
> 
> I expect that the entire correction of wave ((iv))(circled) will be some sort of sideways movement, resulting in flat(even expanded with new lows), or Triangle which could go into March.   Maybe it  will sport a Quashi Fractal copying a  previous wave (iv) of ((iii))(circled), resulting in Flat.
> Other options also available, and to tell in advance which one will occur is impossible until it's close to the end, but as wave ((ii))(circled) was a sharp advance, this correction has many chances to be sideways movement.
> ...





Thanks Rimtas for your current assessment on WOW.


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## rimtas (24 January 2015)

Wave (c) was a tough ride, but finally we are here.  It started with overlapping structure, and I was thinking that the entire wave ((iv)) will morph into a Triangle, but at this stage it appears that wave (c) is taking a shape of Expanding Ending Diagonal, with final subdivisions to ~$32 left.  It would also hit an extreme of wave (iv) of ((iii)) at the same level, so many resistance here. 

Later I expect a swift reversal to new lows, and if this happens, I will discuss alternate scenarios that could point to an ultimate bottom in WOW. 
  Technically wave ((iv)) could rise towards ~33, but the wave structure for reversal looks best now.


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## rimtas (16 February 2015)

The ongoing price action for WOW is flashing an alarm signal for the previous count, as the advance from 29.10 bottom looks too big to be the part of 3 wave in terms of time.  The key level is 33,11 which if breached throw the previous expectations for one more leg down to the bin, leaving the wave structure with 7 waves from 2014 Top, which is corrective. This means new ATH ahead with no new lower bottom.

Wave structure is unclear at the moment, but if the bottom is in, it looks best as a series first and second waves.  
I have WES in my portfolio and it tends to move more or less together with WOW from the most recent bottom of DEC 2014. WES wave structure is Impulsive and indicates higher prices ahead. 

I will wait a little bit as the situation should resolve soon-WOW either reaches 33,11 or start to decline from here, resolving a correct operative count.


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## nulla nulla (21 February 2015)

Woolworths closed on Friday at $33.26. Recently, Woolworths has been the beneficiary of a lot of support lifting the share price off the lows that followed the release of their First Quarter report. Last quarter the analysts deemed that the report wasn't good enough and recommended their clients sell. 





The Half Year Profit Report is due out on Friday 27 February. It will be interesting to see the analysts reaction as to whether they consider that the Woolworths sales and profit are up to expectations or not. Sometime I wonder what these professional analysts really expect, when a company the size of Woolworths can report market growth and increased profitability year in and year out but get bagged for not reaching some hypothetical analyst target. 

I wonder if the Elliot Wavers would like to forecast, before this Friday, the share price movement for the next few weeks?


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## rimtas (21 February 2015)

It is hard to forecast anything if there is no pattern upon which a forecast can be made.  Usually I do not go blindly and wait for the count to resolve itself before acting or making a forecast. 
One thing is clear-WOW overlapped with 33.11 level, and in this way it negated not even a medium, bet a long term structure as well.  It doesn't make much difference to the expected direction, just to labelling. And of course the fact that the bottom was missed.  


 I'll be going forward with the count bellow. What it needs now is to sport a "five" from the ~29 bottom. Only weekly chart shows that this can be happening now and WOW will enter into decline next few weeks, but in no way it can penetrate 29 bottom.  The problem with this count is that at lesser time frames than weekly the supposed (iii) wave has an overlap, so better is to wait for the count to resolve itself because there are too many alternatives at this point what could happen. 
RSI at the bottom of the chart clearly indicates that uptrend is forming.

There are few ways to label the decline from 2014 top because it is a 7 wave decline, but I'll go with the simplest ABC. And at this point it doesn't actually matter (labelling).

When making this analysis I just noticed that the ~29 bottom was at Fib 61,8% retrace level, how could I missed this?  This is a complete fail for me, because I usually manage to buy a stock no more than 5% from it's bottom, and in most cases this  doesn't exceed 1%. Well, maybe it will decline soon providing another opportunity, just higher.  I am happy that I've managed to buy other stocks back in Nov-Dec 2014 and my portfolio is well above +10% since then.


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## Triathlete (22 February 2015)

nulla nulla said:


> Woolworths closed on Friday at $33.26. Recently, Woolworths has been the beneficiary of a lot of support lifting the share price off the lows that followed the release of their First Quarter report. Last quarter the analysts deemed that the report wasn't good enough and recommended their clients sell.
> 
> I wonder if the Elliot Wavers would like to forecast, before this Friday, the share price movement for the next few weeks?





I am expecting price to find resistance at between $33.21 and $ 34.18 a natural resistance level also exists at $33.55. 

The down trend line is also an overhead resistance to price moving higher so it will be interesting to see what happens here and if we get a good result it may break through otherwise I would expect it to turn down and complete its wave C back at the lower levels as before.


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## rimtas (22 February 2015)

Hi Triathlete,
How you see your wave C subdivisions if WOW makes lower bottom? It can't be "five"(due to overlap), and it can't be Expanding Ending Diagonal as wave 1 and 3 (of your C) are fives.  
I see one scenario that could develop, as it would look better if that long term trendline is reached  https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=859904&viewfull=1#post859904

The entire structure could develop a 3-3-5 Flat, but the ~29 bottom is an ultimate target here. 
But probably it is just a bearish judgement which is a consequence of the decline and my limbic system tries to resist the fact that trend has changed and it is looking for alternatives instead of focusing on uptrend. Even my misses started to shop at Wollies last week, she did not shop here for more than 6 months(she said Coles were better).  I personaly think that 29 bottom will not be breached. I am looking forward to even slightest opportunity to buy WOW taking more risk than usuall.


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## Triathlete (23 February 2015)

rimtas said:


> Hi Triathlete,
> How you see your wave C subdivisions if WOW makes lower bottom? It can't be "five"(due to overlap), and it can't be Expanding Ending Diagonal as wave 1 and 3 (of your C) are fives.
> I see one scenario that could develop, as it would look better if that long term trendline is reached  https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=859904&viewfull=1#post859904
> 
> ...




Hi Rimtas,
               Yes the overlap has me confused in regards to the subdivisions of wave C that's why I did not put them on the chart. I am just using my price tables,50% retracement level and the overhead Trendline to base the call and just waiting to see how it will play out. If the Trendline is broken then I will need to reassess my opinions as my previous price tables showed no real resistance in price until back at the previous High.


----------



## Triathlete (23 February 2015)

rimtas said:


> Hi Triathlete,
> 
> I see one scenario that could develop, as it would look better if that long term trendline is reached  https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=859904&viewfull=1#post859904
> 
> ...




This is the scenario that I am hoping will play out now.One more move down as shown on your chart before heading back up towards the highs.Only time will tell!!


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## nulla nulla (23 February 2015)

While I find the Elliot Waves views interesting, I personally think they are a bit "hindsight" and it would appear that even Elliot Wavers can apply different interpretations as to what waves apply to the same charts. 

In my opinion, if you consider the Woolworths price movement for the past two years in respect of their growth and profitability, the only way you can explain a 20% price drop is negative feedback from analysts, guiding a herd driven sell off. Woolworths is still the market leader in the Groceries and alcohol retail sector (and hotels). Coles was a mess, was taken over and is making big inroads in improving their act and market share (realistically they only had one way to go) however, their gains have not been at the Woolworths expense.

The analysts that drove the share sell off pushed the share price down to a level where other analysts told their clients to buy (gotta love this game). Now the share price is climbing back to where it is only 10% down on previous levels and another quarterly report is due. 

Personally I don't see the share price "waving" down to sub $30.00 new lows. I suspect that , while the report may show a slowing growth, profitability will be at acceptable levels due to "price deflation" maintaining margins combined with a reduction in costs through improved in-store efficiencies. You would think that this, in a period of reduced public discretionary spending, is more likely to be well received by analysts than not. 

I suspect a share price climb to the range $34.50 to $35.50 is more likely than a leg down to sub $30.00.  Then again I'm not a financial adviser and second guessing analysts is even harder than second guessing the market. As always do your own research and good luck.


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## Triathlete (23 February 2015)

nulla nulla said:


> While I find the Elliot Waves views interesting, I personally think they are a bit "hindsight" and it would appear that even Elliot Wavers can apply different interpretations as to what waves apply to the same charts.




Yes EW is a subjective tool to use as one part of your analysis.

Rather than hindsight I prefer to call it " Trade on confirmation ,not speculation"


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## rb250660 (23 February 2015)

You bloke crack me up with your EW.


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## nulla nulla (24 February 2015)

Up $0.84 as I type ($34.16) on solid turnover. Curiously Wesfarmers went ex-div today but is down $0.35 more than the div.

Maybe someone has leaked the WOW report?


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## rimtas (24 February 2015)

nulla nulla said:


> While I find the Elliot Waves views interesting, I personally think they are a bit "hindsight" and it would appear that even Elliot Wavers can apply different interpretations as to what waves apply to the same charts.
> 
> In my opinion, if you consider the Woolworths price movement for the past two years in respect of their growth and profitability, the only way you can explain a 20% price drop is negative feedback from analysts, guiding a herd driven sell off. Woolworths is still the market leader in the Groceries and alcohol retail sector (and hotels). Coles was a mess, was taken over and is making big inroads in improving their act and market share (realistically they only had one way to go) however, their gains have not been at the Woolworths expense.
> 
> ...






Hi nulla nulla, 
I do find you fundamental analysis interesting, but I personaly think that it is a bit "wishfull thinking" and it would appear that every person applying fundamental analysis can find a different reasons for the stock to rise/decline from the same report/balance sheet.

When they do not understand why stock is not "reacting" to report and earnings as it supposed to, they just simply blame someone else, usually analysts and media reporters.  And they _just love_ to explain the past market movements. 
 I am really exiting when everyday I have a neverending opportunity to see how people are interpreting todays news to predict future trends.  And they always fail. And next day the same begins, as if they are just born in the morning again with no past memory whatsoever.  It is awesome! You gotta love this game when people try to find exogenous causes to the system that is operating only on endogenous ones. 

I am also exited when almost every post is ending with "I am not a financial adviser", "do you own research" and similar. It's like an excuse to your own opinion, which you think is most likely wrong,  so the post is wrapped in a probability frame that author can get out dry of the water later.  

Sorry if you find this a bit rude, but I just love when people concoct using market fundamentals as a basis for their entry/exit points or direction overall.  

In WOW case I found very funny the fact that analysts issued sell recommendation and the market indeed crashed. And when it crashed, they(analysts) predicted(again) that WOW profit will slide until 2017, that was close to the WOW bottom of $29. And even on this forum everyone took it very seriously...now when WOW started a new bull wave, analysts are ducks again....  It is just never ending fun


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## Julia (24 February 2015)

I'm not interested in WOW  at present, but if I were looking for some guidelines and sensible analysis, I'd be going for Nulla Nulla's remarks.


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## sptrawler (24 February 2015)

Julia said:


> I'm not interested in WOW  at present, but if I were looking for some guidelines and sensible analysis, I'd be going for Nulla Nulla's remarks.




The only interest I have in WOW is as a possible take over target.

Don't own any, but will buy sub $30.


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## Triathlete (25 February 2015)

nulla nulla said:


> Up $0.84 as I type ($34.16) on solid turnover. Curiously Wesfarmers went ex-div today but is down $0.35 more than the div.
> 
> Maybe someone has leaked the WOW report?





I would make this one assessment and I really only use volume when trading short term moves.

The share price has been moving up but on falling *weekly volume *over the past 4 weeks this would indicate that the move up is not really being supported and with an overhead trendline just above or at least where price is today I would be keeping an eye on it for any type of reversal in price.
If you have been on WOW for this last rise I would lock in the profits in my opinion short term at least if price does turn.

Price is also rising due to the dividend coming up same as what just happened to WES.


It is far better to see volume rising with share price rising this will at least give some confidence that the rise is being well and truly supported.


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## nulla nulla (25 February 2015)

rimtas said:


> Hi nulla nulla, ....
> When they do not understand why stock is not "reacting" to report and earnings as it supposed to, they just simply blame someone else........




I don't allocate "blame" I simply trade the opportunities that arise from market movements driven by herd mood swings.



rimtas said:


> ...I am also exited when almost every post is ending with "I am not a financial adviser", "do you own research" and similar. It's like an excuse to your own opinion, which you think is most likely wrong,  so the post is wrapped in a probability frame that author can get out dry of the water later.




I do tend to add a disclaimer of sorts to my posts as I would hate for anyone to make a financial decision based on my opinionated posts and subsequently lose their hard earned money.




rimtas said:


> Sorry if you find this a bit rude, but I just love when people concoct using market fundamentals as a basis for their entry/exit points or direction overall.




I don't find your comments rude, simply an expression of your opinion which you are entitled to do. As I said previously I find your EW views interesting and you do add quite a bit of detail to support your perspective. I also note that most predictions have an "either/or" perspective and a little caution.



rimtas said:


> In WOW case I found very funny the fact that analysts issued sell recommendation and the market indeed crashed. And when it crashed, they(analysts) predicted(again) that WOW profit will slide until 2017, that was close to the WOW bottom of $29. And even on this forum everyone took it very seriously...now when WOW started a new bull wave, analysts are ducks again....  It is just never ending fun




I'm not sure every one took the profit slide projections of some analysts seriously as other analyst were projecting a recovery at the same time. As I said above, I just trade the opportunities. And yes, it is fun.


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## tech/a (25 February 2015)

Bloody herd -----why cant they just do as the experts say!



> I also note that most predictions have an "either/or" perspective and a little caution.
> 
> I'm not sure every one took the profit slide projections of some analysts seriously as other analyst were projecting a recovery at the same time.




Hahahahaha


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## rimtas (25 February 2015)

nulla nulla said:


> I don't allocate "blame" I simply trade the opportunities that arise from market movements driven by herd mood swings.




That's the note from technician, and the words "herd" and "mood" are the fundamental basis of wave principle. I just wondering that maybe you are the undercover eliotician 
People using fundamental analysis deny the influence of the mood and the herd to them is the thing that can be manipulated with reports, analysts and news.  Like a stick in the wind-it leans where the wind blows.  
Elioticians on the contrary understand that market is the wind, and the rest is the stick.

Anyyway, I missed two great stocks to buy at the bottom- BHP and WOW.  They won't offer return I am seeking if I buy them now, so unless a big correction sets in, I'll leave them.


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## nulla nulla (25 February 2015)

rimtas said:


> That's the note from technician, and the words "herd" and "mood" are the fundamental basis of wave principle. I just wondering that maybe you are the undercover eliotician




I had to look that up.  An Elliotician appears to be some-one that uses Elliot Wave concepts as a basis to predict where the market (or a share) is going. Definitely not me .



rimtas said:


> People using fundamental analysis deny the influence of the mood and the herd to them is the thing that can be manipulated with reports, analysts and news.  Like a stick in the wind-it leans where the wind blows.  Elioticians on the contrary understand that market is the wind, and the rest is the stick. .




This is deep. A bit like the Kung Fu teacher instructing "Grasshopper". While I use F/A I can't deny the influence of "mood" and the "herd". The "mood" of the "herd" is so often influenced by analyst assessment of reports and news. Analysts come out with opinions that performance was above expectation and rate a company as a "buy" or "hold". However if their assessment is that the report or news is not up to expectations, the analysts can just as easily rate a share as a "sell" and their subscribers respond accordingly. 

A late  broker, who shall not be named, is credited with buying shares low, then publishing in his news letter that these shares are a "buy", then selling his previously purchased shares into a rising market. Or shorting a share then rating it in his news letter as a "sell", then buying back in when his clients had pushed the share price down. The herd simply followed his analysis and the market moved accordingly. 

I guess I see the "market" more as the movement of the herd rather than as the "wind" or the "stick". If the herd drives the share price too low (in my opinion), I see a buy opportunity and I will gleefully jump in for a trade. The trade can be same day, T1 or as long as it takes for me to exit with a profit I'm happy with. Sometimes I may have to wait longer than I care for for the "herd" "mood" to come back into sync with my perspective.  I don't jump in for long term holds (investing). I prefer to turn my capital over quickly and lock in returns. 



rimtas said:


> Anyyway, I missed two great stocks to buy at the bottom- BHP and WOW.  They won't offer return I am seeking if I buy them now, so unless a big correction sets in, I'll leave them.




Personally I'm not keen on BHP, I find it too difficult to follow. Being listed on two exchanges, with a buy back underway, a decoupling and a falling Iron ore price, I reckon there are better recurring opportunities else-where. Woolworths however seems to present recurring opportunities every time it issues a sales update followed by their half yearly or full year reports.


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## nulla nulla (27 February 2015)

The Woolworths Half Year Report is out as well as the Analyst Presentation. It will be interesting to see if the reports is above or below expectations and how the market reacts. 

With half an hour to go before open, the early indications are a sell down. Mind you at this point the match price of $31.80 is heavily influenced by one early seller of 155,000 shares with a nominated sell price of $25.00.


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## JellySausage (27 February 2015)

Down 9.4% to $30.75 today.

Starting to look juicy.


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## nulla nulla (27 February 2015)

Woolworths closed down $3.24 at $30.71. Wesfarmers finished down $1.59 also. Might be something more than just the negative report for Woolworths.?


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## JTLP (27 February 2015)

Saw this result coming (but not by this big of a margin!). It was clear that their home improvements not up to Bunnings in a big way and Big W was a problem child. The fact they also made a heap of staff redundant recently should have painted a clearer picture. 

Nulla - do you think Wesfarmers were brought down due to WOW's result? Seems the most plausible that the market is pricing in slower growth.


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## skc (27 February 2015)

JTLP said:


> Nulla - do you think Wesfarmers were brought down due to WOW's result? Seems the most plausible that the market is pricing in slower growth.




Yes... despite the fact that WES only reported last week. 

I guess if WOW was to start fighting harder, WES is going to get some bruises...


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## notting (27 February 2015)

They just have to come up with a down down campaign that was as happy and effective as Coles and they will slaughter them. Masters is a distraction but they should stick to their guns, make it hard for WES to leverage off it.
I don't know how bout We'll beat it by 5% on any super market item!


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## tech/a (27 February 2015)

JellySausage said:


> Down 9.4% to $30.75 today.
> 
> Starting to look juicy.




Why on earth would a Fundamental follower see WOW as juicy.
If fundamentals looks at Value and doesn't follow the herd then 
negative AND positive announcements are ignored?
OR
Is it just the negative ones.

Surely the total landscape of the Company is affected by earnings?
Its happened NOW.
So what buy up!!



> Might be something more than just the negative report for Woolworths.?






> I guess I see the "market" more as the movement of the herd rather than as the "wind" or the "stick".




This is not the herd----Is it?



> Woolworths however seems to present recurring opportunities every time it issues a sales update followed by their half yearly or full year reports.




So what is your view now?

My view is not a lot different to DEC 3rd.


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## nulla nulla (27 February 2015)

Wesfarmers hit an interday  high of $46.95 on 23 February 2015. They went exdiv on 24 February and have fallen by much more than the div. I suspect you may be right JCPL, in you suspicion that the market is factoring in slow growth although I thought that this would have been factored in. 

I felt that the Woolworths Report was presented in a very downbeat negative manner. The comparison of Dec 2014 with Dec 2013 figures highlighted the slow growth and drop in profit. However reading through the financials it appears that the second half of the year was stronger than the first half, suggesting their cost cutting efforts and management controls are starting to take effect. 

The market already knows that Masters will be a weight around Woolworths neck for some time to come, so this should already be factored into the price. It would appear that negative aspects in the economy, drop in real wages, increasing unemployment and a fall in consumer discretionary spending are painting a gloomy picture for the future of Wesfarmers and Woolworths and today the markets decided it was time to get out?


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## notting (27 February 2015)

nulla nulla said:


> Woolworths closed down $3.24 at $30.71. Wesfarmers finished down $1.59 also. Might be something more than just the negative report for Woolworths.?




The rest of the retailers are bottomed and breaking up.
TRS, HVN, SUL, JBH, MYR, PMV to name a few all kicking along.
It is a wild over reaction I dunno, never give up your one arm bandits I spose.
PS someone went sick on MTS at the close of play today!


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## coolcup (27 February 2015)

I think one of the bigger issues facing WOW and to a lesser extent Coles is the "fight to the bottom" on margins instigated by Aldi. In today's announcement, WOW mentioned that they need to invest more heavily in price (read match the competition and reduce prices) to maintain market share. A number of analysts called the increase in margins for the half year as "low quality" and "unsustainable" which again points to further margin erosion in the future. I think there is a big concern that the Australian grocery sector will follow the way of Europe and see margins drop significantly due to competition and general deflation - this, in my view, is impacting both WOW and WES.

Secondly, the weakness in Big W must have see through implications for Target and Kmart in my view. Again why WES has followed WOW in underperforming today.


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## tech/a (27 February 2015)

coolcup said:


> I think one of the bigger issues facing WOW and to a lesser extent Coles is the "fight to the bottom" on margins instigated by Aldi. In today's announcement, WOW mentioned that they need to invest more heavily in price (read match the competition and reduce prices) to maintain market share. A number of analysts called the increase in margins for the half year as "low quality" and "unsustainable" which again points to further margin erosion in the future. I think there is a big concern that the Australian grocery sector will follow the way of Europe and see margins drop significantly due to competition and general deflation - this, in my view, is impacting both WOW and WES.
> Secondly, the weakness in Big W must have see through implications for Target and Kmart in my view. Again why WES has followed WOW in underperforming today.




Thought Fundies would be all over this.

How about MASTERS
Oil price
Drop in Australian Dollar

I'm a techie!!


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## notting (27 February 2015)

coolcup said:


> A number of analysts called the increase in margins for the half year as "low quality" and "unsustainable" which again points to further margin erosion in the future.




Analysts are useless turds, who have never run and could never run a business or do anything but write crap and make the worst suggestions for performance you can imagine.  Their like film critics or music critics who do nothing but sh&t and eat and spew garbage.

Their 'analysts' it's another word for useless loser who can't do anything but analyze which isn't anything of the sort and is usually just speculation that rhymes with the status qua and what went before. If they could actually do anything they would be employed to actually do it.
I'll guarantee they were all positive on WOW prior to today.  Waist of space.


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## banco (27 February 2015)

notting said:


> Analysts are useless turds, who have never run and could never run a business or do anything but write crap and make the worst suggestions for performance you can imagine.  Their like film critics or music critics who do nothing but sh&t and eat and spew garbage.
> 
> Their 'analysts' it's another word for useless loser who can't do anything but analyze which isn't anything of the sort and is usually just speculation that rhymes with the status qua and what went before. If they could actually do anything they would be employed to actually do it.
> I'll guarantee they were all positive on WOW prior to today.  Waist of space.




Is that you Grant O'Brien?


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## Triathlete (27 February 2015)

Triathlete said:


> *I would be keeping an eye on it for any type of reversal in price*.




Well we certainly got the reversal today


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## qldfrog (27 February 2015)

Triathlete said:


> Well we certainly got the reversal today



yeap zoom past my SL; WES was better and was sold after a profit on price and some dividends to help as well;
was heavier in WES than WOW so this limited the pain
probably not that bad a deal now, will not rush to sell at that price but will not stay long for long


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## rimtas (27 February 2015)

nulla nulla said:


> painting a gloomy picture for the future of Wesfarmers and Woolworths and today the markets decided it was time to get out?




If you were an Elliott technician, you would not make those kind of speculation, especially for WES.  There is no such thing as a gloomy picture at all time high for WES, but it is right when gloomy picture is painted after the market has a significant fall (WOW), because falling prices make people feel pessimistic. WES was trading in a sideways correction since mid 2013, and not rising prices created the same effect as a crash for WOW-at the bottom of Intermediate Wave (2) there appears to be "gloomy". It is normal market behaviour on the onset of the major advance. 


WES just resumed it's uptrend and basically this is the last time to buy it for less than $46 in wave ((ii)). A gloomy outlook in a rising market is extremely bullish, it is basically the main fuel for wave ((iii)) to start after everyone who believes in fundamentals was kicked out of the stock because third waves can't rise with everybody on board, they are waves that "run on empty" and by surprise. 

For the textbook correction it would look best if WES wave ((ii)) could retrace 61,8%( to $42,8), and this could take up to few months. But it can take another steeper shot  in less time. As long as it is trading above trendline resistance from 2009 low, it is bullish. Market proved that it takes this resistance seriously. 
Socionomicaly, second wave after the major bottom carry even more gloomier picture that at the bottom itself, so don't be surprised if some really bad news come along for WES while wave ((ii)) is in progress. In fact, they could mark the higher bottom.





Unfortunately for fundamentalists the gloomy picture turns into rosy only when the entire Intermediate Wave (3) is finished at sub $100 levels in the years to come. Then they can point a finger to good results, positive recommendations and optimistic outlook. But it will be too late and rosy picture won't help to make any money, because bullish convictions will be already crystalized, resulting in a price reversal.






 WOW is approaching a major bottom and as expected is progressing in wave (C). C waves have a character of steep decline and fundamentals usually collapse here. It should take a form of "five" and ideally will end close to the previous bottom of ~$29, were opportunity for buyers will be presented again. 

I don't read any reports or results, because they don't have any value in forecasting future price direction, they are just the reflection of previous price movement and WOW is in a crash almost a year, so the context of any report is obvious...


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## RottenValue (28 February 2015)

rimtas said:


> I don't read any reports or results, because they don't have any value in forecasting future price direction, they are just the reflection of previous price movement and WOW is in a crash almost a year, so the context of any report is obvious...




WOW ....   I will contact my astrologer and see what she has to say


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## nulla nulla (28 February 2015)

tech/a said:


> Sorry about the delay been pretty busy.
> 
> *Click to Expand*
> 
> ...




You are suggesting that Woolworths will test $28.00 and possibly $24.00ish? Were you tempted to trade the price movement between 3 December 2014 and 27 February 2015?



tech/a said:


> Why on earth would a Fundamental follower see WOW as juicy.
> If fundamentals looks at Value and doesn't follow the herd then
> negative AND positive announcements are ignored?
> OR
> ...




My view is there is a good likelihood of a dead cat bounce (a possible trade opportunity) but it may not start until Tuesday/Wednesday allowing the market to dip further as the herd soaks up the negative media over the weekend and get their sells processed when the market re-opens next week. I suspect the bounce will be short lived and then the market could drift down to the recent low $29.00 ish where Technical traders will look for a double bottom. If it holds then there should be a sideways and upwards pattern re-emerge with the share price ranging between $29.00 and $33.00-$34.00.

If it doesn't hold $29.00ish then it is possible for the share price to test $26.00 at which point it will receive substantial long term investment support.

It appears that the biggest factor for the drop of WOW and WES yesterday was not the slowing growth, reduced profitability or Masters but the fact that Woolworths have signaled that they are going to take Coles head on in a price war. The market sees both companies as suffering from this (Qantas/Virgin etc).

As always, I use a crystal ball, windex and a soft cloth to forecast future price movements, so I may be totally wrong.


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## tech/a (28 February 2015)

No not tempted.
I trade futures.
But if I had an SMSF that was trading top 200 it may have come up
As a trade in that period.


----------



## McCoy Pauley (2 March 2015)

Took a look at the figures over the weekend.

By my calculations, full year EPS went backwards in the year ending 4 January 2015 compared to the year ending 30 June 2014 or, at best, was flat.

For a behemoth selling consumer staples in what is effectively a duopoly (even if one includes Aldi, Costco and Metcash, it's still an oligopoly), that is not a good sign.

I do wonder how sad Grant O'Brien is to see Jegen disappear back to Europe. To replace him, WOW has promoted the executive responsible for the outperformance of the Dan Murphy and BWS retail network to run food and liquor.

There's also been a shift in how WOW promotes its supermarket offerings, if one looks at the catalogues stuffed in the postbox. A much bigger emphasis on lower costs, etc than there used to be.

On the weekend just finished, I was speaking to someone who used to work at a supplier to WOW a little while ago. He reckons that WOW is the worst culprit at screwing over their suppliers - much worse than Coles, whom you could reason with. WOW were just ruthless.


----------



## fanger (2 March 2015)

I had a nibble at 29.50 today.


----------



## tech/a (2 March 2015)

fanger said:


> I had a nibble at 29.50 today.




Why?


----------



## Value Collector (2 March 2015)

McCoy Pauley said:


> Took a look at the figures over the weekend.
> 
> By my calculations, full year EPS went backwards in the year ending 4 January 2015 compared to the year ending 30 June 2014 or, at best, was flat.
> 
> ...




The numbers don't look that bad to me, The grocery and liquor performance was good.

the only drag on performance was the home improvement division and the inventory write down at Big W.

The write Down of Inventory relates to a stock clearance they are planning as they adjust their customer offering, this is likely a one off, outside of this the division made a profit, and when you take that out of the equation for the group the profits grew.

the home improvement division is running at a loss,  due to some stock clearance as they feel there way.

All up I am happy with the result, and the out look. I have it valued at around $34.69 fair value.

I wrote a September put for 3000 shares at $31.19, if that finishes in the money I will happily take the stock.


----------



## Triathlete (2 March 2015)

rimtas said:


> WOW is approaching a major bottom and as expected is progressing in wave (C). C waves have a character of steep decline and fundamentals usually collapse here. It should take a form of "five" and ideally will end close to the previous bottom of ~$29, were opportunity for buyers will be presented again.
> 
> 
> 
> View attachment 61771




Hi Rimtas

I am feeling more bearish on WOW at the moment and if the previous $29.11 is broken ( today price $29.29) then I feel that an initial target price of between $27.82 and $26.90 which  is (261.8 % wave B) by my calculation is likely.

My previous charts showed $31 , $29 and $26 as the strongest levels of support but not feeling at all confident with WOW at the moment. 

Cannot see anything positive from the technical to start buying yet.  Just sitting on the sidelines should be an interesting few weeks.....

your thoughts!


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## nulla nulla (2 March 2015)

This is really worth consideration. When the Woolworths 1st quarter results came out at the end of October 2014 the market savaged the share price pushing the value down from the close of 31 October 2015 of $36.00 to a low of  $33.11 on 4 November 2014, then it bounced back to the $34.63 open on 11 November 2014 from which point it fell. The subsequent negative analysis/analyst sell recommendations saw the share price drift/pushed down to an inter-day low of $29.11 on 17 December 2014, before it started to climb back.

The latest (first half) report saw the share price savaged from an inter-day high of $34.71 on 25 February 2015 to an inter-day low of $29.18, today 2 March 2015. This drop of $5.53 took only two (2) days from the release of the report where three months ago the drop from $36.00 to $29.11 ($6.89) took near enough six (6) weeks.

I suspect Woolworths has more to fall in the coming days/weeks as the analysts get their reports out and their clients re-act. Be wary of any dead-cat bounces.


----------



## rimtas (2 March 2015)

Hi Thriatlete,

I am scared, too. Almost to death. This freakin crash shaked out all bullishness from me, and to be exact from my limbic system. It just tries to prevent me from triggering a BUY button. But what changed exactly? Nothing. Week ago I expected this crash, I expected it to be five and I expected it to be steep. https://www.aussiestockforums.com/forums/showthread.php?t=3539&p=861825&viewfull=1#post861825






And amazingly, things are falling in line. At this point in time I see many signals that are pointing to a probable reversal soon. The most important  I think is this long term trendline, which market proved is a valuable resistance. 
 If it fails considerably, lets say drops below 28 and stays for at least a day here, I am out and will not return to this stock again for at least this year. ( In this case I don't see bottom neither at 26, nor at 24, and most likely below 20 in the years to come.  But this extreme bearishness is the result of most recent drop )

Back to bullish signal-the trendline runs through about *28,5* next few days. The previous Dec 2014 bottom is not important, as the resulting wave (B) was "three". So it can drop below and do not result in sell signal, on contrary, most likely it will be a BUY. 





The trendline in the above chart also produces a Fibonacci relationship between these major waves where Wave (C) would be in a Golden Ratio with Wave (A).  This will occur if WOW drops to *28,65*, and will have complete subdivisions







Looking at the anatomy of Wave (C), it looks like small 4th wave should develop soon, and then a small drop to *mid 28 *levels, resulting in one more recognizable pattern-when wave 3 is extended, waves 1 and 5 are equal in length.








One more market manifestation in waves formation are Fractals. I know that majority of people hear this first time, but in the years of my experience I've found them very reliable patterns, they usually are forming at the points of reversal, copying smaller 4th or B waves,  and if EW subdivisions are clear(like this time), I consider this very high probability.  Fractals do not say about the degree of the reversal-dead cat bounce or new bull wave, they just point that reversal is due. All it needs is a breaking point, a few daily candles Up.







It is very exiting that so many signals appeared out of the blue(there were none a week ago) and all of them are falling to one point in time and price(mid 28,5 this week).
Price action falls to trendline in five waves, having Fibonacci Ratio and producing a Fractal.

 I see it as an opportunity to BUY. But because I am scared, like the rest of the crowd, I will catch a knife with 400 shares at the levels I discussed above, and another 600 if small "five" develops in 15 min time frame after those levels were reached.  I do not remember any red realized positions in the last few years in my portfolio, hopefuly WOW will not break this trend. To realize a loss I must have a complete understanding that market proved I am wrong and crushed everything I see. If it happens, I'll run with loss.  Aleluja.


----------



## fanger (3 March 2015)

tech/a said:


> Why?




Why not.


----------



## SilverRanger (3 March 2015)

WOW should put their shares in next week's "Cheap, Cheap" catalogue too, maybe then people will pick up a share or two while doing their grocery shopping (and earn some Qantas flyer points). Bought some at market close yesterday, hoping for 29.11 to hold a bit and perhaps get some dead cat bounce in the next couple of days.

Since WOW's report, WOW is down 13.7%, while MTS down 6.7% and WES down 4.7%, I would expect MTS and WES to "catch up" a bit if the race to the bottom continues.


----------



## So_Cynical (3 March 2015)

SilverRanger said:


> WOW should put their shares in next week's "Cheap, Cheap" catalogue too, maybe then people will pick up a share or two while doing their grocery shopping




The first time i looked at WOW (a long time ago) it was $9, so going forward any price above that doesn't look cheap.


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## Value Collector (3 March 2015)

rimtas said:


> I am scared, too. Almost to death.




Really? It's just share price fluctuations.

Emotions can be your worst enemy.

 For all the TA analysis / tea leaf and chicken entrails reading you mentioned above, what has changed at the business level?

Spending more time understanding businesses fundamentals and the operations of the underlying businesses may help relieve you of the wild emotions you may experience when your focusing on the short term price movements of a stock.


----------



## Value Collector (3 March 2015)

So_Cynical said:


> The first time i looked at WOW (a long time ago) it was $9, so going forward any price above that doesn't look cheap.




I thought it was cheap when it dropped from a bit over $6 to $4.70 back in the 90's. I recommended my mothers friend buy some, she did (brave lady taking investment advice from a 16 year old) she still owns them, your $9 figure would have repulsed me, although as it turns out, $9 is indeed a very cheap price.

I think if we look back in another 15years, $29 will look just as cheap as your $9 looks today.


----------



## tech/a (3 March 2015)

Value Collector said:


> Really? It's just share price fluctuations.
> 
> Emotions can be your worst enemy.
> 
> ...




He's got it spot on bouncing off support.

What's changed.
AUD
Competition and that's always changing.
Obviously profitability.

Lots of opportunity with short term movements.
Funny mentals are just as much chicken entrails as tea leaves to the masses---unless your the CFO.
If you think everything you need to know about a business is in its balance sheet --- your as un informed as those who you think are ---Un informed


----------



## McLovin (3 March 2015)

Small market duopoly with very weak competitor = happy days

Small saturated market duopoly with strong competitor = not happy, Jan.

I think we started this discussion back in 2011 in this thread? Now the chickens come home to roost.


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## Value Collector (3 March 2015)

tech/a said:


> Obviously profitability.




the profitability of their core business increased, it's only a write down of stock at Big W and the home improvement division that were the anchors dragging down the NPAT.

and the NPAT was only down 3%, Hardly a reason to panic.


----------



## PennD (3 March 2015)

Value Collector said:


> Really? It's just share price fluctuations.
> 
> Emotions can be your worst enemy.
> 
> ...




I'm pretty sure he was taking the piss... Why would he be scared when he forecast it on a chart here just a week before...??? His "tea leaves" saw this coming almost to the dime.

Great work Rimtas!!!


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## tech/a (3 March 2015)

*This is amazing for 27/02 call.*


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## qldfrog (3 March 2015)

Value Collector said:


> I thought it was cheap when it dropped from a bit over $6 to $4.70 back in the 90's. I recommended my mothers friend buy some, she did (brave lady taking investment advice from a 16 year old) she still owns them, your $9 figure would have repulsed me, although as it turns out, $9 is indeed a very cheap price.
> 
> I think if we look back in another 15years, $29 will look just as cheap as your $9 looks today.



I was wondering what 5$ in the 90's would be in nowadays dollars->around 9.5$
http://www.rba.gov.au/calculator/annualDecimal.html
so not bad an investment if you add the dividends along the way...
but same as real estate some of these trends  may be hard to duplicate


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## rimtas (3 March 2015)

Value Collector said:


> Really? It's just share price fluctuations.
> Emotions can be your worst enemy.
> .



 Read between the lines, mate. It was a sarcasm. As an elliotician, I know better than anyone else how market affects emotions and what it means. 



Value Collector said:


> Spending more time understanding businesses fundamentals and the operations of the underlying businesses may help relieve you of the wild emotions you may experience when your focusing on the short term price movements of a stock.




Why spend at least a minute by reading fundamentals while focusing on a short term fluctuations? You think that if you made bad decision and your position is in the red, you just read a nice report and thus pain will go away?  Yes, it will help to relieve you of the wild emotions...read more and more until any size of the unrealized  loss won't matter anymore. Just don't forget that market is forming fundamentals of the company, not vice versa.


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## tech/a (4 March 2015)

fanger said:


> I had a nibble at 29.50 today.




Nibbling?


----------



## galumay (4 March 2015)

rimtas said:


> Just don't forget that market is forming fundamentals of the company, not vice versa.




LOL! Its funny to see how people form world views so diametrically opposed, I know it aint going to change but you really have to wonder. The absolute conviction of those in both camps to be certain they are right and the others are wrong is reminiscent of a religious belief - not only are the unbelievers wrong, but they will lose their souls (money) as well!!

From the side of the fence i sit on I just shake my head when I read stuff like this, but then I have seen enough of the head shaking from those sitting on the other side to realise they think we are all mad!

Not sure what the solution is, maybe we need 2 ASFs! A FA one and a TA one, the WOW thread is a good example for me, i click on it fairly often when i see its had posts made, but inevitably the posts over the last couple of months have had graphs and gobbly gook analysis that actually makes me laugh when i read it because i find it so ridiculous.

I am sure there are other company threads with an FA focus that cause the same reaction from the TA disciples.

Anyway I am dragging this off topic, but it does seem to be an endless debate and I dont think one person has been 'converted' from one belief system to another since the last holy crusade!


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## Julia (4 March 2015)

And then there are those of us who take something from both approaches.  Plenty of people will choose their universe of potential stocks on the basis of their sound fundamentals, but find an understanding of price action adds far more to their profitability than just focusing on what someone estimates 'should' be 'value' for that company.

I don't see any need to rubbish or deride any approach.  There are also going to be different aspirations at different times of life, whether generating an income from capital or alternatively regarding investing as a sideline interest whilst living on a salary when obviously it would be more realistic to take a longer term approach if that was what appealed to you.


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## galumay (4 March 2015)

Julia said:


> And then there are those of us who take something from both approaches.  Plenty of people will choose their universe of potential stocks on the basis of their sound fundamentals, but find an understanding of price action adds far more to their profitability than just focusing on what someone estimates 'should' be 'value' for that company.
> 
> I don't see any need to rubbish or deride any approach.  There are also going to be different aspirations at different times of life, whether generating an income from capital or alternatively regarding investing as a sideline interest whilst living on a salary when obviously it would be more realistic to take a longer term approach if that was what appealed to you.




I get where you are coming from Julia, but those who take some from both approaches are probably considered 'at error' by both sides!! For example, when you say "but find an understanding of price action adds far more to their profitability" it implies to me that price action is actually understandable and for it to be any use, able to be predicted with some level of certainty. That is completely at odds with my world view, and i am hardly on my pat malone there!!

The reality is there is a lot of derison and rubbishing goes on, and its not surprising given the almost religious fervour of attachment.


----------



## Ves (4 March 2015)

rimtas said:


> Just don't forget that market is forming fundamentals of the company, not vice versa.



My understanding is that you are referring to the _wealth effect_.   The hypothesis is basically that real or perceived increases in wealth  (ie.  from increased prices in the property or share markets) leads to increased consumption in the general economy and the inverse leads to decreased consumption. It does make intuitive sense in theory.

But it is interesting.... because economists reviewing actual data have been torn over this concept for a very long time. There are lots of studies out there,  but none of them are really that conclusive.   I would be interested if you could share some of the papers / research that influenced your position.

Here is an article from Forbes last year that outlines insights on the Wealth Effect concept,  both for and against:

http://www.forbes.com/sites/investopedia/2014/01/28/a-study-on-the-wealth-effect-and-the-economy/

I am sure that DeepState if he is reading this thread would be able to add a lot more than I could.


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## tech/a (4 March 2015)

There is a need for a discussion thread
*NOT T/A V F/A*
But a place where understanding of each can be shared.
Those interested should be able to share views over there.


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## rimtas (4 March 2015)

Ves said:


> My understanding is that you are referring to the _wealth effect_.
> .




Hi Ves, acctually never heard of that.  When I meant that market is forming a fundamentals i do not meant some sort of hypotesis, because this is a naked fact. Market in general is people, people go and buy stuff (simply put), creating wealth for a company and all the numbers in balance sheet.  It is simple as that.  When I said market, I don't meant ctock market, I meant the part of population who participate in economic activity.  So people's actions create fundamentals of the economy, company or any other stuff you buy and sell in financal markets.. 

I see that my TA stuff posts created some sort of turmoil and there are many unhappy people here about this, so my apologies on this. I do not want to be responsible if someone falls from the fence and breaks his neck.

From now on I will post my thoughts about market and any stocks only in Elliott Wave and XAO thread. 
https://www.aussiestockforums.com/forums/showthread.php?t=15355&page=20&highlight=xao

So meet you there. Problem solved.
Cheers


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## galumay (4 March 2015)

rimtas said:


> When I said market, I don't meant stock market, I meant the part of population who participate in economic activity.  So people's actions create fundamentals of the economy, company or any other stuff you buy and sell in financal markets..




Well there you go, shows the danger of making assumptions!! I for one also thought that you were suggesting the stock market, creating the fundamentals. My bad, apologies! 



> I see that my TA stuff posts created some sort of turmoil and there are many unhappy people here about this, so my apologies on this. I do not want to be responsible if someone falls from the fence and breaks his neck.
> 
> Cheers




I dont think thats the case, and i dont think you need to apologise, i was reflecting on the different world views we hold, and my total misunderstanding of your post added to that. I dont think you should have to go and post anywhere else, at least half of the members likely share your world view and will be very interested in your analysis.

Perhaps more to the point my post should have been posted elsewhere, rather than doing exactly what i have accused others of, and hijacking a thread to my own purpose.

The internets is not always the best form of communication and I am sorry if my ramblings have caused you offence.


----------



## Julia (4 March 2015)

galumay said:


> I get where you are coming from Julia, but those who take some from both approaches are probably considered 'at error' by both sides!!



I don't know.  I personally don't consider anyone 'at error'.  We should all find a place which works for us.   People taking what is useful from each approach would seem to indicate a mindset more open to what is possible than people who say "oh, only my approach works so everything else is laughable."



> For example, when you say "but find an understanding of price action adds far more to their profitability" it implies to me that price action is actually understandable and for it to be any use, able to be predicted with some level of certainty.



I don't want to be discourteous, galumay, but you are putting your own definition on 'price action',  I have never seen anyone claim that they can accurately predict what price will do.



> That is completely at odds with my world view, and i am hardly on my pat malone there!!



Let's not continue to derail the WOW thread, but you give the clear impression that you give no credit to the experience, knowledge and *profitability* of many of the people here who take an approach different from your own.  That, of course, is your right but it seems an unnecessarily narrow view.


----------



## nulla nulla (4 March 2015)

Julia said:


> And then there are those of us who take something from both approaches.  Plenty of people will choose their universe of potential stocks on the basis of their sound fundamentals, but find an understanding of price action adds far more to their profitability than just focusing on what someone estimates 'should' be 'value' for that company.
> 
> I don't see any need to rubbish or deride any approach.  There are also going to be different aspirations at different times of life, whether generating an income from capital or alternatively regarding investing as a sideline interest whilst living on a salary when obviously it would be more realistic to take a longer term approach if that was what appealed to you.




Thank you Julia. The forum should applaud your calm objectivity and even handedness. F/A, T/A and E/W. Sifting through the "value" , "price action" and views expressed , while generating income, protecting investment and all the time showing respect for the opinions of others.



tech/a said:


> There is a need for a discussion thread
> *NOT T/A V F/A*
> But a place where understanding of each can be shared.
> Those interested should be able to share views over there.




Surely this thread is as good as any other, given this thread is where all the out pouring of opinions is actually happening?





And to throw my two cents into the pot, here we are at $29.00 ish (again) and the t/a question has to be whether wow can bounce off this point, as a support level (double, triple bottom, whatever), or whether the "herd" mood (analyst driven) is so negative, wow will now trend lower to tests new lows? Well?


----------



## DeepState (4 March 2015)

Ves said:


> ..._wealth effect_....




That's almost certainly one pathway through which actions are affected by price movements or perceptions about future profits.  Whilst such things influence a person's actions, other matters are generally more overwhelming (incl 'animal spirits' apart from the wealth effect although these can be hard to disentangle).  People effect economic fundamentals.  These, in turn, effect people.  People also effect people. Then the way it all comes together impacts outcomes as well.  eg, If the nature of banking changes, the way in which this all works out changes.

This has been shown to create some degree of over-reaction in financial variables which, maybe, could be a basis in support of EW in terms of the fact that price pathways tend to zig-zag in a way which mean reverts to some degree.  As for the precise specifics of EW... and what it means for T/A or F/A...  all the best with it everyone.


----------



## tech/a (4 March 2015)

> Well




Volume dropping as the bottom is being tested.
The longer the consolidation at these levels continues the more bullish it will be.
Corrective moves generally take 3 legs ABC.
So far A

If we don't get a rise toward filling the gap then A is still forming
Not good for the depth of this correction.
Current bar is not showing supply nor demand.
The first 2 bars are similar in range with falling volume.
No supply----
Very high volume bars reverse for a period just about every time.
The depth of reversal and the length of consolidation will set the scene going forward
But from what I CURRENTLY see this has some more correcting to do.


----------



## Triathlete (4 March 2015)

nulla nulla said:


> And to throw my two cents into the pot, here we are at $29.00 ish (again) and the t/a question has to be whether wow can bounce off this point, as a support level (double, triple bottom, whatever), or whether the "herd" mood (analyst driven) is so negative, wow will now trend lower to tests new lows? Well?




I personally will be waiting for some clearer signs as to which way WOW will move.

 I can only see it moving between the trend lines at present and will be waiting for a break on either side before making a more informed decision. 

Although I will say that it is still in a downtrend and has been since May 2014 and nothing has changed yet.


----------



## nulla nulla (5 March 2015)

The daily turnover is returning to normal levels. However the share price has gapped down from the moving average by about $1.70. The last three days has seen trading ranging between $29.20 to $29.80 (give or take a couple of cents). It is possible that the fully franked dividend of $0.65 is drawing in some investors which in turn is under pinning the share price. 




I snuck a small trade in, buying at yesterdays close of $29.35 and selling into todays close at $29.83. I will be looking for a re-entry tomorrow, particularly if the price dips anywhere near $29.40. I also picked up another small parcel yesterday at $29.62 which we will likely hold for the combination of the dividend and (if necessary) a longer hold for the capital gain combo.


----------



## UMike (10 March 2015)

nulla nulla said:


> The daily turnover is returning to normal levels. However the share price has gapped down from the moving average by about $1.70. The last three days has seen trading ranging between $29.20 to $29.80 (give or take a couple of cents). It is possible that the fully franked dividend of $0.65 is drawing in some investors which in turn is under pinning the share price.
> 
> ....
> 
> I snuck a small trade in, buying at yesterdays close of $29.35 and selling into todays close at $29.83. I will be looking for a re-entry tomorrow, particularly if the price dips anywhere near $29.40. I also picked up another small parcel yesterday at $29.62 which we will likely hold for the combination of the dividend and (if necessary) a longer hold for the capital gain combo.



How'd you go.

In a moment of madness(????) I snapped up a decent parcel today.
Ex Div tomorrow.

Time will tell.


----------



## nulla nulla (10 March 2015)

UMike said:


> How'd you go.
> 
> In a moment of madness(????) I snapped up a decent parcel today.
> Ex Div tomorrow.
> ...




I unloaded the second parcel at $30.03 the following day locking in profit. Tried for a re-entry in todays close with a bid of $29.35 but got knocked out in the dying seconds of the auction when the match price jumped to $29.36. Will watch the action tomorrow, I thought the ex-div date was later in the month, 18 March 2015?


----------



## sptrawler (10 March 2015)

nulla nulla said:


> I unloaded the second parcel at $30.03 the following day locking in profit. Tried for a re-entry in todays close with a bid of $29.35 but got knocked out in the dying seconds of the auction when the match price jumped to $29.36. Will watch the action tomorrow, I thought the ex-div date was later in the month, 18 March 2015?




I thought the same nulla, hoping for a big push down, before ex dividend date.


----------



## UMike (11 March 2015)

nulla nulla said:


> I unloaded the second parcel at $30.03 the following day locking in profit. Tried for a re-entry in todays close with a bid of $29.35 but got knocked out in the dying seconds of the auction when the match price jumped to $29.36. Will watch the action tomorrow, I thought the ex-div date was later in the month, 18 March 2015?



 Yea the Westpac Broking site just agve me another reason to find a better platform to trade. 18/3/2015 is correct.


----------



## sptrawler (13 March 2015)

In today at $29.30, knowing my luck $27 on Monday.lol
Only joking ex dividend wednesday, hope to see price surge mon/tues.


----------



## notting (13 March 2015)

sptrawler said:


> In today at $29.30, knowing my luck $27 on Monday.lol
> Only joking ex dividend wednesday, hope to see price surge mon/tues.




So you will be selling sometime Tuesday at the latest?


----------



## sptrawler (13 March 2015)

notting said:


> So you will be selling sometime Tuesday at the latest?




If there is a couple of dollar lift, yes, otherwise take the dividend and sit.


----------



## pinkboy (13 March 2015)

If there isn't sufficient 'lift' in the next 2 trading days,  $29 could be tested.  It's currently not in ideal territory to be mucking about just for the dividend.

pinkboy


----------



## sptrawler (14 March 2015)

pinkboy said:


> If there isn't sufficient 'lift' in the next 2 trading days,  $29 could be tested.  It's currently not in ideal territory to be mucking about just for the dividend.
> 
> pinkboy




Depends how much you need dividends and the associated risk. Long term, WOW have generally been trading between $29 - $33, my assumption is they will continue to do so.
Obviously that is, unless some really bad news is forthcoming, but as we all know there are no sure bets in the share market.
People still have to eat and WOW have a big footprint. Their model may need tweaking, but that is the case with most business models from time to time.


----------



## UMike (14 March 2015)

sptrawler said:


> In today at $29.30, knowing my luck $27 on Monday.lol
> Only joking ex dividend wednesday, hope to see price surge mon/tues.



I'm expecting it to trade slightly lower on Monday. I'm hoping to pick some more up.
Ex Dividend will see it move well below the $29.00 mark.

A long term trade imo.


----------



## sptrawler (15 March 2015)

UMike said:


> I'm expecting it to trade slightly lower on Monday. I'm hoping to pick some more up.
> Ex Dividend will see it move well below the $29.00 mark.
> 
> A long term trade imo.




From my perspective being self funded, WOW is one of the lower risk shares IMO, and with their dividend around 5% seems better value than term deposit.
Also with the ongoing downturn, WES and WOW appear to be up there with the banks, for stability.

You have to park your money somewhere, in these times of uncertainty and when you are dependant on it for income, a modicum of safety is required.


----------



## nulla nulla (8 April 2015)

Woolworths seems to be finding support around the $29.00 level, give or take a few cents.


----------



## Triathlete (9 April 2015)

nulla nulla said:


> Woolworths seems to be finding support around the $29.00 level, give or take a few cents.




You might be right Nulla Nulla.

However from a technical view both the weekly and monthly charts are still both down so from a medium to longer term view I would not be in any hurry to jump in just yet unless you are interested in short term trading the stock. 

It will be interesting to see what happens over the next 3 months to WOW.


----------



## Triathlete (10 May 2015)

Triathlete; said:
			
		

> Hi Rimtas
> 
> I feel that an initial target price of between* $27.82 and $26.90 *which  is (261.8 % wave B) by my calculation is likely.
> 
> ...




Rimtas Now that we are at $27.38 what are your latest views on WOW from here?


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## tech/a (11 May 2015)

All as plan from my December post.


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## Triathlete (11 May 2015)

tech/a said:


> All as plan from my December post.




Tech/a

So from a technical  view as we stand at the moment where do you see a possible bottom at present?
I am thinking that with the negative sentiment on the stock it may keep going through the $26 level as well?


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## tech/a (11 May 2015)

Triathlete said:


> Tech/a
> 
> So from a technical  view as we stand at the moment where do you see a possible bottom at present?
> I am thinking that with the negative sentiment on the stock it may keep going through the $26 level as well?




Not a bottom but target
Between $23-$24


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## Muschu (11 May 2015)

tech/a said:


> Not a bottom but target
> Between $23-$24




Probability or possibility? Massive difference.


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## Triathlete (11 May 2015)

tech/a said:


> Not a bottom but target
> Between $23-$24




Thanks Tech/a

A target price is a better word I do not see a bottom for WOW yet either.

what do they say " never try and catch a falling knife"

I think this may be WOW at the moment.


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## nulla nulla (14 May 2015)

Woolworths share holders would be pleased to see yesterdays price jump of $0.73 to close at $28.50. Seems some of the larger shareholders are pushing for former CEO Roger Corbett to be appointed to the board of directors, possibly as Chairman, as a replacement for the retiring Bob Emery (due to retire in November).


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## Value Collector (3 June 2015)

I have been listening to the investor day webcast, and I think Woolworths is making some pretty good stratergy moves, you can already see some of the progress at their stores.


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## luutzu (4 June 2015)

nulla nulla said:


> Woolworths share holders would be pleased to see yesterdays price jump of $0.73 to close at $28.50. Seems some of the larger shareholders are pushing for former CEO Roger Corbett to be appointed to the board of directors, possibly as Chairman, as a replacement for the retiring Bob Emery (due to retire in November).




You know that quote isn't really Roosevelt's? It's attributed to him but he said he quoted it from a West African saying.

Oh yea WOW... I couldn't detect any drastic problem with it. Slightly less sales, slower inventory turnover... but these are to be expected in business now and then. The price was ahead of itself since, from memory, 2012... but its current price is fairly reasonable now - not cheap but fair.


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## nulla nulla (4 June 2015)

luutzu said:


> You know that quote isn't really Roosevelt's? It's attributed to him but he said he quoted it from a West African saying.....




While this is probably not the correct thread to follow a question as to the accuracy of the origin of my "signature" quote, here is a link to Wikipedia casting doubt on the alleged West African proverb.

http://en.wikipedia.org/wiki/Big_Stick_ideology

Mean while, on topic, I can't say that I am happy with the current share price of Woolworths $27.10. It would appear that a lot of investors have lost faith with the Woolworths directors and the CEO Mr O'Brien. The Masters investment is increasingly being seen as a (costly) mistake. 

The failure of the board and management to concede it was a mistake is dragging the share price down. Seems like it might be time to cut some directors and management loose and inspire some confidence again. 

If they could admit that "Dick Smith Electronics" was a mistake why are they unable to see the error of their foray into Masters? They should stick to Groceries, Hotels and Alcohol.


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## Triathlete (4 June 2015)

Triathlete said:


> I am feeling more bearish on WOW at the moment and if the previous $29.11 is broken ( today price $29.29) then I feel that an initial target price of between* $27.82 and $26.90 *which  is (261.8 % wave B) by my calculation is likely.




Looks like my previous post 593 on the 2/3/2015 is proving correct and no end in sight yet for WOW!!!

My worst case had been $26...... but Tech/A target of $23 -$24 may yet prove correct only time will tell...some interesting times ahead for WOW shareholders.


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## skc (4 June 2015)

nulla nulla said:


> While this is probably not the correct thread to follow a question as to the accuracy of the origin of my "signature" quote, here is a link to Wikipedia casting doubt on the alleged West African proverb.
> 
> http://en.wikipedia.org/wiki/Big_Stick_ideology
> 
> ...




It turns out that selling Dick Smith was as much a mistake as having it...

I think the problem with Woolies is not limited to Masters. The problem is that, back in the days there was a believe that Australia is such a small country with unique population spread and density characterisitcs, that duopoly is the perfect status quo for many industries. Woolies has the highest margin of all supermarkets in the developed world (sorry I can't remember the source). But has the world evolved to make globalised competition more real now? ALDI has destroyed all lazy incumbents across its expansion paths. Is Woolies becoming the Australian Tesco? That's what weighing on the share price imo.


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## McLovin (4 June 2015)

McLovin said:


> Something I noticed when I did a bit of research on WOW was the decline in revenue/$ of PP&E.
> 
> I guess they're just not getting out of their stores what they used to...
> 
> ...




Ahh...



McLovin said:


> Dick Smith is the same as Radio Shack in the US. There was a time when hobby electronics was big (I remember having a CB radio when I was in year 7, then I discovered girls!). Technology more or less killed off hobby electronics; why build what you can buy for cheaper. Radio Shack now survives on selling phone contracts, DSE will probably too, eventually.
> 
> On the positive side, the DSE website is actually very good (pricewise and layout). They must have huge overheads because of the large store network but they still compare well with online only retailers. As a stand alone business with the right owner they could probably have a very successful online business with maybe a few showroom stores (not the 390 they have now).




Ehh???


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## luutzu (4 June 2015)

nulla nulla said:


> While this is probably not the correct thread to follow a question as to the accuracy of the origin of my "signature" quote, here is a link to Wikipedia casting doubt on the alleged West African proverb.
> 
> http://en.wikipedia.org/wiki/Big_Stick_ideology
> 
> ...




Follow the reference from wiki and the guy basically said he doubt it's West African, couldn't find it and Roosevelt probably made it up but wanted to sound well read. Who knows but I'd take the author's claim that it's not his over some dude's opinion that it must be his.

----

With WOW. I don't see anything drastically wrong with it.

It might've paid its supplier a couple days earlier than usual, but its cash cycle are still good.
Inventory is slightly higher than couple years ago but doesn't seem like sales is deteriorating... could just be due to the Masters inventory.

ROE looks 1 to 2 percent lower, so you could project that to a steeper decline but it's still in the high 30s, that and given its dominant position and current problem... 

ROC is good and steady or growing... profit margin is steady as it has for a while, though not as nice as it used to be back in 2005. Operating cash is good; took on some borrowing last year but who wouldn't if they can; 

The thing that might disappoint would be sales growth - growing at 3.86 instead of 6.45% the year before... but that's to be expected, and it's within its range since GFC.

If you look at WalMart at the time Buffett bought a truck load of it, he might have overpaid for WMT in relation to WOW right now. Just slightly


I haven't bought WOW yet but with all the bad news and sentiment... that and the good chance that I might be missing something when I am not ready yet to dig deeper to verify... so let's wait and see.

Who knows, Corbett might return bringing the Waltons with him.


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## Triathlete (5 June 2015)

Hi all,
         Just updated my own analysis on WOW chart.
I have  my  summary on the chart
All comments and feedback welcomed.

Cheers
Triathlete


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## rimtas (15 June 2015)

As the time passes, the pattern start to emerge. I have quite a good understanding now what could develop from all those overlapping waves from 2014 Top. 

To confirm my suspicions, short term WOW must collapse fast after passing the Point of Recognition area. If this short term scenario realizes, I will update the long term EW count and the most likely bottom targets, which could take place in the next few months and be close or slightly below GFC lows.


There is a massive divergence in price momentum even in a weekly time frames(not shown),suggesting that a setup for reversal is there already, so this wave down should be the last and end the entire decline from 2014 Top of $39.


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## nulla nulla (17 June 2015)

Mr Grant O'Brien negotiates his resignation. The initial market re-action was a share price jump of almost 2%, however the share price faded during afternoon trading to finish the day down $0.04c. All Woolworths needs to do now is replace the board of directors.

How pathetic are they in that, given how bad things have been going under O'Brien, they didn't have a succession plan in place?

Seems they need to bring someone like the former CEO Mr Corbet onboard the board of directors to get the ship back on course.


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## keylargo (18 June 2015)

Ko Ko said:


> Hey all,
> I have been following woolworths for a while now and keen on investing in this company some time soon. I am looking at its general purpose financial statements and a bit concerned about its current ratio and its debt to equity ratio. I understand that woolworths has a high inventory turnover so that might explain why the current ratio is so low. Another warning sign for me is that the new ceo. The previous ceo made huge growth over the years and I have doubt on the ability of the ceo to take off and continue to make the company grow. Can any other people in the market shed some light. Im quiet keen on investing but have my doubts. I just need some more opinions.
> Thanks






Kauri said:


> Looks to me that WOW *may* just be finding a bottom.. will need a bit of confirming action yet but it goes from my watch portfolio to my possibles one.. then *if* it shows signs of changing trend it's into the probables..




I think it's time to BUY, pls refer to the latest news on the link below:

Merrill Lynch tips Woolworths shares to soar after shake-up

http://www.smh.com.au/business/merr...-shares-to-soar-after-shakeup-20150618-ghqv6m


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## ROE (18 June 2015)

Too early to tell when darling fall from grace they quick to upgrade but history usually tell a different story

The time to buy is when a few more down grade comes along, more write off and the market lose hope -

By that time there are more dynamic at play and wow may not be a good investment at that time but
We only know when we get there


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## tinhat (19 June 2015)

This is in an interesting category for me, because I bought WOW a few years ago for my mother's don't touch, long term portfolio (aiming for better return than bank deposit over the long term). Do I put a stop loss in at break-even price? Probably will. But then, that is probably the moment the price will turn. The philosophy is don't touch but every swan sings its song.


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## Triathlete (19 June 2015)

tinhat said:


> This is in an interesting category for me, because I bought WOW a few years ago for my mother's don't touch, long term portfolio (aiming for better return than bank deposit over the long term). Do I put a stop loss in at break-even price? Probably will. But then, that is probably the moment the price will turn. The philosophy is don't touch but every swan sings its song.





Hindsight is a wonderful thing.....!

In my opinion... 
                        WOW is a good example of why investors need to take a more active role in managing there portfolios rather than the buy and hold long term strategy.

Stocks move  down as well....many who understood that WOW was in a downtrend would have got out a lot earlier and have now been waiting until it finds a major support level to get back in and have more stock than they previously owned for the money and may present good long term buying...

I mentioned in a NOV 14 post that
due to WOW entering an ABC correction phase that $26 was a worst case scenario  but
 who knows if that is going to be the end of the downtrend. Time will tell...some are now saying $23-$24 but is that the end????

I remember in the early 90's that the same thing occurred at Westpac and took quite a number of years to recover the same thing looks like happening at  WOW.

I guess we will all have to see how this is going to play out....


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## Triathlete (19 June 2015)

Triathlete said:


> If price does not hold at $31 or $29 then its coming back all the way down to $26!!!




Is it going to stop here??????????


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## Triathlete (19 June 2015)

nulla nulla said:


> At which point I would rate it a "screaming buy and hold".




Are you getting ready Nulla Nulla???


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## sinner (19 June 2015)

Triathlete said:


> Hindsight is a wonderful thing.....!
> 
> In my opinion...
> WOW is a good example of why investors need to take a more active role in managing there portfolios rather than the buy and hold long term strategy.
> ...




The thing is though, (disclaimer, I hold a very small amount), buy and holders of WOW are not really seeing it as in a downtrend because they are looking at the total return.

Taking your advice from the unadjusted chart means you aren't seeing the real picture.

What you think is happening:




What has actually happened:


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## Triathlete (19 June 2015)

sinner said:


> The thing is though, (disclaimer, I hold a very small amount), buy and holders of WOW are not really seeing it as in a downtrend because they are looking at the total return.
> 
> Taking your advice from the unadjusted chart means you aren't seeing the real picture.




I do not know about you sinner, but when I buy stocks I am looking for capital growth and dividends are the icing on the cake...

I certainly do not like to see capital being eroded especially if you were smart enough to ride the previous trend to the $39 level.

 Long term holders of WOW.... to still have been holding it just for dividend while your capital is going down is not the best way to either manage your portfolio or get the best returns.

In my opinion if you did ride the last trend to $39  even a 15% stop loss would have got you out at $33 (a company such as WOW has obviously got problems falling this far) it would have saved some of your returns of the previous years and having the knowledge that WOW was showing signs that  further falls was likely as I had 
mentioned back in November 14.

Those investors would have protected some of there capital and now if they like WOW could get it for a cheaper price almost $7 from $33.we are almost at $26 which I had on a previous post.

I also understand that most people do not have the skill level and rely on brokers reports etc,etc.

I will tell you what happens these reports tell people to hold WOW for the long term so that we do not see a stampede to the exit doors which helps hold the price up long enough for the Fund managers and professional investors and traders
to start off loading there holdings at these higher prices knowing full well the price is on the way down  but they do not want to scare the markets as they have millions invested so it takes them months to get rid of there holdings at the higher prices and the poor retail investor with no knowledge or experience see his capital going down...but that ok because I am still getting my dividend!!!!!  more financial _rap that people are fed

 and then when everything settles months or years down the track they get back in when the sentiment has changed and WOW has sorted themselves out we start moving in an uptrend again.

Just because someone may have picked up WOW at $10 years ago and saying I am still in front today is not the way to manage money imo. when we are seeing obvious problems with WOW and capital being eroded,we want capital to grow going forward that's not going to happen any time soon from from I can see....


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## ROE (19 June 2015)

When things don't go right bring in the consultants and pay them handsome price, what are we paying management for? I have little faith for upper management when this happen.
I don't hold or short  just watching and learn 

http://www.afr.com/brand/rear-window/woolworths-mckinsey-costs-top-45-million-20150618-ghribk


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## rimtas (19 June 2015)

I am tracking the Expanding Diagonal Pattern which at this stage appears the most likely scenario for WOW. 

All motive waves within are 5-3-5 with the last C wave in Progress, which must also be a "five". Ideally Prices would reach the lower trend line somewhere in $20-23 area depending on the time, but this is not a mandatory development for the Diagonal to be considered as completed.  A massive divergence in most time frames just confirms that the decline is nearing an end.







The question is-can it be completed now? The answer is yes. Main requirement for the market is to sport five waves down from the Wave B top (~$30). The Ending Diagonal as wave C is also considered as "five" and can point that the bottom is in or very close. Rising in explosive manner above $30 would confirm the count, but note that this small ED could also be just a FIRST wave of wave C-in this case it will fall short of $30 area an collapse much lower. The other alternate bearish scenario is presented a few days earlier, which is still not denied.

But overall, compared to early 2014, situation is bullish-WOW fundamentals started to catch up with market mood which is reflected in the decline. Media also started to catch up presenting articles like this one explaining why average Joe turned it's back on Woolies  http://www.smh.com.au/business/reta...and-aldi-over-woolworths-20150617-ghq1zg.html , when in reality, they turned their backs long time ago when the price was hovering around $39.
The more it goes down, the more bullish it gets. Basicaly for long term holders it's a Buy (and accumulate) at this stage, but I personally will wait for a more clearer picture as my trading horizon is usually less than a year, targeting just One Impulsive Advance.


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## Triathlete (22 June 2015)

Triathlete said:


> I do not know about you sinner, but when I buy stocks I am looking for capital growth and dividends are the icing on the cake...
> 
> I certainly do not like to see capital being eroded especially if you were smart enough to ride the previous trend to the $39 level.
> 
> ...





I thought I would add this to my comments above from a professional trader that I had read and maybe if there are some people from the industry can verify a statement like this below...

Your job as a trader is to *predict the future*, thus predicting what will be in the newspaper 6-12 months time.

*Professional traders* buy or sell assets now, so that in 6-12 months time when the news becomes mainstream and the story is over, they can use the liquidity of the traders that are "late to the trade" ( retail traders) to get out.


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## SilverRanger (22 June 2015)

rimtas said:


> I am tracking the Expanding Diagonal Pattern which at this stage appears the most likely scenario for WOW.
> 
> All motive waves within are 5-3-5 with the last C wave in Progress, which must also be a "five". Ideally Prices would reach the lower trend line somewhere in $20-23 area depending on the time, but this is not a mandatory development for the Diagonal to be considered as completed.  A massive divergence in most time frames just confirms that the decline is nearing an end.
> 
> ...




That's a lot of words and charts to say you are staying on the sideline and consider buy when it drops more =)

To me WOW is just a case of the market pricing in its threats from Aldi and the like and it can no longer maintain the margin it used to have. Would things really  be any different after replacing their CEO, CFO etc?


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## rimtas (22 June 2015)

SilverRanger said:


> That's a lot of words and charts to say you are staying on the sideline and consider buy when it drops more



Those words are just a simple analysis of what could happen to the price of WOW. 
Analysis and trading are two different things, as first involves analytical thinking of _what could happen_,  and the other is a batle with your own beast inside your brain that sees _what is happening._.
Connecting those two is a hard job, that requires a lot of training/practice/experience(with real money in real markets).


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## notting (22 June 2015)

What's really happening is what the charts are indicating.
When they start to indicate a turn, you can turn the story in your head back on and ride your own bias to bullion.
It's going in on your story before the tide has turned that screws you up.


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## Triathlete (23 June 2015)

notting said:


> What's really happening is what the charts are indicating.
> When they start to indicate a turn, you can turn the story in your head back on and ride your own bias to bullion.
> It's going in on your story before the tide has turned that screws you up.




So what you are really saying is let the market / chart tell you where it is going first (*wait for confirmation do not speculate*) do not get into the trade too early,
it does not matter if you miss the first 5% -10% of a move as long as you pick up the next 80%???


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## rimtas (23 June 2015)

notting said:


> What's really happening is what the charts are indicating..




At least now they are not indicating a turn-impulsive advance failed to develop from the last bottom.  End of story.


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## galumay (23 June 2015)

Triathlete said:


> So what you are really saying is let the market / chart tell you where it is going first ....




I doubt that is what notting is saying, it implies that the chart of what has happened already could somehow tell you what is going to happen in the future! We would all be millionaires if past performance was an indicator of the future.


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## rimtas (23 June 2015)

galumay said:


> We would all be millionaires if past performance was an indicator of the future.




Past performance in  financial markets indicates the path traveled. If you understand the method upon wich that path was developing, you could anticipate how it will develop from any given point. So yes-past performance indicates future. But this has nothing to do with becoming a millionaire, because seeing the path and walking it are two different things.


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## galumay (23 June 2015)

rimtas said:


> Past performance in  financial markets indicates the path traveled. If you understand the method upon wich that path was developing, you could anticipate how it will develop from any given point. So yes-past performance indicates future. But this has nothing to do with becoming a millionaire, because seeing the path and walking it are two different things.




I didnt realise fortune telling was so easy! BTW, have a deep think about what your statement means, logically - *"So yes-past performance indicates future."*


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## Triathlete (23 June 2015)

galumay said:


> I didnt realise fortune telling was so easy!





All I can say Galumay is back on the 19/11/2014 I had made this comment.

*"If price does not hold at $31 or $29 then it is coming back all the way down to $26!!!:*eek7:"

What is price today $26.85 and has been as low as $26.25 still heading down at the moment...

If that is fortune telling than yes it is easy for me since my skill level is such that I am able to do it.

Charts can give you all the information you need to put the probability of having successful trades over the short, medium or longer time frames if you have the skill to interpret them.

I also remember you made a purchase SGN at 91c back on the 20/12/2014 and I also commented on your purchase at the time with the below comment.


Keep an eye on SGN  Galumay , from my own technical view the weekly and monthly charts are still down and only the daily chart is up. I would feel more confident if it closed above $1.20 on the weekly chart as this is a 50% retracement level of a previous range and would be just one technical indication for another run towards $1.65.*It has strong support at around $0.76 so it could still come back here and test this support just be aware.*

I believe your purchase was $0.91 as of todays price it sits at $0.64...down 29% or 58% annualised...I hope you  had a stop loss  and got out?  maybe it was a speccy? either way your F/A analysis at the time was wrong...it went past what I expected at the time on very basic T/A but the direction and probability was down and certainly had no indication of moving up at all.

Looks like my fortune telling is pretty good....

I will finish off by saying that if you added chart reading to your arsenal for investing you would have far better success...imho.

I also use F/A but have found that supporting it with T/A helps put the odds in my favour.

In this game you need all the tools that work in your kit bag ready to use..


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## rimtas (24 June 2015)

galumay said:


> I didnt realise fortune telling was so easy! BTW, have a deep think about what your statement means, logically - *"So yes-past performance indicates future."*




My statement means that Wave Principle uses past performance to indicate future. The price alone doesn't mean anything-to have an idea where it can go, one must know where it came from, and how long does it took to get to this point. But anyone can stick to their guns, in the end what matters most is not how money was made, but how much.


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## SilverRanger (26 June 2015)

WOW really wow'ed today, up 5% for no apparent reason!


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## skyQuake (26 June 2015)

SilverRanger said:


> WOW really wow'ed today, up 5% for no apparent reason!




Talk of t/o by private equity (as unlikely as it sounds - look at coles back in the day and the crapstorm that raised)

Volume is crazy strong though so some shorts must be very scared


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## SilverRanger (26 June 2015)

skyQuake said:


> Talk of t/o by private equity (as unlikely as it sounds - look at coles back in the day and the crapstorm that raised)
> 
> Volume is crazy strong though so some shorts must be very scared




Not mine


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## notting (26 June 2015)

skyQuake said:


> Volume is crazy strong though so some shorts must be very scared




Shorters love take over rumors.  They're most often a great time for second helpings. 

Me thinking - Talk of the genius's that bought DJS getting into niche  super marketing has got people second guessing and thinking the Thomas Dux statergy of WOW may be good after all, etc.  
Yep, people are that stupid.
Also on a danger day, ie Greece panic, the old - 'people always gonna need food' crap, roles out again. 
So, just a good day.
Fundamentally,  someone with more than half a brain should buy it. 
Better call Sol.


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## luutzu (26 June 2015)

notting said:


> Shorters love take over rumors.  They're most often a great time for second helpings.
> 
> Me thinking - Talk of the genius's that bought DJS getting into niche  super marketing has got people second guessing and thinking the Thomas Dux statergy of WOW may be good after all, etc.
> Yep, people are that stupid.
> ...




I have a bit more than half a brain 

Still waiting though. I think it's a decent price.. but then also asking... can it be even better? Greed and regret


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## pixel (26 June 2015)

Ever heard of tax-loss selling?
WOW has been struggling, as has been widely reported and commented on. So it's quite understandable that some long-suffering holders want to get rid of it before the end of the FY, to offset some Capital Gains they (hopefully) accumulated from other stocks over the past 12 months.

Of course, there are the contrarians, who either don't need a tax loss or hunt a perceived bargain where they see technical support or fundamental "fair value". 

Time is running out for both, but those sellers who waited till today may be well pleased that they did and gladly accept a few % more than their brother-in-suffering did yesterday.

The 5-minute chart below tells today's story quite plainly:


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## notting (26 June 2015)

I just had a another look at this.
The volume action on the 17th and 18th, as well as the fact that it was 'The Australian' peddling the rumors and naming names, are all positive as far as I'm concerned.
Perhaps the board has the ultimate the succession plan up its sleeve after all. :dance:


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## Triathlete (26 June 2015)

*I will be waiting for further confirmation that the downtrend has completed but some reasons that it could be in are:*

1...We have hit the 261.8% extension level of an Elliott wave B which confirms wave C has ended the downtrend on the weekly chart

2...We have a confirmation on the weekly chart with a Bullish engulfing pattern which is a strong two bar reversal pattern with a third bar confirming, seen at the end of a trend. 

3...Volume has been supporting the moves up. ( I personally only use volume on daily charts )

4...Daily Gann swing up

5...Weekly Gann swing up

*I will be waiting till I see the monthly Gann swing to turn up before making a decision*.

I will do more analysis over the weekend but from what I can see at the moment I would look at these  resistance levels if and when price moves up if indeed it is the turning point......$29.50....$31.50....$32.58 and $33.50.


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## rimtas (26 June 2015)

SilverRanger said:


> WOW really wow'ed today, up 5% for no apparent reason!




Yep, bear market rallies are very volatile, but not when looking at the bigger picture.


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## Sharkman (27 June 2015)

plenty of action in the options market for WOW today, any options traders in here get a piece of it?

presumably due to the rumours one of those rare reverse delta skews seemed to show up today (albeit a slight one) where calls favoured puts. i went for a bit of a punt and put on some ratio call spreads. sold the 27.50 (ATM) july calls at around a 25 vol and bought 2x 29 (25'ish delta) july calls at around a 25.5 vol for a small credit.

so pretty much a delta neutral position, i figure if no bid eventuates the odds are that it's going to resume drifting lower on the back of negative sentiment and the whole thing probably just expires worthless, leaving me with the small credit taken in. but in the unlikely event that there is one, hopefully there will be enough of an upward explosion that the position will profit from the gamma of the OTM calls.


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## Miner (27 June 2015)

rimtas said:


> Yep, bear market rallies are very volatile, but not when looking at the bigger picture.
> 
> 
> 
> View attachment 63154






Sharkman said:


> plenty of action in the options market for WOW today, any options traders in here get a piece of it?
> 
> presumably due to the rumours one of those rare reverse delta skews seemed to show up today (albeit a slight one) where calls favoured puts. i went for a bit of a punt and put on some ratio call spreads. sold the 27.50 (ATM) july calls at around a 25 vol and bought 2x 29 (25'ish delta) july calls at around a 25.5 vol for a small credit.
> 
> so pretty much a delta neutral position, i figure if no bid eventuates the odds are that it's going to resume drifting lower on the back of negative sentiment and the whole thing probably just expires worthless, leaving me with the small credit taken in. but in the unlikely event that there is one, hopefully there will be enough of an upward explosion that the position will profit from the gamma of the OTM calls.



Do not hold WOW.
If not misread in Hot Copper, there is a suitor for WOW meaning Monday the lack lustre WOW will be glittered with gold until the rumour falls flat hopefully with a positive or negative announcement on ASX .


----------



## rimtas (30 June 2015)

Looks like an (a)-(b)-(c) correction could develop into a Leading Diagonal. There are nice looking Fractals on WOW which  basically tells that  an upward move should start tomorrow, carrying prices above $28. Hmm.... maybe a bottom is finally in...  If Leading Diagonal develops, there would still be a good possibility to enter as the entire pattern should later correct again to these levels. 

Just did my regular weekly browsing through the stocks and noticed this interesting development on WOW, which is here for a reason I believe. 

 Basically Key Level is $26.75, if WOW declines below, just forget the advance.


----------



## rimtas (7 July 2015)

WOW, as I expected from fractal development earlier, sported a Leading Diagonal from the bottom. Though I was waiting for the fifth wave of LD to carry above $28, but it fell short a bit, rallying to $27.97.
 Anyway, a five wave move from 26.25 bottom confirms that the Larger pattern is complete and the trend turned UP. The best entry point would be just below $27, if it develops from those levels.  

 The broader market just turned into Wave (2) rally, meaning that the positive sentiment will be dominant until it Tops out weeks or months from now, and this just adds to the case that it is a good base for a WOW to join the trend.  
If WOW indeed sported the larger Diagonal from the $39 Top as I discussed in the earlier posts, the current advance should be scary as hell (for those who are shorting WOW). There is another way to label the decline from $39, but even it portends the rise to at least to $30. 

The fact that WOW did not declined to $20-23 area and is ready to rally now,  has a bearish indication for the longer term trend, putting the upcoming rise only as corrective, which will not carry prices higher than $39. So bad news for investors, but good news for traders.
I waited a long time for this moment, now I am ready to act.


----------



## nulla nulla (8 July 2015)

Bold call to see this as a bottom. As much as I would like to see Woolworths rally back to $39.00 I suspect that the factors impacting on the market in general and Woolworths in particular, may still have some course to run (The take over rumour is helping under pin the present price action).


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## rimtas (8 July 2015)

A Bottom is not the same as The Bottom. This means that before WOW declines below $26.25, it first rises above $27.97. That is the main point.  
Even in downtrend market always presents good trading opportunities, with one of them unfolding just right before your eyes.
I am not a fundamental investor so I don't bother myself with takeover rumours, earnings and dividend yield. If I smell 10-15% rise, I am in, even if it takes a year to wait until this kind of setup develops.


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## sptrawler (8 July 2015)

Don't you think you guys are over thinking it?

I have been buying in between $26.50 - $27.00, hope I haven't done my money.


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## Garpal Gumnut (8 July 2015)

nulla nulla said:


> Bold call to see this as a bottom. As much as I would like to see Woolworths rally back to $39.00 I suspect that the factors impacting on the market in general and Woolworths in particular, may still have some course to run (The take over rumour is helping under pin the present price action).




I agree nulla, I got out before the takeover rumour. At a significant loss. I held as it was a good divi stock, but all our local Woolies are crap, and Coles are way ahead. I rolled over in to TLS for divis.

gg


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## Muschu (9 July 2015)

Garpal Gumnut said:


> I agree nulla, I got out before the takeover rumour. At a significant loss. I held as it was a good divi stock, but all our local Woolies are crap, and Coles are way ahead. I rolled over in to TLS for divis.
> 
> gg




Yes I also sold gg --at a loss.  Can't see WOW going anywhere for some time.  I am already holding TLS, and probably too many, so added to my relatively safe (I hope) ARG.


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## notting (9 July 2015)

It's a beautiful take over prospect.
If it doesn't happen I'll be even more disappointing with mankind's business acumen.


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## tech/a (9 July 2015)

notting said:


> *It's a beautiful take over prospect.*
> If it doesn't happen I'll be even more disappointing with mankind's business acumen.




Why??

Let the ship sink
It will shrink market share first in areas.
Stop competing and become what it was.
Its been sucked in beautifully.


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## notting (9 July 2015)

tech/a said:


> Why??
> 
> Let the ship sink
> It will shrink market share first in areas.
> ...




I'm not understanding much of that.
Apart from the 'why?' (I'm usually OK with three letter words)

There is a lot being made about all the new entrants into the market like ALDI and LIDL big German Boogie men.
Coles has had it's day in the sun against the bloated lazy champ.  
Put some hungry private equity behind WOW and get it lean and sharp and it will be just fine.
It has amazing real estate positions and apartments popping up all over the joint to build up on where it already is.
This is a cracker for private equity.  I'm not into betting on takeovers but this is exceptional (the farm isn't on it yet).


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## tech/a (9 July 2015)

> I'm not understanding much of that.




Fair enough




> I'll be even more disappointing with mankind's business acumen




Just one more to shake your head at.


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## sptrawler (9 July 2015)

tech/a said:


> Fair enough
> 
> Just one more to shake your head at.




So tech/a, you don't think woolies has the ability to turn it around?


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## Value Collector (10 July 2015)

tech/a said:


> Why??
> 
> Let the ship sink
> It will shrink market share first in areas.
> ...




Woolworths isn't going anywhere, it's return on equity is still great. 

Look at where Coles was before its turn around story. Woolworths is in much better shape now than Coles was then.

We have a guy on a hospital bed with a stubbed toe, and you guys seem to be pronouncing him with terminal cancer.


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## shouldaindex (10 July 2015)

It's inevitable margins will be slashed.  They are 25% higher than any other supermarket in the world and it's attracted competitors (Coles bought by WES, Aldi, Costco etc).

Until margins are rebased, possibly in the next few years, you don't really know where you're starting the turnaround.


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## sinner (10 July 2015)

shouldaindex said:


> It's inevitable margins will be slashed.  They are 25% higher than any other supermarket in the world and it's attracted competitors (Coles bought by WES, Aldi, Costco etc).
> 
> Until margins are rebased, possibly in the next few years, you don't really know where you're starting the turnaround.




It's almost as if capitalism has somehow caused profit margins to be mean reverting? Who would have thought 

You're right, investors who don't account for Capitalism 101 probably *don't* know where turnarounds might start from.

Disclaimer: I own a little, purchased systematically for ASX portfolio a few days prior to the takeover announcement.


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## rimtas (10 July 2015)

Ok, today I initiated a position in WOW . Market moved in accordance to what can be expected from the pattern-it declined to $26.70, just 5cents below my target of $26.75 as indicated in the previous post. 

 The decline from Leading Diagonal Top of $27,97 subdivided in a nice looking 5-3-5 correction, bottoming just shy of Fib 23,6% retracement, which is a most common when retracing Diagonals.

Though WOW dynamics was extremely well predictable in intraday movements today and I could have basically picked up the bottom of $26,70 as I monitored market today, my strategy doesn't allow me to catch falling knives. After the bottom I expected WOW to rally in five waves, and it did. Only then I placed an order in the previous fourth wave area of $26.90, and at the end of the session I got filled.  I marked my entry point with a green arrow, just to show how I utilise setups using EW. 
 I placed a stop at $26.20, just below LD bottom, as if WOW falls to this level before it rises above $28, it means the pattern is busted and another entry point should be waited for.










Now I expect a strong open on Monday, which breaks Wave 2 descending Channel level of $27,16 and at the same time wave (i) top, indicating that the strong rally started. 
 WOW still could subdivide into another corrective pattern before it breaches the LD Top of $28,  by rising towards $28 and falling back to $26.60, but I consider this low probability scenario as waves to this point unfolded nicely and looks complete for the Rally to start.

If this scenario plays out(a rise above $28 materializes), I update charts and most likely targets of what could be expected from this trade.


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## tinhat (11 July 2015)

Garpal Gumnut said:


> I agree nulla, I got out before the takeover rumour. At a significant loss. I held as it was a good divi stock, but all our local Woolies are crap, and Coles are way ahead. I rolled over in to TLS for divis.
> 
> gg




The old sell low and buy high strategy.


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## shouldaindex (12 July 2015)

WOW and BHP similar charts, once they broke $30 it was hard to see it being short term.


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## rimtas (15 July 2015)

WOW cleared Wave 1 Top today(~$28), confirming that uptrend has started.  The first struggle should be a retest or even jump above the trendline from 2000 low, which market proved as important by touching it multiple times.

 Next month this ascending Trendline will be just above $30 level. Depending on _how_ WOW gets there, it could mark either the end of the entire Rally (if the rise develops in a corrective manner), or just the first leg of it, as wave (A), if it rises in five waves. 

The most optimistic scenario can be determined by using the retracement guidelines of Diagonals, which tells that 76,4% is the most common Level, which in WOW is exactly the level of support of wave B(blue) at $35.92. 
Another common retracement level is previous wave (4) support at $34,76.
But those levels if reached, will be important as a Top, only if wave subdivisions are complete there. So again, the wave structure will be the key to determine the end of the rally, witch could take months to develop.
 Most likely it will end when All Ords reach wave (2) top somewhere in 5800-6000 area, as remarkably both the XAO and WOW rally started when Wave (1) in XAO bottomed few days ago, the difference is that WOW will correct a 14 months decline, and XAO just 4. This big gap(almost 10months) tells me that WOW rally could be really spectacular as it tries to rebound the most price in the least amount of time.


Short term I will focus on _how_ WOW reaches $30 area, but I expect the rise in a "gap and go" manner to continue from here, as those Diagonals (that I described in my few previous posts), tend to throw prices _high and fast._


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## rimtas (24 August 2015)

Most recent new low in WOW shows that rebound was minimal, indicating weak market. As  All Ords are in a third wave, many stocks should mimick it by catching up, so the most likely labeling is as per chart below. Third wave in WOW should slice down through `$20 support and head towards 2002-2003 levels of $10, most likely in the next year or so. 
 Even in downtrend, shorter waves should offer some good trades, like the last one, and I expect one to produce a setup at $20 where 1 of (3) should find a bottom. So now just waiting game.


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## fanger (29 August 2015)

Wow at $10, yes please I'll take that.


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## Value Collector (29 August 2015)

rimtas said:


> Most recent new low in WOW shows that rebound was minimal, indicating weak market. As  All Ords are in a third wave, many stocks should mimick it by catching up, so the most likely labeling is as per chart below. Third wave in WOW should slice down through `$20 support and head towards 2002-2003 levels of $10, most likely in the next year or so.
> Even in downtrend, shorter waves should offer some good trades, like the last one, and I expect one to produce a setup at $20 where 1 of (3) should find a bottom. So now just waiting game.
> 
> 
> View attachment 63994




$10 lol, fat chance. Swish your tea leaves again, I think you miss read them.


----------



## tech/a (29 August 2015)

tech/a said:


> Not a bottom but target
> Between $23-$24




Still think this is valid


----------



## nulla nulla (29 August 2015)

tech/a said:


> Still think this is valid




Just for clarification, is this a statement in agreement or a question?


----------



## tech/a (29 August 2015)

I made this statement with analysis months ago
I still think it's valid 
So a statement


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## rimtas (29 August 2015)

Value Collector said:


> $10 lol, fat chance. Swish your tea leaves again, I think you miss read them.





That was for fun. I like to do some sentiment testing on this forum by presenting out of the blue price targets. From the reaction like this I see that despite WOW already has declined ~40% from the top, optimism remains entrenched.  
This testing methodology also works good in realestate market-try to contact the agent and present 30-40% lower price from the advertised. From the response(if you get one), you can have a good indication in what life are agents living at the moment-are they complacent, a bit scary, or realistic. One interesting answer I just got recently, it looked like this:
" Best time to by property was 20 years ago, second best time to by property is NOW"
That was the good answer, indicating a bubble that has toped already. 

In regards to WOW, the stock is in downtrend, longer term structure is unclear, stock market has toped and is in the early stages of decline, consumers are leading the charge and WOW is nowhere even close to the bottom. 
$10 is too low and unrealistic only at the state of mind that operates at this stage. Later it could prove to be even too high when sentiment becomes dark and gloomy.  I think 2015 is the last year when you see the dividend growth.


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## PennD (30 August 2015)

rimtas said:


> That was for fun. I like to do some sentiment testing on this forum by presenting out of the blue price targets.




So how can anything you now say be taken seriously?


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## sinner (30 August 2015)

PennD said:


> So how can anything you now say be taken seriously?




Now?


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## McLovin (30 August 2015)

rimtas said:


> That was for fun. I like to do some sentiment testing on this forum by presenting out of the blue price targets. From the reaction like this I see that despite WOW already has declined ~40% from the top, optimism remains entrenched.




I just knocked the head off a few schooners. Price has increased exponentially since I started drinking, and yet my drinking chums maintain their optimism that prices will continue to rise.

Should I go long beer, or is the plural of anecdote not data?


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## tech/a (30 August 2015)

You know
WOW could make $10
Was $5 not all that long ago.

While I agree that Elliot has a number of 
Alternate counts and the goal posts move
From time to time.

I've seen some really horrible fundamental
Calls over the years as well.

Give the guy a break.
Your all like a pack of fundamental wolves.


----------



## McLovin (30 August 2015)

tech/a said:


> I've seen some really horrible fundamental
> Calls over the years as well.




Me too. Right in this thread.



			
				rimtas said:
			
		

> One interesting answer I just got recently, it looked like this:
> " Best time to by property was 20 years ago, second best time to by property is NOW"
> That was the good answer, indicating a bubble that has toped already.




It's all so easy


----------



## tech/a (30 August 2015)

McLovin said:


> Me too. Right in this thread.
> 
> 
> 
> It's all so easy




I'll let you know in 20 yrs time how bad the call is.


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## McLovin (30 August 2015)

tech/a said:


> I'll let you know in 20 yrs time how bad the call is.




The call is bad now. You don't need to know the direction of the market to know that.

Anyway, I have zero interest in one these debates so that's me done.


----------



## tech/a (30 August 2015)

McLovin said:


> The call is bad now. You don't need to know the direction of the market to know that.




Was I married to you once?

The call is unknown--- now.
Even you know that.


----------



## McLovin (30 August 2015)

tech/a said:


> Was I married to you once?
> 
> The call is unknown--- now.
> Even you know that.




It's got nothing to do with the outcome. It's about the process. Even you know that.

Trundling out a line that's been used by real estate agents since Jesus was playing fullback for Bethlehem as evidence of a market that has topped is just ridiculous.


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## tech/a (30 August 2015)

McLovin said:


> Anyway, I have zero interest in one these debates so that's me done.




Your like a school bully Mc Muffin.


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## McLovin (30 August 2015)

tech/a said:


> Your like a school bully Mc Muffin.




Pot. Meet. Kettle.


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## cynic (30 August 2015)

WOW!

This appears to have become a banter thread.

I don't normally have much to contribute to this thread these days as it's been a very long time since I last traded WOW (or any other ASX share, for that matter), but I did receive an email last Thursday offering me a gift card provided I spent a certain amount of money in their store. The offer was due to end today. I can but speculate as to the reason for this offer. Some of my thoughts, (presuming the offer was made to a large proportion of their customer base), are perhaps there  was a need to boost end of month sales figures or maybe there was a need to address a near term cash flow hiatus.

Perhaps some of the FA enthusiasts here could shed some light?!


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## sinner (31 August 2015)

tech/a said:


> Give the guy a break.
> Your all like a pack of fundamental wolves.




Um.

The point is that WOW to $10 - according to rimtas - was not an actual "call" as you put it, but rather a private behavioural experiment (with us as the subjects), to gauge sentiment by throwing out a crazy number.

In case you missed it:


> I like to do some sentiment testing on this forum by presenting out of the blue price targets.




Either that, or rimtas is making up stories about sentiment testing to cover his "call". I dunno. What do you think?

As an aside, I find it pretty amusing how personally you took the response to rimtas Pavlovian admission, as an attack by "fundamental wolves" on the precious Elliott Wave, when the group of people you're lumping together are about as disparate in their views as the anyone on the forum. I'd never be in a wolf pack with Value Collector!


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## rimtas (31 August 2015)

PennD said:


> So how can anything you now say be taken seriously?




I reshuffled my tea leaves I tried again, as someone here suggested, but they still can’t  catch on the popular opinion and indicate a bizarre options for WOW and market overall. So I think I will be changing strategy and from now on I will use a coffee grounds as a basis for a forecast. I think from there you can take me seriously. 

And believe me-the forum is a powerful tool to gauge a sentiment. People are herding, they do not know where the market is heading. Their only ground to assume the direction is from reading, hearing and seeing what others are doing, expecting that they somehow "know". 

Re real estate agents-they are public figures, and their opinion and selling strategies are also a good addition to the events that all combined gives you a grasp on sentiment in the realestate market. This market is no different from share market. When the consumption item becomes an investment item, it is prone to boom and bust cycles.  Determining the top is not easy, but it is not going the separate path from the stock market-they are like twin brothers. If stocks are heading in Wave C below 2009 lows, means that realestate has toped as well and there won’t be higher prices anymore. Realestate agents are like share analysts and their overall opinion is important, because they make money from selling. The more they sell, the more money they make, more complacent about this market they get. 


I am not calling WOW at $10, it is not the right time for this. Probably the right time will be when WOW will be at $12. It is the same like now-forecasts to $23 do not scare people. But they would have scared when WOW was $39. If you tried to say that WOW will be $23  just a year and a half from now, you would have been stoned.

Just take a look at this chart and think, where WOW will be, when All Ords will be at 4000(again, I avoid saying 1000, as this needs to be dosed in smaller increments). Does this wave from the Top looks like it is searching for bottom?


----------



## nulla nulla (9 September 2015)

Woolworths has not had a very good year, dropping from a high of $36.00 on 31 October 2014 to testing $25.10 yesterday. A fall of $10.90 (30.28%) in less than 12 months. 




With Woolworths going ex-div today it is likely there will be a further fall of the div ($0.72) or even more if the franking credit is taken into calculations. Then again, there could be a rally. Global markets rallied overnight and locally the All-Ords has been well supported at the 5000 level. 

Yesterday, Woolworths managed to close on $25.33 with 15% of the days turnover in the closing auction lifting the price to $25.33 from low $25.20's. Being the last day of trading cum-div yesterday, there is always an element of the market (mostly overseas investors) selling off as the franking credits are of no use to them. They often opt out, buying back in the next day on the ex-div plunge.

At yesterdays close the div of $0.72 represented a yield of *2.8%*. Fully franked the gross div is $1.028 which represents a yield of  *4.06%* (annual yield of 8.12%). This level of yield would/should be fairly attractive to self managed super funds, particularly those in pension mode. Their SMSF gets a tax refund of the franking credit,  and if they are over 60 they pay no tax on their pension from the SMSF. In my opinion, Woolworths at these price levels is a little bit like Telstra below $3.00. A spec buy and hold. If it rallies from here it has the capacity to generate a *30%* plus capital gain and provide an annual return on capital invested of *8%*. Then again if it doesn't rally from here I will have egg on my face. Good thing I like egg.

Disclaimer: I picked up a further parcel yesterday at $25.14.


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## PZ99 (9 September 2015)

No egg for you 

I bought @24.95 and sold @25.25 today. Probably could've done better though


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## rimtas (9 September 2015)

nulla nulla said:


> .... A fall of $10.90 (30.28%) ....
> which represents a yield of  *4.06%* (annual yield of 8.12%.






Well, doesn't make much sense to get 30% less capital at year's end with only 8% offset to this loss. 
Cash does much better, or to be exact, about 10 times better(-22% loss vs +2,5% gain).

There is though a nice probability to one more bottom, maybe even tomorrow , which will provide a good trade if confirmed. I'll be looking for signs of trend change and deploy some bucks if 5w from the bottom develops intraday. Maybe this time I'll manage to get more than 5% from the market.


----------



## nulla nulla (9 September 2015)

rimtas said:


> Well, doesn't make much sense to get 30% less capital at year's end with only 8% offset to this loss.
> Cash does much better, or to be exact, about 10 times better(-22% loss vs +2,5% gain).
> 
> There is though a nice probability to one more bottom, maybe even tomorrow , which will provide a good trade if confirmed. I'll be looking for signs of trend change and deploy some bucks if 5w from the bottom develops intraday. Maybe this time I'll manage to get more than 5% from the market.




For some silly reason I actually expected better from you than a cut and chop mis-quote to take the entire post completely out of context. 



> *At yesterdays close *the div of $0.72 represented a yield of 2.8%. Fully franked the gross div is $1.028 which represents a yield of 4.06% (annual yield of 8.12%)



.


----------



## rimtas (9 September 2015)

No, I understood your point. For those who never ever expect to claim principal, this yield is quite good. Buy WOW and forget till you die. In 10 years you should get your principal in form of dividends, and the rest is pure gain. 

But for the rest who want to use this money somehow, buying in downtrend just doesn't make any sense.  Try to wait at least for 5 waves up on daily time frame, before acting with long term expectations, because any stock could fall further than one can calculate or anticipate. Even biggest conglomerates fall one day. And WOW is expanding it's Masters chain, draining cash and expecting property bubble to continue. I smell a big trouble ahead if this strategy won't be changed.

Staying on retailer side is good, but if you step a foot into property market in any way, you are exposed to it's boom and bust cycles. Ditching Masters would be so good for WOW, that it's share price will skyrocket. Property has already turned, and I hope new CEO will see this.


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## tinhat (9 September 2015)

It could be a dividend trap. Lincoln Indicators dropped it as a recommended income stock reeling off a whole list of challenges, headwinds and disappointment at the lack of turnaround strategy. I sold the other day and put the money into PPT.


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## rimtas (11 September 2015)

This time no more "market testing". Real post with real analysis, money making machine without any emotions.

So as anyone can see in the last page I pointed out that Expanding Leading Diagonal could be at works. I put my money on that count as it was worthy setup with double confirmation at two different degrees of trend, win win situation. Original post is here:https://www.aussiestockforums.com/forums/showthread.php?t=3539&p=875210&viewfull=1#post875210
 But what happened next was most important. 
Leading Diagonals of any kind usually produce a "thrust" like any Triangles, so I expected one but none happened, instead market did some movements that were not supposed to be there for a "thrust". So my instinct told me to get out, I took 5,5% profit from that trade and stepped aside.  

The most important thing with WOW is that it moves in Threes from 2014 top, so last trade was based on this, and market reacted to the setup at the bottom. But there appears that larger forces of even bigger pattern are in progress, so new lows followed. As anyone can see, another "three" has just bottomed, so it is worth looking for entry. 

Looking at the whole picture Expanding Diagonal simply converted into Contracting one. I don't know many patterns which can move in "threes" within converging(or expanding) lines, but overall internal motive subdivisions just don't stick as "fives". So most likely WOW just sported a massive almost 1,5 year lasting Contracting Leading Diagonal as the first leg of decline within bigger corrective pattern, assume that it is Primary Wave A(circled).

Now what happens will be most important. Basically it should produce a "thrust", an Impulsive advance, usually retracing 50-80% of the pattern, giving as target in 30-35 range. In this case it should sport Three waves, probably that will extend into 2016.




I added the DAX(Germany) chart, that sported Leading Diagonal from the top and how a "thrust" unfolded later, just to gain some perspective what should happen and what to expect.







As on a Daily chart last subdivisions of wave (5) looks a bit small, I added one more possibility of how scenario could unfold if rally won't start from here. It simply must sport Three waves from wave (4) top. 
Interestingly, if you allow 7 more weeks for this scenario to unfold, it produces a Fibonacci numbers, that could be seen if each 'top to top' cycle was deducted from the previous one, making (3)+(4) waves shorter in 21w than (1)+(2) cycle and after about 7 weeks waves (4)+(5) would be shorter in 13w to the bottom, which could extend to around $22 in price.

Of course nothing of this could make any case, but sometimes fib numbers appear in one form or another. Wave structure is as always, the key. Well, the massive RSI divergence(not shown) that started from wave (1) bottom, can be found only when Diagonals are progressing. It just can't be ignored, as technical conditions like this indicate a turn when waves are ready to make one. 
I would describe the overall situation here as "stretched".


----------



## Wysiwyg (29 September 2015)

Common tators rave about Aldi being a an issue with WOW. Crocker dung. Aldi might have some stores in the capital cities but the rest of Aust. wouldn't know who they were. Aussies are faithful shoppers.


----------



## Rainman (29 September 2015)

Wysiwyg said:


> Common tators rave about Aldi being a an issue with WOW. Crocker dung. Aldi might have some stores in the capital cities but the rest of Aust. wouldn't know who they were. Aussies are faithful shoppers.




That may be so.  But I think the days of WOW earning 20%+ returns on capital by just continuing to do what it has done are over.  It is an iron law of economics - and one that WOW has for reasons peculiar to the Australian supermarket landscape defied for longer than seemed possible - that returns on capital in the order of 20% or more will sooner or later be competed away in the absence of a durable competitive advantage.  

WOW has the _competitive advantage_ part of the equation in terms of distribution, logistics and store locations.  But it does not have the _durable_ part of the equation, since in the end all it is is a retailer and very few retailers, if any, can forever earn the kinds of returns on capital that WOW has earned to date.


----------



## Junior (15 October 2015)

Down-trend broken yet?  Anyone care to provide an updated analysis?


----------



## Triathlete (15 October 2015)

Junior said:


> Down-trend broken yet?  Anyone care to provide an updated analysis?




My view on WOW weekly chart currently.


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## Bill M (21 October 2015)

From: [url]http://www.theage.com.au/business/retail/woolworths-lowes-weigh-masters-options-as-clock-starts-ticking-20151019-gkdaba.html
[/URL]
---
*Woolworths, Lowe's weigh Masters options as clock starts ticking*

Woolworths is expected to pull the plug on its $2.2 billion foray into the home-improvement market if joint venture partner Lowe's decides to exercise an option to sell its $1.1 billion stake.

Analysts believe Woolworths is unlikely to continue to run the loss-making Masters chain single-handedly if Lowe's exercises its put option and forces Woolworths to buy its 33 per cent stake for more than $800 million.

"If Lowe's wants out Woolies will want out as well," one analyst said.
---

Full Story here:http://www.theage.com.au/business/retail/woolworths-lowes-weigh-masters-options-as-clock-starts-ticking-20151019-gkdaba.html


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## shouldaindex (21 October 2015)

I'm not sure what happens in the short term, but WOW margins are still at world record highs for supermarkets.  

There would have to be a permanent unique reason for this, otherwise you'd expect them to be challenged, as is happening and mean revert.


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## Valued (21 October 2015)

shouldaindex said:


> I'm not sure what happens in the short term, but WOW margins are still at world record highs for supermarkets.
> 
> There would have to be a permanent unique reason for this, otherwise you'd expect them to be challenged, as is happening and mean revert.




Woolworths won't maintain the margins unless management start making good decisions. Changing supermarket upper level management was a good start. They have been doing well but the problem for Woolworths is that, at least for the last few years, they have tried to keep growth up by cutting the amount of staff on the floor in their stores. You get to the point where you can't cut anymore. The issue is cuts take a toll on customer service as well. They weren't willing to reduce dividends and see the stock price fall and focus on increasing staff productivity and then cut when there are genuine redundancies. Most people go away feeling they are now doing the job of two people and end up quitting, especially if they are doing 80 hours a week on a salary. It may be true that they could do more work but Woolworths continually throw staff in the deep end instead of training them how to do their jobs better so that they can get rid of staff. At this point a lot of work gets put on salaried managers. Since they get in trouble if they don't perform the required work within the legal limit they are allowed to work, they have to clock off and continue working. I have heard of a manager (who would have only been on 50 - 60k) once working 18 hours straight.

The discontent at the bottom will end up coming back to bite Woolworths if they don't change their ways. They did recognise a morale issue but their solutions to it have been questionable - painting lunch rooms and forcing staff to do surveys which just told them people weren't too happy (painting lunch rooms is an odd choice when some management don't even get lunch).

Fortunately for many wow employees, at least the ones I know sold out their shares when they were above $33. One manager said he didn't since he is adopting a buy and hold forever approach but he was relatively young with a young family. Others were out of there since they could see the writing on the wall from the store operations level. Maybe they were wrong though and maybe the new upper level management can guide the company to actual growth rather than just cost cutting.


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## poverty (21 October 2015)

Valued said:


> I have heard of a manager (who would have only been on 50 - 60k) once working 18 hours straight.




That's funny because I'm a manager in a woolies supermarket and I grossed just under 75K last year and I'm pretty sure I'm the lowest paid department manager in the store.  I've never worked 18 hours straight either, 12 is about my limit and that's only under exceptional circumstances.


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## Valued (21 October 2015)

poverty said:


> That's funny because I'm a manager in a woolies supermarket and I grossed just under 75K last year and I'm pretty sure I'm the lowest paid department manager in the store.  I've never worked 18 hours straight either, 12 is about my limit and that's only under exceptional circumstances.




It depends on the size of the store though (I suspect you know this). The salaries are individually negotiated and results may vary from state to state. At any rate, higher salaries don't actually help Woolworths. If I am wrong it means they can do a few more cuts to management but they will still suffer the same issues in the end if they don't get more customers through the door. My point is, they can only cost cut so much before they can't cut anymore and then they have to rely on high real growth rather than growth partially through cost cutting. If not, they will see their stock price fall on poor figures. I suspect they could rebound from this but unless you're planning a buy and hold forever strategy, this is little comfort.


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## poverty (21 October 2015)

Valued said:


> At any rate, higher salaries don't actually help Woolworths. If I am wrong it means they can do a few more cuts to management but they will still suffer the same issues in the end if they don't get more customers through the door. My point is, they can only cost cut so much before they can't cut anymore and then they have to rely on high real growth rather than growth partially through cost cutting. If not, they will see their stock price fall on poor figures..




The supermarket business doesn't need to cut costs, it needs to spend more.  My department made over 1.2mill gross profit last year, had more wages than we could spend because stupid uni students never want to come in to work.  I don't think there's much argument to cut my paltry wage when I'm making money a heap of money for the company. The cost cutting only needs to be done in the divisions that are making losses, Big W and ****ing Masters, Masters of doing business at a loss.  Get rid of these tards and the share price will rocket, (it's been going up lately just due to the news reports that Masters will get the ****) the supermarket and liquor business has been shackled by these spastics, cut them loose and its back to what woolies do best.


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## Valued (21 October 2015)

poverty said:


> The supermarket business doesn't need to cut costs, it needs to spend more.  My department made over 1.2mill gross profit last year, had more wages than we could spend because stupid uni students never want to come in to work.  I don't think there's much argument to cut my paltry wage when I'm making money a heap of money for the company. The cost cutting only needs to be done in the divisions that are making losses, Big W and ****ing Masters, Masters of doing business at a loss.  Get rid of these tards and the share price will rocket, (it's been going up lately just due to the news reports that Masters will get the ****) the supermarket and liquor business has been shackled by these spastics, cut them loose and its back to what woolies do best.




That's the point, they need to stop cutting costs and spend more on improving their in store execution and customer service. The issue is this requires them to spend money and the gains will not be seen for years down the track. This means there will be a period where they will be forced to report poor growth in financial reports and this will reduce profits and means the share price will likely suffer. This may paint a bad picture of upper management and impact on their compensation.


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## poverty (26 October 2015)

Those who bought at the ~$24.50 level amongst all the doom and gloom and predictions of a sub $20 share price are now sitting on a ~14% gain in less than a month and a fat dividend income stream.  I should have twigged onto it when mainstream newspapers were crowing that Woolies were in deep trouble and ******** customers were coming in telling us we were all going to lose our jobs, that should have been my signal to buy


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## nulla nulla (26 October 2015)

I'm still holding the parcel I purchased "cum div" at $25.14. The statutory 45 days have passed so I am now entitled to the franking credit. Return per share is now $1.0285 representing a return on investment of *4.089%*. Capital gain as at todays close of $27.84 is $2.70 per share or *10.74%*. Total return on investment to date is *14.817%*. Not bad for 47 days. 

I will hold for now and wait and see the outcome of the board changes and the impact of their rewards program changes.


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## nulla nulla (28 October 2015)

It looks like the "impact of their rewards program changes" is negative. The share price is down $0.50 today. Coincidently my new "Woolworths Rewards" card arrived today and I can understand why the shares were sold off. Who ever thought this program up should be taken down to one of the Woolworths outlets and be chained to the trolley rack so the customers can tell them just what they think of it. It must be one of the most poorly conceived loyalty plans, if not the worst, I have ever seen. I suspect that the back lash on this will impact badly on  the share price.


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## skc (28 October 2015)

nulla nulla said:


> It looks like the "impact of their rewards program changes" is negative. The share price is down $0.50 today.




Surely that's just noise...



nulla nulla said:


> Coincidently my new "Woolworths Rewards" card arrived today and I can understand why the shares were sold off. Who ever thought this program up should be taken down to one of the Woolworths outlets and be chained to the trolley rack so the customers can tell them just what they think of it. It must be one of the most poorly conceived loyalty plans, if not the worst, I have ever seen. I suspect that the back lash on this will impact badly on  the share price.




What are the reasons for this view?

I am guessing (hoping) that WOW didn't come up with the revised rewards program without doing extensive customer research on the previous program. The new program changes from essentially accumulating bigger rewards to a continuous stream of smaller rewards. 

I am also guessing (somewhat educated-ly - a word perhaps demonstrated that I am not that well educated) that the frequent flyers points given to member weren't free. WOW needed to pay Qantas for all those points. So perhaps re-directing those payments back into the business itself would get better bang for buck?

I can see what the new program is trying to do. It should create many smaller rewards at a much higher frequency. If a customer has $10-off on his WOW card, it will influence his decision as to where to shop. So if you can entice the customer 15 times a year with the new program vs 1-2 times a year with the existing program, you would get more foot traffic. Also, the "orange dot" program will also be a very useful stock/supplier management tool.

It remains to be seen whether it'd be successful... and you bet that if it is successful it would be copied by Coles within 6 months (and then you would buy WOW and short WES).


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## Valued (28 October 2015)

You could already set your rewards card to redeem wow gift vouchers automatically too though, but it ran through the frequent flier store. If you spend enough you can get at least $5 once a month. You had to set the amount you want and it impacted on frequency. I think it was 750 points for $5 and it got cheaper pro rata the higher you went. Most people shopping for other than just themselves could get a $5 card once per month. If the majority of people were doing that though wow probably thought well we could just give them rewards without frequent flier points if they just want dollars off when they shop.


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## Wysiwyg (28 October 2015)

nulla nulla said:


> It looks like the "impact of their rewards program changes" is negative. The share price is down $0.50 today. Coincidently my new "Woolworths Rewards" card arrived today and I can understand why the shares were sold off. Who ever thought this program up should be taken down to one of the Woolworths outlets and be chained to the trolley rack so the customers can tell them just what they think of it. It must be one of the most poorly conceived loyalty plans, if not the worst, I have ever seen. I suspect that the back lash on this will impact badly on  the share price.



I'm mildly disappointed the Rewards points didn't roll over to the new loyalty program. Still, I shop Woolies because I know where the stuff is on the shelves.


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## nulla nulla (29 October 2015)

Woolworths would have an incredible data base from the "Everyday Rewards" linked purchases. Evidence of this was the regular emails we would receive offering special on-line prices for items we have purchased in the past. This data base would enable Woolworths to plan logistics on a store by store basis, staffing requirements on a store by store basis, opportunities for expansion in high demand areas and also put them in a good bargaining position with their suppliers.

On the "loyalty" basis, the benefit to our household was initially the fuel discount vouchers (we presently have six which have transferred from the old card to the new card) and the loyalty points which we had opted to convert to a Woolworths $20.00 credit when enough points had accumulated. Our weekly shop (for five adults) generated around 250 points per week which converted to a $20 card every three months. Under the previous system we received "points" on the basis of the whole shop. Also under the program we would receive invitations to participate in bonus credits on a regular basis. That is, spend more than $100.00 per week for three consecutive weeks and receive a $30.00 credit (this works out to a 10% rebate). Having two cards linked, on these occasions where we both received the email, we would split the weekly shop to maximize the discount. You also received discounts on specific advertised items exclusive to you using your "Everyday Rewards " card.

Points accumulated whether you were paying full price for items or stocking up when prices were discounted. At check out the receipt printed off would advise the total points received, confirm a petrol discount voucher had been added to your card,  list the savings you had made buying items on special and you might be offered beer or wine at BWS at a discount linked to total spend.

Under the new system, it appears you will only receive "Woolworths dollars" from buying specific colour coded items. The weekly Woolworths specials catalogue received yesterday, for instance has "Crumpets" at $3.10 giving $1.10 "Woolworths dollars" toward your future savings. While this reduces the price to the regular discount price of $2.00, you don't get the saving immediately. Additionally, you appear at this stage to receive a maximum of $10.00 off your next shop. 

What happens to the accumulated points that were due to roll into another $20.00 before the change? What happens to the "Woolworths dollars" over and above $10.00 that you accumulate each shop? Will the "special loyalty" offers continue?

I think the change has been very poorly planned and very poorly explained to the "Everyday Rewards" members. Woolworths needs to get out there and demonstrate how shoppers will be better off. It may have cost them an arm and a leg to pay Qantas to run the program but I wonder if they will lose more in custom than they save?


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## nulla nulla (29 October 2015)

nulla nulla said:


> It looks like the "impact of their rewards program changes" is negative. The share price is down $0.50 today. .....






skc said:


> Surely that's just noise...




Or maybe the "First Quarter Sales Results" were leaked??? Todays indicative open isn't looking good.


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## UMike (29 October 2015)

nulla nulla said:


> Or maybe the "First Quarter Sales Results" were leaked??? Todays indicative open isn't looking good.



You'd think not with such a big drop today.


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## McLovin (29 October 2015)

skc said:


> Surely that's just noise...
> 
> 
> 
> ...




I think you're on the mark. QAN was reaming their FF "partners". I heard when they had the partner restaurants it was costing restaurants up to 6% of the bill to buy the points. It's probably more interesting as to what it means for QAN's FF program. It was a real money spinner, but they've constantly been devaluing points and squeezing their partners. Considering the programs importance to QAN's profitability they need to tread carefully. I also think QAN did not see this coming, judging by the PR emails they've sent out since WOW made the announcement.


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## baby_swallow (29 October 2015)

WOW its like a healthy animal that has a vampire leech on its back....and that blood-sucking leech
is called Masters - its sucking WOW coffers bone dry.

I have been to Masters stores many times and I can tell the difference between them and Bunnings.

To put it simply: Bunnings sells things what people want, while Masters sells things what Masters "think" what people will be wanting.


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## sptrawler (29 October 2015)

baby_swallow said:


> WOW its like a healthy animal that has a vampire leech on its back....and that blood-sucking leech
> is called Masters - its sucking WOW coffers bone dry.
> 
> I have been to Masters stores many times and I can tell the difference between them and Bunnings.
> ...




WOOLWORTHS SALES SLIDE AMID TOUGH COMPETITION

Food & liquor up 0.4pct to $11.1b

Petrol down 27.9pct to $1.33b

General merchandise down 7.9pct to $974m

Hotels up 3.3pct to $412m

Masters up 23.5pct to $294m

Home Timber and hardware up 17.1pct to $274m

Total group sales down 2.5pct to $15.75b

A lot of shock and awe going on, to scare the bejeezus out of mums and dads, but petrol seems to be the issue.

Masters appears to be getting a bit of traction, I would think it is the massive roll out costs, that are killing them.

https://au.news.yahoo.com/thewest/a/29941197/masters-sale-lingers-as-woolworths-bombs/


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## poverty (30 October 2015)

sptrawler said:


> A lot of shock and awe going on, to scare the bejeezus out of mums and dads, but petrol seems to be the issue.




And the petrol is only an issue because of a change to the accounting between WOW and Caltex, it doesn't even effect the bottom line.


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## silence (1 November 2015)

I would love to tell someone at woolworths everything that is wrong with the grocery store side of things currently, but would they listen?

I may as well rant here.

First of all, it's not that cheap, implying that I am paying a premium for something. In the case of coles, which is slightly cheaper but still expensive, the premium seems to pay for clean, new/refreshed stores and friendly staff with minimal queues. My local woolworths offers none of these benefits. It's a ramshackle old dump with rude foreign staff and a long queue, even in the early morning when I want to buy 1 small thing before work. 

Next, the loyalty program. I didn't bother with it so far, but now they've 'revamped' it, I am being forced to consider it against my will. I don't want to buy something just to get a mysterious 'discount' in the future, this is basically like a 'sale' (which other stores offer without any conditions attached) only I'm forced to give them personal information and wait until I meet certain conditions like spending $x before I can get my 'discount'. I don't like being forced to do things, it implies that they aren't something I actually want to do and that there is something dodgy going on. So this loyalty program makes me distrust the company subconciously. Give me an optional reward (such as spend $x over a few weeks and get $x back), don't just dress up the specials you could have offered anyway and make me work for them, as I am smarter than that.


Also, the fresh produce is disastrously non-fresh for a company that claims to excel in the freshness of their produce. The carrots turn into rubber 2 days after buying them, the bananas are so unripe I have to sit them on my desk for 3 days before they are edible, and the nuts are so expensive for the tiniest packages. Again, I only shop there because I'm too lazy to make it to the local asian grocer while they are still open.


I'm being lazy less often now. Wake up woolworths, offer something over all the companies who are cheaper and better than you now.



(I don't hold, but hell, I may trade when I think it has hit the bottom).


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## Bill M (1 November 2015)

silence said:


> Next, the loyalty program. I didn't bother with it so far, but now they've 'revamped' it, I am being forced to consider it against my will. I don't want to buy something just to get a mysterious 'discount' in the future, this is basically like a 'sale' (which other stores offer without any conditions attached) only I'm forced to give them personal information and wait until I meet certain conditions like spending $x before I can get my 'discount'. I don't like being forced to do things, it implies that they aren't something I actually want to do and that there is something dodgy going on. So this loyalty program makes me distrust the company subconciously. Give me an optional reward (such as spend $x over a few weeks and get $x back), don't just dress up the specials you could have offered anyway and make me work for them, as I am smarter than that.




I am a member of both Coles Flybuys and Woolworths Everyday Rewards. I reckon flybuys is far better and offers better incentives and discount offers. I accumulated around $200 worth of flybuys points over the last year and right now I'm using those $$$ to buy my petrol from shell express. This $200 worth of credit I got was for doing nothing other than buying my groceries and insurance from Coles, great stuff.


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## Ann (1 November 2015)

I am going to chuck in a rant as well. I never found Woolies/Safeway ever had good quality fresh vegetables as they advertised. Added to that they used to inflict that ghastly jingle on me when I was trying to shop. "we are the fresh food people....blah blah blah" This I found particularly galling as I picked through their moldy tired old beans trying to find a few worth salvaging. The majority of their stores look run down and tired. No wonder the staff are disgruntled. After all management don't seem to care, why should they? I have slowly over the years moved away from Woolies to Coles. Woolies used to have better meat, but not so anymore, Coles have really lifted their game with their meat, fish and chicken, their vegetable were always excellent. Plus I prefer the programming for Coles self serve checkout, it is a better program and quicker and you can turn off the computer's voice! BIG PLUS! 


Masters! Depressing! Dark, dark dark inside, couldn't wait to leave. Can't speak about the product, I just didn't want to browse. Maybe change of colour, a nice terra cotta instead of blue outside and put bulk skylights into the roofs and put in solar panels to show the world you are green!
Bunnings, plenty of skylights plenty of brightness, need a crow bar to get me out of there. 
The Masters' blue is harsh, Bunnings' green is restful.

Well I enjoyed that rant! 

Now the reason I am here is to put up a chart. It is a five year monthly chart and it is showing WOW at a long term double bottom. This is generally quite a positive pattern for a chart as the stock tends to bounce up and begin a recovery phase. Let's see!


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## sptrawler (1 November 2015)

Ann said:


> I am going to chuck in a rant as well. I never found Woolies/Safeway ever had good quality fresh vegetables as they advertised. Added to that they used to inflict that ghastly jingle on me when I was trying to shop. "we are the fresh food people....blah blah blah" This I found particularly galling as I picked through their moldy tired old beans trying to find a few worth salvaging. The majority of their stores look run down and tired. No wonder the staff are disgruntled. After all management don't seem to care, why should they? I have slowly over the years moved away from Woolies to Coles. Woolies used to have better meat, but not so anymore, Coles have really lifted their game with their meat, fish and chicken, their vegetable were always excellent. Plus I prefer the programming for Coles self serve checkout, it is a better program and quicker and you can turn off the computer's voice! BIG PLUS!
> 
> 
> Masters! Depressing! Dark, dark dark inside, couldn't wait to leave. Can't speak about the product, I just didn't want to browse. Maybe change of colour, a nice terra cotta instead of blue outside and put bulk skylights into the roofs and put in solar panels to show the world you are green!
> ...




That's interesting, I'm in W.A Perth and find the exact opposite, Masters are light and airey, where'as Bunnings aisles are tall and narrow creating dark spaces.

Maybe because the Bunnings stores in W.A are getting old.

However I do think they are focussing on different customers, if I'm looking to replace something, new for old I'd probably go to Masters.

If I want to fix or replace something, same for same, I'd probably go to Bunnings.
It is going to take some time for Masters to gain traction, and it isn't my cup of tea, but it will probably work with the throw it out generation.IMO

It obviously is catering to the throw it out and replace it generation, whereas Bunnings is aimed at the fix it generation.

Maybe it isn't so stupid an idea, car ownership has certainly changed, no one diy's their cars anymore, except me.


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## Ann (1 November 2015)

sptrawler said:


> That's interesting, I'm in W.A Perth and find the exact opposite, Masters are light and airey, where'as Bunnings aisles are tall and narrow creating dark spaces.
> 
> Maybe because the Bunnings stores in W.A are getting old.




That's a very interesting comment sptrawler, I wonder how the Bunnings and Masters businesses compare in WA alone?


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## sptrawler (2 November 2015)

Ann said:


> That's a very interesting comment sptrawler, I wonder how the Bunnings and Masters businesses compare in WA alone?




I really don't know how they compare, good point.

I do have WES and WOW shares, so it is a a balancing act, but I am trying to stay objective.

Bunnings, prior to Wesfarmers taking them over, were hopeless, store of last resort.

Coles prior to Wesfarmers taking over were a basket case, wasn't a lot of the supply chain owned by the directors?  Now look at Coles.

Maybe the problem with WOW, is there may be too many sweetheart deals going on, who knows? That is what usually happens. 
I know our local Big W may as well shut down, it is useless, unless you want to buy books.

The problem is with the technological era, they usually get get exposed, ala VW.

I guess what I'm saying is, WOW can be sorted out quickly, if management wants to.


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## Ann (2 November 2015)

sptrawler said:


> I know our local Big W may as well shut down, it is useless, unless you want to buy books.




Don't get me started on Big W! 
If I want to buy cheap crap I go to Kmart, why pay twice the price for the same crap at Big W!


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## Valued (2 November 2015)

Woolworths knew years ago that they would be competing with Aldi on price and cutting staff to lower their prices while still maintaining growth targets. The reason that they thought they could do this was because Aldi only had like 2000 skus and Woolworths had 40,000, so they figured they only had to reduce the cost of the 2000 skus that match Aldi. The problem, I suppose, is that say Aldi has 5 skus of coffee and Woolworths has 50, if they drop the price on 5 skus to match Aldi many people will just buy those 5 skus and not the other 45, so they were basically trying to be Aldi but with far more expenses. 

I always thought they should focus on customer service and the customer experience, and just charge more. Be the premium supermarket and focus on making people feel like the experience is worth it because they never have to wait and they always have the products they want, but instead they opted to compete on their weaknesses rather than maximize their strengths. I also thought they should run random rewards on their rewards card e.g. you scan it and you could win $100 off your groceries or whatever, obviously it would be a very very small chance for that to happen but it's the fact that it can happen and it introduces the same emotional response people get when entering competitions or gambling, it gives them hope and may influence their decision to shop there. People don't want to enter draws, they want instant gratification.


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## notting (2 November 2015)

Valued said:


> I also thought they should run random rewards on their rewards card e.g. you scan it and you could win $100 off your groceries or whatever, obviously it would be a very very small chance for that to happen but it's the fact that it can happen and it introduces the same emotional response people get when entering competitions or gambling, it gives them hope and may influence their decision to shop there. People don't want to enter draws, they want instant gratification.




Oh Really.

Well let me tell you what they shouldn't do.

Hold you up at the till and ask you to swipe your fukcing rewards card so after spending $40,000 over 10 years you get enough points to buy a peanut.  Who the fukc does not see through that loyalty rig, hook the idiot BS and be held up by it every fricken time you go there and are leaving wanting to take the till and smash it over the general managers head.  That's not a smart way to treat your customers.  Coles asks you something about fly byes and the deal is better, at the start, whilst you're doing something else and it feels seamless effortless.  Who ever came up with WOWs rewards BS has killed a huge amount of good will for WOW.
Piss on your customer as he walks out ~ Brilliant.

Sorry but I am a little passionate about retail at times.


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## sptrawler (2 November 2015)

notting said:


> Oh Really.
> 
> Well let me tell you what they shouldn't do.
> 
> ...




I'm with you, all these reward schemes are stupid, but then again I see people lining up for 4 cents off fuel.

Most normal city cars, have approx 60 litre tanks, they're not empty when the customer is buying fuel.

So lets say the person puts in 50 litres, WOW that is a $2 saving, or one and a half litres of fuel free.
It's easy to see how scammers do so well in Australia.IMO


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## Bill M (2 November 2015)

sptrawler said:


> I'm with you, all these reward schemes are stupid, but then again I see people lining up for 4 cents off fuel.




And in many cases if those people take a small drive further they can get there fuel for 10c + per litre cheaper without a docket. Certainly can see where it's a bit of a con.


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## Valued (3 November 2015)

I think people want the 4c off for the principle of the thing, they feel that fuel is too expensive and so they want to get back at the big corporations. Obviously, they arn't, they are playing into the hands of these big corporations, but they don't know that. They also think on the lines of "Mr Woolworths makes too much money".


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## Value Collector (3 November 2015)

Bill M said:


> And in many cases if those people take a small drive further they can get there fuel for 10c + per litre cheaper without a docket. Certainly can see where it's a bit of a con.




Fuel is slightly different prices depending on the location of the station, sometimes the cheapest one will be a Woolies station other times not.

eg, the first few petrol stations near the end of the F3 motor as you enter Sydney are always more expensive than the ones a few kilometres  further on, because a lot of people are going to stop at the first station they see, so the ones further on have to get a reputation of being a few cents cheaper.

So far the cheapest station I have seen in the Sydney area is a woolies, in western Sydney, Unfortunately I only go past it about once a month, but it is consistently cheaper than any other I see on my travels about 10cents per litre cheaper on LPG, and the woolies docket just makes it even cheaper, 4 cent discount works out at 7 percent discount on LPG.


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## Ann (3 November 2015)

notting said:


> Oh Really.
> 
> Well let me tell you what they shouldn't do.
> 
> ...




Thank you notting, you gave me a wonderful laugh! 

The old Woolies rewards cards weren't bad value, I never registered my card but just flashed the original temporary card when I found one of their special reward card discount products I needed to buy. They offered some very good savings sometimes and I got instant gratification. I never wanted their fuel offer and thought the points value was all BS so registering was no value to me. 
Now as I understand it, the new reward cards have changed to 'buy the product on Rewards Special', then eventually when you accrue enough of these Reward items you are given $10 back on your shop...but you are forced to register or else you will lose your credits after a few months. I won't be signing up!

What really pisses _me_ off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!

No doubt I will be back to bitch about something else before long, it is so much fun! :


----------



## skc (13 November 2015)

Interesting article on Woolworths...

http://www.morphicasset.com/blog/20...-82650333&mc_cid=4204190b65&mc_eid=4214979868


----------



## Gringotts Bank (14 November 2015)

Ann said:


> What really pisses _me_ off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!
> 
> No doubt I will be back to bitch about something else before long, it is so much fun! :




Yeh they're a bunch of c---ts.  Coles are the same though.

The other day they had a glut of non-homebrand milk which wasn't selling.  So they took all the homebrand milk off the shelves.  I stood there for a few minutes and watched as half a dozen people bought milk costing twice the price.  I asked the shelf stocker guy and he told me the delivery hadn't arrived yet.  Two days running, this was the excuse.  As if the different milk brands arrive in different trucks.  Horsesh1t.


----------



## Valued (14 November 2015)

Ann said:


> What really pisses _me_ off is how Woolies position the wrong stock over the wrong price. It is invariably more expensive stock over cheaper prices. They do it all the time, I bet they catch a huge amount of business that way by ripping off the customer. If I see something that looks like a great buy, I always read the little ticket underneath. It happens regularly, the last time was for toothpaste, big tubes in the small tubes section. If you got to the checkout and complained you would be told the price ticket clearly said Y size and you have Z size, so there is no redress to get the product at the price where it was displayed. Of course management would simply blame lazy staff, so the scam can continue without any questions asked. I have your number Woolies, not suckering me!
> 
> No doubt I will be back to bitch about something else before long, it is so much fun! :




That would be a genuine mistake. Supermarkets are actually quite pedantic about their planograms and having everything in the correct place. The problem is nightfill staff don't really care since their job sucks. It isn't some big conspiracy to scam customers. If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there.


----------



## notting (14 November 2015)

It's pretty amazing that Bunnings managed to increase sales by 11% during a period when it is being directly targeted by what seemed to be a genuine competitor pretty much for the first time, for some of its market share.
I was quite happy about Masters from a consumer perspective, a new toy shop and keep em honest etc.  

When I first went in to a Masters it felt great and they were bending over backwards to be helpful unlike what had become a kind of a resentful staff member atmosphere at Bunnings.  But it just didn't work.  Bunnings have picked up the friendly/helpful game now which is about all the good that's come of it and the Masters Staff now seem like a bunch of lost souls and the stores are looking a little more hapless.


----------



## sptrawler (14 November 2015)

notting said:


> It's pretty amazing that Bunnings managed to increase sales by 11% during a period when it is being directly targeted by what seemed to be a genuine competitor pretty much for the first time, for some of its market share.
> I was quite happy about Masters from a consumer perspective, a new toy shop and keep em honest etc.
> 
> When I first went in to a Masters it felt great and they were bending over backwards to be helpful unlike what had become a kind of a resentful staff member atmosphere at Bunnings.  But it just didn't work.  Bunnings have picked up the friendly/helpful game now which is about all the good that's come of it and the Masters Staff now seem like a bunch of lost souls and the stores are looking a little more hapless.




When I first went to a Masters store, I thought WTF are they trying to do, who are they focusing on?

Now that I've been there a few times, I think I can see what they are aiming at.

If I want to fix something like a tap washer or a toilet cistern, or I want to adapt something like the retic, I'd go to Bunnings every time.

If I wanted to replace something, new for old, or put in a new light fitting or anything else, I'd probably go to Masters.

Masters seems to cater to the throw it out generation, whereas Bunnings targets the fix it generation.

When I see what my middle aged kids do, maybe they aren't as stupid as everyone makes out.


----------



## qldfrog (15 November 2015)

sptrawler said:


> Masters seems to cater to the throw it out generation, whereas Bunnings targets the fix it generation.
> 
> When I see what my middle aged kids do, maybe they aren't as stupid as everyone makes out.



I believe you nailed it perfectly and when you have a look at what people discard at the tip, your last sentence might be right:
for a new cloth dryer, a nice chandelier or colourfull stacking boxes, go to masters, not when you want to reuse your old bits and piece to make a chook pen


----------



## Ann (15 November 2015)

Valued said:


> That would be a genuine mistake. Supermarkets are actually quite pedantic about their planograms and having everything in the correct place. The problem is nightfill staff don't really care since their job sucks. It isn't some big conspiracy to scam customers. If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there.




Hi Valued,   I am not suggesting it would be official policy to place higher priced product over lower priced tags and I have no doubt their product planograms would be pristine as this is, as I understand it,  what they use to sell product placement to suppliers. However we don't have night fillers in any of the supermarkets where I shop as the shelves are filled during the daytime which is profoundly inconvenient. They appear to have about four different items on their trolleys for shelf replenishment, so the risk of error would be minimal even for the most bored staff member.  
Coles are also guilty of misleading customers, on a regular basis they have a sign stating 'mushrooms on special' at reduced price. No particular mushroom such as button mushrooms are mentioned...simply 'mushrooms' on special. Fine get to the checkout with your Portobello mushrooms and no way are they on special even though they are also classed as 'mushrooms'!

You said in your quote...* "If you think about it logically, it would annoy customers if it happened all the time, just like it annoys you, and it would drive all their customers away. It would be really bad business and makes no sense for them to try to scam people for a buck or two here or there."* You are absolutely correct!

Have a look at the WOW chart, the price has fallen back to the price of January 2007, customers are not happy they are moving away from Woolies in droves. Not saying it is purely because of scamming their customers but every little negative will build into a giant negative and drive customers away. Like watching the guys in the fruit department slamming the bananas down into position. 

I describe myself as middle of the road ordinary/average, not a front runner and I am moving away from shopping at supermarkets. I am over them and heading back to small independents with a focus on organic. Even though I am paying more per item, the quality is better and it keeps longer so there is less wastage and because it costs a lot more I am more careful not to waste.  I am reducing the items I buy right across the board as the places I shop tend to only stock a limited range. I am not doing this because it is trendy and I won't be the only Mrs Average weaning themselves off supermarkets either!


----------



## shouldaindex (15 November 2015)

I keep trying to find more information about Supermarket margins, and analyse what is a sustainable level for WOW to rebase expectations at.

They are the only company in the world at 8% and I think Coles and WalMart are about 6% in no.2 position.

So they announced a -30% decline in EBITDA, which would take that 8% back to equal world best at about 6%.  Nobody knows whether that is a sustainable level to then start growing revenue at, as Coles / Aldi and whoever else will compete too.

The worry is that companies like Carrefour and Tesco in Europe have been decimated (SP about -60%) from similar competition that is happening here.  

So I suspect the WOW 3 year rebuild will be very eventful and a rebase of earnings will hopefully provide an opportunity when mood is at it's lowest.   Then it's up to whether the turnaround succeeds to grow off this base, if not WOW could be the next Carrefour or Tesco (who are still figuring out what the answer is).


----------



## qldfrog (16 November 2015)

shouldaindex said:


> The worry is that companies like Carrefour and Tesco in Europe have been decimated (SP about -60%) from similar competition that is happening here.  .



with margin far far lower than the 6% quoted, but the computation might be different


----------



## shouldaindex (16 November 2015)

Yes, the one graph I read saw them in the 4-5% range.

So WOW would have to take a 40% haircut on margin to be comparative, that would leave EPS at about 110c, a bit further down than 140c extrapolated from the recent announcement of -30% EBITDA.


----------



## notting (20 November 2015)

Keep thinking it would have resumed it's down trend but seems to be showing a bit of strength right hear at this 23.20 level


----------



## Triathlete (21 November 2015)

notting said:


> Keep thinking it would have resumed it's down trend but seems to be showing a bit of strength right hear at this 23.20 level




If you are right about the strength then in my opinion presently a move up towards $25.50 - $26.00 is possible short term but still in a down trend at the moment.

I would need to see the stock clear $27 before I would look at saying the down move is complete just my opinion though.


----------



## shouldaindex (21 November 2015)

Keep in mind fundamental information.

1H Profit Guidance is -28 to -35%.

Projecting this to full year EPS would be around about 1.30 - 1.40 EPS.

Judge your fair value from there.


----------



## notting (23 November 2015)

shouldaindex said:


> Keep in mind fundamental information.
> 
> 1H Profit Guidance is -28 to -35%.
> 
> ...




Not so useful when the price action indicates something is be brewing under the surface for no public reason what so ever as announced today - 



> market close
> The ASX rally has rolled into its fifth straight session, with a big jump in Woolworths and solid support
> 
> Woolies was the good news story of the day, jumping 3.9 per cent on news that private equity was circling the retailer's Big W division, while the supermarket owner also announced that former CEO Roger Corbett would become an advisor to the board.




In such a case that so called fundamental information vs price action is saying something very different.


----------



## shouldaindex (23 November 2015)

Same thing happened 2 months ago on KKR rumours.


----------



## notting (23 November 2015)

Yeah but not much uncanny strength action before the KKR 'rumors' this had odd stength to me prior to today's news rumors which made it compelling.


----------



## Tightwad (23 November 2015)

Rumours is about right.. its all Second Hand News.  In my Dreams KKR or someone will take over.  I'll Never Go Back Again to buy more than the small amount I have, still i Don't Stop reading reports about it.  

Things won't improve until some of the management are told "Go Your Own Way".  I don't want to see the Songbird on those stupid cheep cheap coles ads, most of tee problems seem to be with The Chain of command.  We keep being told how we'll love products at Coles, why arent people saying to Woolworths You Make Loving Fun?

Anyway I Don't Want To Know too much til theres some solid news, but Oh Daddy a takeover would be sweet.  I was in Big W the other day, and the price of potash was about $5 more than what i could get at bunnings, so i asked what was in it, Gold Dust Woman?


----------



## notting (23 November 2015)

It was a very short term opportunity.  whether or not the the thing plays out is not relevant. The insiders could have found out through various means that there was interest.  But you don't know the depth of the knowledge the insiders had.  They may have been hoping for a full tilt.  If it is only for Big W then that ain't helping anything.
But why would anyone want to buy that?
It would be hard to see WOW in the hands of foreigners too, FIRB risk.


----------



## Valued (24 November 2015)

The WOW chart is a joke, anyone taking a position now is just gambling.


----------



## Triathlete (24 November 2015)

Valued said:


> *The WOW chart is a joke*, anyone taking a position now is just gambling.




Agreed..!!


----------



## notting (24 November 2015)

Position taken here.



notting said:


> Keep thinking it would have resumed it's down trend but seems to be showing a bit of strength right hear at this 23.20 level




Out on the news.  An educated gamble like any position.


----------



## shouldaindex (24 November 2015)

Wouldn't want to be holding through any earnings announcements.

But if you're backing in a Big W or Masters sale, AGM is on Thursday.


----------



## PennD (24 November 2015)

notting said:


> Position taken here.
> 
> 
> 
> Out on the news.  An educated gamble like any position.




Trading with freedom of fear... Nice!!!


----------



## sptrawler (26 November 2015)

Well what a great state of affairs, it looks as though Woolies has fallen into the same hole, Coles did pre Westfarmers takeover.

https://au.news.yahoo.com/thewest/business/national/a/30202897/woolies-chair-reassures-shareholders/

The part ,that made my eyes roll back in my head is copied below.


Gordon Cairns admitted Woolworths' food and grocery prices were two to three per cent dearer than Coles.

But after pouring $300 million so far into lowering prices, Woolworths is just as cheap as its main rival, he told shareholders at the company's annual general meeting in Sydney on Thursday.

But he also repeated warnings that this ongoing investment in lowering prices will hurt the company's profit margins.

*Mr Cairns, who has been a Woolworths supplier since 1987 and appointed the company's chairman* in August, said he has seen its good days and not so good days.


Why the hell you would would have a supplier appointed chairman, or in any position of influence, is crazy.


----------



## skc (26 November 2015)

sptrawler said:


> *Mr Cairns, who has been a Woolworths supplier since 1987 and appointed the company's chairman* in August, said he has seen its good days and not so good days.
> 
> 
> Why the hell you would would have a supplier appointed chairman, or in any position of influence, is crazy.




Perhaps this gives a better profile of Gordon Cairns.

https://www.linkedin.com/in/gordon-cairns-a7abb844


----------



## shouldaindex (26 November 2015)

Sounds like they're sticking with Big W, probably because earnings are down 50% from recent years and see chance to fatten it up before a sale.  

They still want to be the no.2 in home improvement but don't want to keep losing 200m, so sounds like reducing Masters ownership and possibly expanding their other brands.

Supermarket margins down 30% we'll see what rebasement level leads to revenue growth, hard to say this early.


----------



## sptrawler (26 November 2015)

skc said:


> Perhaps this gives a better profile of Gordon Cairns.
> 
> https://www.linkedin.com/in/gordon-cairns-a7abb844




There should be some law about conflict of interest, with regard company management, same as politicians.

The last thing company directors are going to do, is invoke measures, that cut funding to the directors personal interests.

FFS it is business 101.


----------



## Ves (26 November 2015)

sptrawler said:


> There should be some law about conflict of interest, with regard company management, same as politicians.



Mate,  there are laws for conflict of interest and director's duties etc. What do you think the 'Duties and Powers'  (Chapter 2D.1) of the Corporations Act is all about?


----------



## System (18 January 2016)

Woolworths pulls plug on Masters: http://www.smh.com.au/business/reta...wes-exercises-put-option-20160117-gm7ygg.html


----------



## nulla nulla (18 January 2016)

Finally a smart decision from the Board. Now all they need to do is speed up the exit of O'Brien and the market will start to take heart.


----------



## notting (18 January 2016)

The board should pitch the Masters business to Anchorage Capital Partners, apparently they are brilliant achieving miraculous U turns in failing businesses.


----------



## Macquack (18 January 2016)

notting said:


> The board should pitch the Masters business to Anchorage Capital Partners, apparently they are brilliant achieving miraculous U turns in failing businesses.




Obviously Masters does not have any reserves of cash or inventory otherwise those blood sucking leeches at Anchorage would be offerring to lend a hand.

I am in the building game, live in the biggest city in Australia and the nearest "Masters" hardware is/was 50 kilometres away. I did venture a few times to Masters (with my back pack and two days rations) to only find a bigger clone of "Bunnings" with the odd addition that "Masters" hardware actually sold refigerators.

And the geniuses at Woolworths needed the American hardware chain "Lowes" to help them copy the "Bunnings" model and lose even more money.


----------



## luutzu (18 January 2016)

Macquack said:


> Obviously Masters does not have any reserves of cash or inventory otherwise those blood sucking leeches at Anchorage would be offerring to lend a hand.
> ...




Anchorage has probably been on the phone all day. What with the $500million they got to spare. 

So would the other Anchorage wannabes seeing how woolies have been kind to capitalism... at least to the private kind, not so much the normal retailer mass kind.


----------



## CharlieDaaboul (15 April 2016)

*WOW Shares Theory!*

First time in shares!
Not sure if theory actually makes sense!
But woolworths shares are the lowest they have been in around 8-10 years. Does this potential mean it wont drop as much and only really rise from here unless wow is leading to bankruptcy?
Please dont roast me to much about how stupid it might sound


----------



## luutzu (15 April 2016)

*Re: WOW Shares Theory!*



CharlieDaaboul said:


> First time in shares!
> Not sure if theory actually makes sense!
> But woolworths shares are the lowest they have been in around 8-10 years. Does this potential mean it wont drop as much and only really rise from here unless wow is leading to bankruptcy?
> Please dont roast me to much about how stupid it might sound




Should also check the number of shares then and number of shares now when comparing share price like that. So if it has 100M shares then but now has 200M shares, the same share price then and now indicate different value.

Though I haven't take much of a close look at WOW, a quick review of its figures show at $22 to $26 a share is very reasonable. If you don't have anything else better to do with your money, I reckon now's the time to get in.

It could go lower when the recent bad news repeats in its reporting etc., but we can't really pick bottoms til it's way up and a bit late.


----------



## Triathlete (16 April 2016)

Just updated WOW weekly chart with my own view (on chart).As always do your own analysis.
This is for educational purpose only.

Cheers
Triathlete


----------



## Porper (16 April 2016)

Triathlete said:


> Just updated WOW weekly chart with my own view (on chart).As always do your own analysis.
> This is for educational purpose only.
> 
> Cheers
> ...




Out of interest does your software make the wave counts? Or do you add them?


----------



## Triathlete (16 April 2016)

Porper said:


> Out of interest does your software make the wave counts? Or do you add them?




Hi Porper,
                I do the wave counts myself......Is there a problem that you can see?


----------



## Porper (16 April 2016)

Triathlete said:


> Hi Porper,
> I do the wave counts myself......Is there a problem that you can see?




Your wave count going higher is spot on Triathlete i.m.o.

However an impulse wave must subdivide into 5 smaller waves. Your wave-1 is 3-waves, as is wave-5. Also, wave-4 is a straight line leg down whereas it should be choppy and corrective in nature. Not a criticism at all but just something that will help with other charts. In this instance the end result was the same but it won't always be.

The leg going down is some form of combination pattern. I don't tend to label them as they are only "correct" in hindsight i.m.o. Just a waste of time and effort. I am long WOW from the 26th Feb rejection of lower prices. Tight stop below that days low and high risk/high reward. Bullish divergence on weekly chart and looking for a bounce only. A break through the upper channel line would help.


----------



## Triathlete (16 April 2016)

Porper said:


> Your wave count going higher is spot on Triathlete i.m.o.
> 
> However an impulse wave must subdivide into 5 smaller waves. Your wave-1 is 3-waves, as is wave-5. Also, wave-4 is a straight line leg down whereas it should be choppy and corrective in nature. Not a criticism at all but just something that will help with other charts. In this instance the end result was the same but it won't always be.
> 
> The leg going down is some form of combination pattern. I don't tend to label them as they are only "correct" in hindsight i.m.o. Just a waste of time and effort. I am long WOW from the 26th Feb rejection of lower prices. Tight stop below that days low and high risk/high reward. Bullish divergence on weekly chart and looking for a bounce only. A break through the upper channel line would help.





Thanks for your feedback. I see what you mean.
I do get a bit lazy sometimes with the sub waves, I should take more care.

 I use basic EW and look at the retracement and extension levels of each wave  without taking into account the sub wave structure as you have mentioned, might be time to  read Elliot Wave Principles again .

I am also watching WOW with interest and the  50%ATH and 50%ATR levels. A close below here will see price collapse imo.


----------



## sptrawler (25 April 2016)

*Re: WOW Shares Theory!*



luutzu said:


> Should also check the number of shares then and number of shares now when comparing share price like that. So if it has 100M shares then but now has 200M shares, the same share price then and now indicate different value.
> 
> Though I haven't take much of a close look at WOW, a quick review of its figures show at $22 to $26 a share is very reasonable. If you don't have anything else better to do with your money, I reckon now's the time to get in.
> 
> It could go lower when the recent bad news repeats in its reporting etc., but we can't really pick bottoms til it's way up and a bit late.




I think the same way as you, Woolies has a pretty lean operation, if things get really tight in the retail sector, Woolies only has to worry about Big W, it has already written off Masters. 

Masters was a pizz poor management decision, badly excecuted, luckily they don't have a lot of other baggage. Recovery could be quite quick if they focus on core supermarket performance.
People still have to eat.


----------



## luutzu (25 April 2016)

*Re: WOW Shares Theory!*



sptrawler said:


> I think the same way as you, Woolies has a pretty lean operation, if things get really tight in the retail sector, Woolies only has to worry about Big W, it has already written off Masters.
> 
> Masters was a pizz poor management decision, badly excecuted, luckily they don't have a lot of other baggage. Recovery could be quite quick if they focus on core supermarket performance.
> People still have to eat.




Surprising that their Masters didn't do well given the recent [still going?] property boom. Maybe not so surprising given the deal they made with Anchorage for Dick Smith. 

But true, there's a lot of value in WOW's assets... businesses are supposed to screwed up now and then... Their screw ups haven't kill them, only made them more likely to be Wal-Mart's new beachhead into Australia.


----------



## shouldaindex (25 April 2016)

Just my opinion:

WOW profits are stuffed, and the baseline is yet to be established.

They sat about 30% clear as the world leader in profit margin a few years ago, and are only now being brought back to standard.   They've reduced profit margin by that 30% (EPS -30% in H1) as an 'investment tactic' to recover customers and revenue, but it's led to a price war between Coles and Audi and Woolies.

So now we are going to establish a new paradigm of profit margins for supermarkets, and if you look to Europe, their supermarket margins are nowhere near the likes of WOW and Coles due to the competition there, which is what Australia may look like in the future.

No idea what price WOW is at, and prefer not to know.  It'll save me thinking it's cheap and finding confirmatory evidence to support it, to end up making a justified bad decision.


----------



## luutzu (26 April 2016)

shouldaindex said:


> Just my opinion:
> 
> WOW profits are stuffed, and the baseline is yet to be established.
> 
> ...




Confirmatory bias is real... but maybe instead of avoiding WOW's current price and ignore it completely just to be safe from the "value trap"... maybe estimate its approximate value under various scenarios, then compare it to current market price to see if there's any value/bargain to be have?

Less bias if you have your figure then compare to what the market think, I think.

Possible that the current price is a reflection of the worst bad case scenarios... could also be that some are on holiday and haven't digest the half yearly and it'll hit home with the final AR... Hard to pick the bottom.


----------



## Wicker Chair (8 May 2016)

*Re: WOW Shares Theory!*



sptrawler said:


> I think the same way as you, Woolies has a pretty lean operation, if things get really tight in the retail sector, Woolies only has to worry about Big W, it has already written off Masters.
> 
> Masters was a pizz poor management decision, badly excecuted, luckily they don't have a lot of other baggage. Recovery could be quite quick if they focus on core supermarket performance.
> People still have to eat.




Im not sure that Woolies have a lean operation?
On their labour cost to sales ratio they are almost double Aldi.

And having their credit rating downgraded will make it much harder for WOW to focus on their core supermarket business. Their plan to refurbish stores and cut prices only blows out debt metric to a worse level


----------



## Gringotts Bank (18 July 2016)

WOW's latest TV ad attempts to promote company based on the spurious claim that, once you reach the checkout, your bags will be "packed with pride".  

When that's your _claimed _point of difference, you're better off not advertising.  Who on earth wrote that rubbish?!

Q:  "Why do you shop at Woolies ma'am?"

A:  "Well Aldi have much better prices, their fresh produce is just as fresh as Wollies, but you know I can't help but marvel at how the Woolies checkout chicks shove the stuff in the bags with such pride.  Packing pride is very important to me".


----------



## Gringotts Bank (25 July 2016)

Gringotts Bank said:


> WOW's latest TV ad attempts to promote company based on the spurious claim that, once you reach the checkout, your bags will be "packed with pride".
> 
> When that's your _claimed _point of difference, you're better off not advertising.  Who on earth wrote that rubbish?!
> 
> ...




That didn't take long.

http://www.abc.net.au/news/2016-07-25/woolworths-to-cut-500-jobs/7657166

I don't feel bad at all.  They've screwed primary producers for decades.  I wonder if Aldi treats farmers any better?


----------



## poverty (25 July 2016)

Gringotts Bank said:


> That didn't take long.
> 
> http://www.abc.net.au/news/2016-07-25/woolworths-to-cut-500-jobs/7657166
> 
> I don't feel bad at all.  They've screwed primary producers for decades.  I wonder if Aldi treats farmers any better?




Yeah and up over 8% today


----------



## sptrawler (25 July 2016)

*Re: WOW Shares Theory!*



luutzu said:


> Surprising that their Masters didn't do well given the recent [still going?] property boom. Maybe not so surprising given the deal they made with Anchorage for Dick Smith.
> 
> But true, there's a lot of value in WOW's assets... businesses are supposed to screwed up now and then... Their screw ups haven't kill them, only made them more likely to be Wal-Mart's new beachhead into Australia.




Jeez were we brothers in another life.lol Funny how the Masters death is so slooooow and orchestrated.


----------



## sptrawler (25 July 2016)

Gringotts Bank said:


> WOW's latest TV ad attempts to promote company based on the spurious claim that, once you reach the checkout, your bags will be "packed with pride".
> 
> When that's your _claimed _point of difference, you're better off not advertising.  Who on earth wrote that rubbish?!
> 
> ...




I'm in W.A, and Aldi have just opened, but on first observation it is cheap.
But I don't see a full weeks shop in trolleys.
It seems a bit like the low cost reject shop format. I'm not sure they are going to steal a lot of market share, if the majors get serious.


----------



## notting (26 July 2016)

sptrawler said:


> I'm in W.A, and Aldi have just opened, but on first observation it is cheap.
> But I don't see a full weeks shop in trolleys.
> It seems a bit like the low cost reject shop format. I'm not sure they are going to steal a lot of market share, if the majors get serious.




They have already made the biggest dent in the duopoly since conception of the duopoly.
The trick is not just the cheaper prices it is also the colorful flyer they offer you which has weekly bargains and causes heaps of people who otherwise would not even go to the supermarket on a particular day to go there.  Then the people buy other stuff and get used to the Aldi set up and getting pretty much all they want.  
If WOW were smart they would setup a similar thing offering bargain stuff to get people enthusuasticly going there.  Go on a Saturday morning it can be a frenzy as many bargains don't even last till lunch time.
Very clever!! (I shorted a bit of WOW today)


----------



## Calvin27 (25 August 2016)

notting said:


> The trick is not just the cheaper prices it is also the colorful flyer they offer you which has weekly bargains and causes heaps of people who otherwise would not even go to the supermarket on a particular day to go there.  Then the people buy other stuff and get used to the Aldi set up and getting pretty much all they want.
> If WOW were smart they would setup a similar thing offering bargain stuff to get people enthusuasticly going there.  Go on a Saturday morning it can be a frenzy as many bargains don't even last till lunch time.
> Very clever!! (I shorted a bit of WOW today)




Except they should have done that for masters. Nothing wrong with it (masters) imo, just they tried to do to much too soon without a customer base. Now that they are doing the side bargain bin stuff, I've noticed a lot more traffic. Too late now though.


----------



## Craton (25 August 2016)

Did WOW have Home Hardware before or after Masters?

Either way, they should have concentrated on one and one only. Now their flogging both off, prft...
FWIW: the name Masters (in this context) grates me the wrong way, dunno why, just does...


----------



## tinhat (25 August 2016)

notting said:


> They have already made the biggest dent in the duopoly since conception of the duopoly.
> The trick is not just the cheaper prices it is also the colorful flyer they offer you which has weekly bargains and causes heaps of people who otherwise would not even go to the supermarket on a particular day to go there.  Then the people buy other stuff and get used to the Aldi set up and getting pretty much all they want.
> If WOW were smart they would setup a similar thing offering bargain stuff to get people enthusuasticly going there.  Go on a Saturday morning it can be a frenzy as many bargains don't even last till lunch time.
> Very clever!! (I shorted a bit of WOW today)




The way it used to work in the supermarket trade twenty years ago was that fresh fruit was the loss leader that got people through the door. This was about the time that affordable colour printing technology came to newspapers and mass junk mail. The supermarkets and green grocers started taking out full page ads for loss leading specials (often grapes and bananas) in local papers and started distributing full colour mini-catalogues of current specials. 

The supermarkets rearranged their format so that the fresh produce could be seen from the entrance and was the first aisle shoppers went down after grabbing a trolly. Fresh produce in supermarkets only took off in the late 80s. Before then the supermarkets didn't have the distribution, storage, handling and display capacity for it.


----------



## Ann (5 September 2016)

Looking at the weekly chart for WOW may suggest it is time for consideration. After two years of the EMA falling it is now showing an upward EMA cross over and may see some upside finally. It also offers a DRP for those looking to add to their holding brokerage free!


----------



## mcgrath111 (16 September 2016)

I would think WOW atm is still quite over priced, given the competition it faces in both Coles & Aldi; As I'm sure other users have previously noted.

Supermarkets business:
Struggling heavily and has struggled for the last couple of years due to not providing customers the perception of 'value'. Have countered Coles considerably in this space, however Aldi has now open in SA and WA. 
While I believe the turn around in the supermarket business is well and truly under way, it is likely the rewards won't be recognised straight away. 

Endeavour Drinks Group is performing quite well and is the shining light for WOW, likely to continually report strong growth going forward.

Big W is currently under transformation however competing with the likes of Target and Kmart will be extremely hard; and seems to fail to identify where it fits in the midst. 

Overall WOW's business core business is supermarkets, which is yet to deliver the results of the 'Glory day's' - and while the CEO who (IMO never wanted the job) believes that green shoots are appearing, I don't think they will be enough to stop another substantial fall in the short term.

A fall to 18.5 would not surprise me.


----------



## mcgrath111 (16 September 2016)

Craton said:


> Did WOW have Home Hardware before or after Masters?
> 
> Either way, they should have concentrated on one and one only. Now their flogging both off, prft...
> FWIW: the name Masters (in this context) grates me the wrong way, dunno why, just does...




WOW owned Home hardward before Masters, however largely separated from the broader business. I believe WOW  would still be in the hardware business if Lowe's hadn't exercised the put option.


----------



## Value Collector (16 September 2016)

mcgrath111 said:


> I would think WOW atm is still quite over priced, given the competition it faces in both Coles & Aldi; As I'm sure other users have previously noted.
> 
> Supermarkets business:
> Struggling heavily and has struggled for the last couple of years due to not providing customers the perception of 'value'. Have countered Coles considerably in this space, however Aldi has now open in SA and WA.
> ...




Aldi's sales growth stagnated despite them opening more stores, I think they are starting to struggle now Coles and woollies have decided to push back.


----------



## notting (16 September 2016)

Value Collector said:


> Aldi's sales growth stagnated despite them opening more stores, I think they are starting to struggle now Coles and woollies have decided to push back.




How many of those stores are in new states (where they have almost no saturation yet)? If not many % wise then the damage ain't over yet.
Yet you'd have to think Woolies is looking like it might be turning a corner here.


----------



## ReXXar (17 September 2016)

It seems a lot of people trying to pick a turn here, in my opinion, WOW is an incredibly bad choice.  If anyone bothered to dig through the last annual report, by my calculation there's about $25 BILLION off balance sheet liabilities, on top of the $4.4 billion in debt, gives an Enterprise Value circa $57 billion, which is 200% of the Market Cap.  I've always been wary of WOW management, especially when they lobbied the government not to amend the accounting rules for operating lease to be included in the balance sheet.  Judging by the sale of Dick Smith far less than book value was when I first noticed their incompetence.  Looking at the new CEO, he has yet to prove himself, however the first thing he did was took the typical big bath method, by lumping everything into one bad year, typical popularist CEO.  I'm never been a favour of such CEOs who play around with earning reports this way.  If you think about it logically, the impairment alone wiped out last few year's entire profits.  Looking ahead, they're still being squeezed in a corner without any concrete strategy promising outstanding growth.  Even if they magically wiped off all their debt and off-balance sheet liabilities overnight I'm still staying away.


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## dpgrubesic (19 October 2016)

Maybe time to buy WOW but with increasing competition from Aldi, IGA and possible Lidi does anyone rate this as a buy I'd say it's at least a hold?

They are going to sell there petrol division for a solid sum (most likely). Anyone feel this is a short term opportunity?


----------



## tech/a (19 October 2016)

tech/a said:


> Sorry about the delay been pretty busy.
> 
> *Click to Expand*
> 
> ...






tech/a said:


> Not a bottom but target
> Between $23-$24




You know after Rimatis got a belting I haven't seen him around.

Its a pity as you Fundies miss out on some pretty good stuff from us crazy Techies.

Personally I lost track of this thread when I went O/S for 2 mths
but all 'Extreme" and totally ridiculous targets reached--and surpassed by a fair margin.


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## Gringotts Bank (8 November 2016)

SPC news not good.  If WOW start importing canned fruit from overseas I'm hopeful customers will make the choice to *shop elsewhere*.  Who could forget the hep-A infected fruit that Creative Gourmet imported from China?  This is the sort of crap that *protectionist policy* can prevent.  

What will SPC do now?  Probably what many premium quality producers are forced to do in Australia - jack up prices and sell to the Chinese.


----------



## sptrawler (8 November 2016)

Gringotts Bank said:


> SPC news not good.  If WOW start importing canned fruit from overseas I'm hopeful customers will make the choice to *shop elsewhere*.  Who could forget the hep-A infected fruit that Creative Gourmet imported from China?  This is the sort of crap that *protectionist policy* can prevent.
> 
> What will SPC do now?  Probably what many premium quality producers are forced to do in Australia - jack up prices and sell to the Chinese.




From this ABC report, it sounds as though there is two sides to the story.

http://www.abc.net.au/news/2016-11-...-agreement-with-spc-ardmona-victorian/8004304

Particularly this comment by Woolies CEO.

*Woolworths chief executive Brad Banducci said the company was committed to an ongoing relationship with SPC Ardmona.

"We're talking about the volumes that can be supplied and the consistency," he said.*

Maybe the quality being supplied is dropping, while the top shelf product is being exported?

I know that happens here in W.A a friend of mine's uncle, had orchards, all the top quality fruit was exported. seconds were sold locally.

I don't think a protectionist policy helps the situation, it just supports companies bad behaviour.


----------



## sptrawler (8 November 2016)

The other thing on further reading, they are still sourcing the product (tomatoes) from Australia.

http://www.smh.com.au/business/retail/woolworths-dumps-spc-ardmona-tomatoes-20161108-gskmbd.html

Relevant quote:

Woolworths head of buying Stephen Donohue said the chain had struck a deal to buy tomatoes from a local provider, who sourced fruit from the Murray Valley region in Victoria.

Sounds to me like CocaCola spc, may have shot themselves in the foot, another example of a level playing field not being that level.

It seems to me, that the U.S loves globalisation, as long as it all goes their way.


----------



## McLovin (8 November 2016)

Gringotts Bank said:


> What will SPC do now?  Probably what many premium quality producers are forced to do in Australia - jack up prices and sell to the Chinese.




And that's a problem?

Is SPC really considered a premium quality producer? I always thought they were at the cheap and nasty end. Isn't all canned fruit?


----------



## Gringotts Bank (8 November 2016)

McLovin said:


> And that's a problem?
> 
> Is SPC really considered a premium quality producer? I always thought they were at the cheap and nasty end. Isn't all canned fruit?




I thought they supplied fresh produce as well.  I'm back in the 1920's.  Good, ship it all to the highest overseas bidder.


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## McLovin (8 November 2016)

Gringotts Bank said:


> I thought they supplied fresh produce as well.  I'm back in the 1920's.  Good, ship it all to the highest overseas bidder.




Nup, it's all packaged stuff. I've tried their tinned tomatoes, they're pretty cr@p. San Marzano all the way. Even the regular Italian tinned ones are usually cheaper than Ardmona anyway and about 1000x better.


----------



## sptrawler (8 November 2016)

Also I would hazard a guess, Wooolies is more Australian owned than SPC. 
If I'm right, I would rather they focused on quality Australian product, than pandering to a multinational.
It's about time Australian companies, forgot about economies of scale and started supporting small producers.

Also, I'm not a small producer, other than the small amount of crap I talk on here.

If they don't they will become, slaves to the multinationals overseas suppliers.


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## Klogg (9 November 2016)

sptrawler said:


> It's about time Australian companies, forgot about economies of scale and started supporting small producers.




Why? Economies of scale make things cheaper for the consumer, ultimately improving the standard of living. The idea behind supporting small producers because it's better for the local economy is a farce.

I'd rather they provide reasonably priced products, with a range in quality (so long as they all meet minimum standards)



> If they don't they will become, slaves to the multinationals overseas suppliers.




Again, why? This isn't an industry that is easily open creating a monopoly or duopoly. If one or two suppliers hold a bit of power, ultimately additional capital will come in and set prices properly.


----------



## sptrawler (9 November 2016)

Klogg said:


> Why? Economies of scale make things cheaper for the consumer, ultimately improving the standard of living. The idea behind supporting small producers because it's better for the local economy is a farce.
> 
> I'd rather they provide reasonably priced products, with a range in quality (so long as they all meet minimum standards)



As I said SPC, as far as I know, is majority O/S owned and probably supplies numerous companies and Countries. 
Woolies purchase some product off them, and home brand it, therefore economies of scale hardly come into it. 
It would impact Woolies, if SPC where supplying all or most of Woolies product, but they don't. Therefore sourcing one or more of your product line from a smaller producer, may have benefits, if the supplied product is of better quality and price than the multinational is supplying.
Just because SPC has economies of scale, doesn't mean they pass that economy on, if they can get more money for the product O/S, the better fruit will go there.
A smaller producer may not have the same access to O/S markets, that the mutinational has, therefore may be in a better position to service the local market. 




Klogg said:


> Again, why? This isn't an industry that is easily open creating a monopoly or duopoly. If one or two suppliers hold a bit of power, ultimately additional capital will come in and set prices properly.


----------



## Ves (9 November 2016)

sptrawler said:


> As I said SPC, as far as I know, is majority O/S owned and probably supplies numerous companies and Countries.



Hmm,  isn't SPC Ardmona still owned by Coca Cola Amatil  (listed ASX:  CCL)?


----------



## sptrawler (9 November 2016)

Ves said:


> Hmm,  isn't SPC Ardmona still owned by Coca Cola Amatil  (listed ASX:  CCL)?




I think Coca Cola has a major stake in Coca Cola Amitil, a bit like a subsidary of the parent company. Not sure how it works but I'm pretty sure Coca Cola has a major stake in all Coca Cola operations.


----------



## Ves (9 November 2016)

sptrawler said:


> I think Coca Cola has a major stake in Coca Cola Amitil, a bit like a subsidary of the parent company. Not sure how it works but I'm pretty sure Coca Cola has a major stake in all Coca Cola operations.



They own 29.21% according to the latest Annual Report.


----------



## sptrawler (9 November 2016)

Ves said:


> They own 29.21% according to the latest Annual Report.



Well I don't think many other entities, would have anywhere near that holding, which would give Coca Cola a major say in the operation of said company.IMO


----------



## sptrawler (1 February 2017)

From a personal point of view, I think Woolies have lifted their game, it will be interesting to see the results post Masters exit.


----------



## PZ99 (1 February 2017)

They had a good Christmas as reported. Curious as to whether they'll lift the Divvy in a month.
Maybe back to 44c?


----------



## sptrawler (1 February 2017)

Well with the impost of Masters gone, it should reduce the drag somewhat, also management focus would have been distracted somewhat.lol


----------



## mcgrath111 (10 February 2017)

Im unsure why analyst put emphasis on like for like sales for WOW theyve been crap for the last few years its like saying 'hey we did bad, but not as bad as last year, wohoo!"

"Having said that, Coles is competing with second-quarter like-for-like sales growth of 5.3 per cent from the same time last year and Woolworths is competing with a negative 1.2 per cent result."

Aldi is killing it, produce is great and booze selection is improving...which will in the future hurt bws / dan murphys.

It seems wow gets propped up by the big funds, regardless of the poor results they continue to release.
Less poor results this year will probably shoot it toward the high 20's


----------



## notting (10 February 2017)

Sounds like you resistance is your buy signal.  Who cares why.  The markets taking it up.


----------



## sptrawler (28 February 2017)

mcgrath111 said:


> Im unsure why analyst put emphasis on like for like sales for WOW theyve been crap for the last few years its like saying 'hey we did bad, but not as bad as last year, wohoo!"
> 
> "Having said that, Coles is competing with second-quarter like-for-like sales growth of 5.3 per cent from the same time last year and Woolworths is competing with a negative 1.2 per cent result."
> 
> ...



The thing with Woolies, IMO, is they aren't top heavy.
If Australian consumer spending keeps contracting, only the slim and nimble will survive.
Maybe that is why WES is trying to offload their coal interests, they need to trim down.
Wesfarmers had a dream run, while Woolies were propping up Masters, now that is offloaded, their only baggage is Big W.
Wessies are hamstrung with Target, Officeworks, Kmart and coal mines, I think this whole retail sector contraction has a long way to go.
Amazon, Costco, Aldi and Alibaba are going to make life very interesting, Wessies have to get lean quick.
Woolies are nearly there, just my opinion.
I do have holding in both WOW and WES, and have no preference, both will have their day in the sun.IMO


----------



## Quant (28 February 2017)

Totally agree sptrawler , WOW have taken their medicine and paid the price and the risk now lies more heavily on the other mob  , This is a WES v WOW spread chart and i seriously doubt its gets wider , contraction would be my probability  , i think there is some pairs trades in this to come  fwiw


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## mcgrath111 (2 March 2017)

sptrawler said:


> The thing with Woolies, IMO, is they aren't top heavy.
> If Australian consumer spending keeps contracting, only the slim and nimble will survive.
> Maybe that is why WES is trying to offload their coal interests, they need to trim down.
> Wesfarmers had a dream run, while Woolies were propping up Masters, now that is offloaded, their only baggage is Big W.
> ...



Agree WOW isn't top heavy.
Don't think WES needs to change too dramatically, it's a great company with great managment IMO. 
But retail sector likely does have a way to go, in regards to contraction - could take a while though.

Also WES is separated into individual Pillars (Can't think of the correct terminology), while it is a behemoth of a company, this separation allows each of the divisions to operate as essentially there own entity; hence I'd dare say just as lean as WOW. 

It sounds like I hate WOW and love WES, but I don't hold either.

As mentioned last month, I think WOW's SP will continue to move up and will likely improve from prior years.

Anywho, I'm rambling; but after all that I agree both will have there day in the sun.


----------



## sptrawler (2 May 2017)

Woolie's had a great result today. Big W still a problem, IMO they will have to decide whether to throw it overboard.
There are too many department stores and general merchandise stores, to compete successfully with online offerings, sooner or later some are going to have to bail out.
Food is something people have to go out and buy, most general merchandise isn't critical, so people don't mind ordering on line and waiting.
Again just my opinion.
I do hold WOW


----------



## RandomInvestor (2 May 2017)

Hey guys for last 2 weeks or so been analyzing Woolworths I have done this by reading 8 or so years of annual reports. I looked at stuff like their earnings,debt, etc. Though I don't full understand their financials, like their statements are a bit weird for example one year in the financial statement will show for example "Current tax payable" in the others won't.

Also something weird which I didn't get this was in a few of their annual reports it says "The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes." but in their annual reports it shows they do engage in derivatives I'm confused?

My reasons to why they are a solid company:

(Some financials have been affected because of the 2016 Masters shutdown)
* Consistent dividend payments for over 10 years.
* High earnings that are steadily increasing 
* High rate of return on equity
* High rate of return on assets
* High Return on Invested Capital
* Good management

 I am pretty sure their financials are legit from reading the footnotes nothing too sus. 

Their increase in debt does worry me its one of their bigger risks.
The soon arrival of Amazon is worrying competitor for Woolworths as Amazon is looking to introduce their fresh food service 

I haven't done any intrinsic value calculation because I don't have a method yet of determine intrinsic value, and I definitely don't want to use dcf as I am almost 100% guaranteed to make completely wrong forecasts, especially as a beginner.

What else do you guys think I should of included in my analysis?


----------



## sptrawler (2 May 2017)

There is already a WOW (woolworths) thread, if you want to discuss them, try posting in that thread.
Don't mean to be blunt but, there would be zillions of threads, without some sort of order, check out FORUMS, Stock chat, forums Q - Z
I'm suprised, that you have a 170 posts and don't realise the format.


----------



## luutzu (2 May 2017)

RandomInvestor said:


> Hey guys for last 2 weeks or so been analyzing Woolworths I have done this by reading 8 or so years of annual reports. I looked at stuff like their earnings,debt, etc. Though I don't full understand their financials, like their statements are a bit weird for example one year in the financial statement will show for example "Current tax payable" in the others won't.
> 
> Also something weird which I didn't get this was in a few of their annual reports it says "The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes." but in their annual reports it shows they do engage in derivatives I'm confused?
> 
> ...





Here's the secret to making forecasts, ready? Super secret stuff no one will tell you: open up the company's latest news release and/or presentation. Turn to where they say "expected" growth.

Then when you want to be real smart and real careful... here's what you do: Turn to MorningStar and look up "consensus" forecast.

Combine the two sources, get a bit creative and independent by putting up another growth scenario somewhere in between. 

Done.

[you probably think I'm kidding]. 

----------------------------


----------



## luutzu (2 May 2017)

RandomInvestor said:


> Hey guys for last 2 weeks or so been analyzing Woolworths I have done this by reading 8 or so years of annual reports. I looked at stuff like their earnings,debt, etc. Though I don't full understand their financials, like their statements are a bit weird for example one year in the financial statement will show for example "Current tax payable" in the others won't.
> 
> Also something weird which I didn't get this was in a few of their annual reports it says "The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes." but in their annual reports it shows they do engage in derivatives I'm confused?
> 
> ...





WOW is an alright company, but not a great one. I mean you're right that it's a "solid" company, but there are better retailers. Maybe not in Australia but yea.

Here's how you can tell if a company is a great one: Look at its contributed equity.

You'd want a company that rarely wants to, or need to, raise more cash from its shareholders. If they do, you'd want to see a good return on it over the coming years. WOW hasn't really done that.

It pay a steady dividend out of its earning, barely retain much, which can be a good thing in most cases... but here it shows management hasn't been trying or there's not much room they can grow into - maybe all that cash are returned as dividend. Then there's that Masters flop.












See how WOW's contributed equity is proportionately high compare to its retained earnings?
Its Net Operating Cash and profit, while generally rises, barely move much from those billions in new shareholder fund.

Contrast that to WalMart or McColl's.



And oh, you'd probably want to look at its cash conversion cycle. Very important for the fresh food people.

WOW's CCC is quite impressive. Not as good as McColl's in the UK, but it's great.


----------



## sptrawler (2 May 2017)

Again Iuutzu, I would say move it over to the WOW thread, it is great points but needs to be in the right place.
In the general chat/beginers lounge section it just gets swallowed up, just my opinion.
By the way great charts.
May be a bit population biased, as they have a lot more people serviced by a lot less mega stores.


----------



## luutzu (2 May 2017)

sptrawler said:


> Again Iuutzu, I would say move it over to the WOW thread, it is great points but needs to be in the right place.
> In the general chat/beginers lounge section it just gets swallowed up, just my opinion.
> By the way great charts.
> May be a bit population biased, as they have a lot more people serviced by a lot less mega stores.




True. And True.

Australia is a wide country with very few people. So yea, I think you're right that it's quite alright for WOW to not lose money.


----------



## sptrawler (2 May 2017)

I think Woolie's, Westfarmers, Harvey Norman and JB are going to have to re assess their model.
Amazon is going to out the ebay model completely, they are going to warehouse the produce, so wait time is cut by heaps.
This will put a huge amount of pressure on retailers of electronic and white goods, because won't be paying the floor space rental.
I'm not sure it will be a long term hit, as not everyone will be happy with what they recieve, as opposed to what they thought they would recieve.
But that takes a while to filter through, before that happens, there will be a lot of collateral damage.IMO


----------



## RandomInvestor (3 May 2017)

Ah ok thanks very interesting. I haven't really compared it to other retailers.


----------



## RandomInvestor (3 May 2017)

luutzu said:


> Here's the secret to making forecasts, ready? Super secret stuff no one will tell you: open up the company's latest news release and/or presentation. Turn to where they say "expected" growth.
> 
> Then when you want to be real smart and real careful... here's what you do: Turn to MorningStar and look up "consensus" forecast.
> 
> ...



I do think ur kidding lol surely it can't be that simple.


----------



## McLovin (3 May 2017)

RandomInvestor said:


> Also something weird which I didn't get this was in a few of their annual reports it says "The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes." but in their annual reports it shows they do engage in derivatives I'm confused?




They're not saying they don't use derivatives, they're saying they don't use them to speculate on price movements...ie they're used as a hedging instrument.


----------



## luutzu (3 May 2017)

sptrawler said:


> I think Woolie's, Westfarmers, Harvey Norman and JB are going to have to re assess their model.
> Amazon is going to out the ebay model completely, they are going to warehouse the produce, so wait time is cut by heaps.
> This will put a huge amount of pressure on retailers of electronic and white goods, because won't be paying the floor space rental.
> I'm not sure it will be a long term hit, as not everyone will be happy with what they recieve, as opposed to what they thought they would recieve.
> But that takes a while to filter through, before that happens, there will be a lot of collateral damage.IMO




Yea they better pick up their game and better serve the customers. I noticed when overseas that our grocery prices are pretty high - the typical fruits like strawberries/berries are something like twice as much. Could be due to the distance, logistics and fewer people... or just duopoly at work.

There's an actual promotion from Coles recently where if you turn up before noon, all their checkouts will have people serving you.    It is a kind of reward I guess, seeing how I am surprised and feel honoured when one of my big trolley got directed to a checkout person. 

As to eBay and Amazon... I don't know enough to have a guess at how that'll change the environment. I mean they've both been around a while and besides the electronics and other rubbish we don't need much of anyway, it'll be hard to compete against the established network. 

I think woolies and coles are playing it safe and now have those click and pick up where their once-checkout person now pick orders and have it ready for you at the shop. That's a bit inefficient but I guess it's cheaper for lazy people who would drive all that way to the shop but can't be asked to do their own shopping.


----------



## luutzu (3 May 2017)

RandomInvestor said:


> I do think ur kidding lol surely it can't be that simple.




Told you it's a secret.

It's just my guess of how the "pro" does their estimates anyway. I've seen quite a few companies that missed their own sales forecast and the market really hammer them. From that you can figured that the analyst don't actually do their own research - if they did, and if those research of theirs are any good, sales disappointment won't surprise them much, if at all.

That and if you use a certain rule of thumb to value the stock, you'll noticed that the market current price are generally in line with the latest reported earnings and management's growth forecast.


----------



## Quant (3 May 2017)

FWIW , I have no view


----------



## RandomInvestor (3 May 2017)

McLovin said:


> They're not saying they don't use derivatives, they're saying they don't use them to speculate on price movements...ie they're used as a hedging instrument.



Ah ok thanks.


----------



## sptrawler (3 November 2017)

Things are starting to look brighter for Woolies, now to sort out Big W or off load it, before Amazon gets up and running.
My call, would be come up with something that differentiates it from K Mart, maybe an internet cafe and food/coffee section.
Fast food, still seems to be high on peoples entertainment priority list.


----------



## System (11 December 2017)

On December 11th, 2017, Woolworths Limited changed its name to Woolworths Group Limited.


----------



## sptrawler (5 February 2018)

Well Woolies appear to be on the right track, according to Citi.
http://www.smh.com.au/business/reta...ars-to-come-analysts-say-20180202-p4yzar.html
From a personal perspective, they do seem to be turning Big W around, at least now it appears to be refocusing on product lines.
The last few years Big W was just like a woolies supermarket, which sold general junk, and clothes instead of food.
Lately they seem to be stocking, a much more diverse product inventory, should be interesting when they next report.
The other issue that is helping of course, is Wesfarmers having their Masters moment, in the U.K. 
The good ship WES, appears to have a bit of a list at the moment and management seem to have their hands full righting it.


----------



## notting (5 February 2018)

Does it really matter what they stock.  Does anyone even go in there?


----------



## sptrawler (5 February 2018)

notting said:


> Does it really matter what they stock.  Does anyone even go in there?



Over here in W.A, there seems to be more foot traffic in Big W, than was apparent 3 months ago, don't know about over East.
I hold both WES and WOW, so am probably more interested, on that basis.


----------



## luutzu (5 February 2018)

sptrawler said:


> Over here in W.A, there seems to be more foot traffic in Big W, than was apparent 3 months ago, don't know about over East.
> I hold both WES and WOW, so am probably more interested, on that basis.




WOW on weekends are packed where we go. Their newer stores do look pretty good and they are either lying or there's a lot of those yellow sales stickers. So I always think I'm getting a bargain and load up more than I need to, dam it!

Big W aren't too bad either. I don't shop there often but the prices seems alright for stuff I need.


----------



## notting (6 February 2018)

I was actually referring to Big W.  Woolies is fine


----------



## sptrawler (6 February 2018)

notting said:


> I was actually referring to Big W.  Woolies is fine



Yes I noticed that, I was actually surprised with my local Big W last week, when I had call to go there.
About 10 years ago the store lost its way and went from a very busy store, to somewhere no one went, including me.
Anyway cutting a long story short, I got the shock of my life last week when I went there, obviously someone who gives a $hit has become involved.
The store had a lot more selection, of a lot more diverse products, so maybe it is the start of a turnaround.
If so it is about time, I actually thought they may do a Dick Smiths and off load it, but having seen the new products it will be interesting to see if it turns Big W fortunes around.
It may well turn out to be too little too late, time will tell.


----------



## sptrawler (23 February 2018)

Anecdotal evidence is proving to be true, in Woolies case, a pretty good result in the face of a lot of competition.
http://www.abc.net.au/news/2018-02-23/woolworths-half-year-results/9472090


----------



## greggles (28 June 2018)

Woolworths back above $30 for the first time since early 2015. The last two months have been particularly bullish for WOW. Third quarter sales were better than expected.


----------



## sptrawler (5 July 2018)

WOW at last seem to be working to plan, Brad Banducci seems to have his head screwed on the right way. IMO

https://www.smh.com.au/business/com...-marriage-of-convenience-20180705-p4zpme.html


----------



## nulla nulla (6 July 2018)

For what it is worth, I suspect Woolworths is on the threshold of posting a significant profit improvement for 2018-2019. Apart from the turnaround plan, they are well positioned to make huge gains to their wages bill through the penalty rate cuts the came into effect on July 1st. This will show in their hotel, supermarket and Big W divisions.


----------



## poverty (11 July 2018)

nulla nulla said:


> For what it is worth, I suspect Woolworths is on the threshold of posting a significant profit improvement for 2018-2019. Apart from the turnaround plan, they are well positioned to make huge gains to their wages bill through the penalty rate cuts the came into effect on July 1st. This will show in their hotel, supermarket and Big W divisions.




Are you sure about this?  Woolworths workers aren't paid award rates they are paid according to an EBA agreement negotiated through the SDA Union.  That agreement hasn't changed on July 1st.  The staff are not going to be paid any less.


----------



## Craton (11 July 2018)

FWIW, locally our Big W has closed up shop as at the end of June 2018. One of about 80+ Big W stores closed nationwide I believe.
No amount of lease negotiations nor the fact that the store has never traded at a loss (from a reliable source - its who you know *wink*) stopped this closure.

When our store reduced or stopped having paint, hardware, auto products, outdoor and more, no doubt due to Masters (closest Masters was 330km away), the writing was on the wall. Anyways, it always comes down to the bean counters whims and bugger the local economy and the people.

As far as I'm concerned, again here locally, is that all Woolies has done is left the door wide open for a competitor to fill the void. Oh, and if they think we will buy from the Big W online site, think again. The cost may be attractive but freight/shipping costs is always a deal killer due to distance. I, like many fellow locals I'm sure, will travel either the 330km or 500+km to our closest major shopping centres and avoid Big W like the plague.


----------



## kid hustlr (31 October 2018)

Pretty tough environment right now and I stress that my stats say I'm not great at these type of trades but possibly a bit of demand coming into the defensive bell weather security that is WOW


----------



## sptrawler (13 May 2019)

Has anyone any info on the buyback, I only have sketchy info and am thinking of putting the lot up, as it is in the smsf.
Any thoughts appreciated, not home until Wednesday, so info would be appreciated.


----------



## sptrawler (17 May 2019)

Oh well, put my WOW up for buyback, now watch the market crash.


----------



## sptrawler (3 July 2019)

No sooner have Woolies sold off their petrol stations, it sounds like they are going to demerge their hospitality and pokie industry.
It sounds as thought they are trying to become lean and mean, which in this economy seems smart, to me.


----------



## PZ99 (3 July 2019)

Woolies did well during the GFC as people stayed at home to eat.

But they might want to do something about Big W before anything else.


----------



## sptrawler (3 July 2019)

PZ99 said:


> Woolies did well during the GFC as people stayed at home to eat.
> 
> But they might want to do something about Big W before anything else.



I think I read they are closing 30 stores and looking at offloading the rest, I think it is a dead model, the internet is murdering it.


----------



## Garpal Gumnut (3 July 2019)

I can see Solly Lew or WES doing a t/o on a cashed up WOW after the sale once the imminent GFC hits.

gg


----------



## sptrawler (18 July 2019)

Well the Big W closures commence.

https://au.yahoo.com/finance/news/big-w-confirms-first-three-stores-close-doors-014216699.html


----------



## tinhat (18 July 2019)

The old investment thesis was that Woolworths and Coles were blue-chip conservative cash cow dividend payers - "people still need to eat in a recession". Earnings growth = inflation plus net migration, was the analysis I once heard.

Look back over financial ratios of WOW. Up until 2016 return on equity was, year on year, always over 25%. Since then it's been hovering around 15%. Earnings growth was averaging solidly in the double figures up until about 2012, since then it has been single figures only.

Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance. Those days are over and never coming back. I sold out of my WOW and WES a few years ago.

I tend to buy a lot of clothes and homewares over the internet and a lot of our groceries now come from Aldi. Mind you, as someone transitioning into old fart status, I did pick up some of these recently; which is kind of the point, how much profit is there in selling a $8 shirt or $5 t-shirt. I used to buy second hand shirts from Vinni's or Salvo's but Big W is cheaper!


----------



## sptrawler (18 July 2019)

tinhat said:


> The old investment thesis was that Woolworths and Coles were blue-chip conservative cash cow dividend payers - "people still need to eat in a recession". Earnings growth = inflation plus net migration, was the analysis I once heard.
> 
> Look back over financial ratios of WOW. Up until 2016 return on equity was, year on year, always over 25%. Since then it's been hovering around 15%. Earnings growth was averaging solidly in the double figures up until about 2012, since then it has been single figures only.
> 
> ...



Yes, it ain't what it used to be, I bought Woolies at $2.40, it might be time to move them on.


----------



## barney (22 July 2019)

sptrawler said:


> *I bought Woolies at $2.40*




 …. $2.40

That is a bona fide *WOW* ….


----------



## sptrawler (22 July 2019)

barney said:


> …. $2.40
> 
> That is a bona fide *WOW* ….



Not really, it was nearly 30 years ago, when they were spun out of Adelaide Steamships. Lol


----------



## barney (22 July 2019)

sptrawler said:


> Not really, it was nearly 30 years ago, when they were spun out of Adelaide Steamships. Lol




I still think its impressive  …..


----------



## Kremmen (16 September 2019)

tinhat said:


> Woolworths and Coles net profit margins have always been very thin, but they relied on their duopoly dominance.



That seems like understatement to me. They grew as they headed towards a duopoly, killing off Franklins and most of the independent competitors. Where can they grow now, with more competitors (Aldi, Costco, etc) entering the market? I don't understand why their price has kept rising and also am thinking of selling out despite the large capital gain. (Not as large a gain as some here, but still purchased under $3.)


----------



## barney (16 September 2019)

Kremmen said:


> (Not as large a gain as some here, but still purchased under $3.)




Take the rest of the year off


----------



## PZ99 (16 September 2019)

Any buy under $3 is a freehold if you include the divvies 

I'd be more inclined to hold going off the restructuring plans over the next decade.

Automation expected to play a big part in this.


----------



## sptrawler (16 September 2019)

Kremmen said:


> That seems like understatement to me. They grew as they headed towards a duopoly, killing off Franklins and most of the independent competitors. Where can they grow now, with more competitors (Aldi, Costco, etc) entering the market? I don't understand why their price has kept rising and also am thinking of selling out despite the large capital gain. (Not as large a gain as some here, but still purchased under $3.)



I was thinking along the same lines as you and sold out recently, I replaced them with AFI, the reasoning behind the move was to increase the dividend stability in the SMSF.
I think WOW are a great company and will have no hesitation getting back in, just at the moment with the added competition for WOW I will wait and see their next set of figures.
The other plus for my situation was, I sold them into the SMSF years ago, so the CGT wasn't an issue. I probably would have had to have thought harder, on the decision if CGT, had been involved.
Long term I think WOW will always do well, just how well remains to be seen.
Just my opinion. I don't hold.


----------



## sptrawler (17 September 2019)

Woolies going into subscription home delivery, I'm not sure on the viability of this one, unlike netflix delivery is by vehicle not over the cable. It may carry more overheads than it makes. IMO

https://www.smh.com.au/business/com...hes-subscription-service-20190917-p52s2g.html


----------



## Garpal Gumnut (17 September 2019)

sptrawler said:


> Woolies going into subscription home delivery, I'm not sure on the viability of this one, unlike netflix delivery is by vehicle not over the cable. It may carry more overheads than it makes. IMO
> 
> https://www.smh.com.au/business/com...hes-subscription-service-20190917-p52s2g.html



Certainly in the regions, WOW is way ahead of COL for value and diversification.... Pubs, grog, fuel, food.

I haven't been to an Aldi or other such but I would imagine in large bogan cities such as Sydney, Melbourne and Brisbane they would be having an effect on the bottom line of both. 

I bought back in to WES recently as they seem to have the retail mix sorted, as well as their other diversified activities. 

gg


----------



## Garpal Gumnut (29 March 2020)

Stick with a good business model.

May fall but will stabilise or rise faster than penny stocks imo.

gg


----------



## Dona Ferentes (29 March 2020)

sptrawler said:


> Woolies going into subscription home delivery, I'm not sure on the viability of this one, unlike netflix delivery is by vehicle not over the cable. It may carry more overheads than it makes. IMO
> 
> https://www.smh.com.au/business/com...hes-subscription-service-20190917-p52s2g.html



It's for food. "_Australian shoppers can now include Woolies alongside their monthly Netflix and Spotify bills, with the supermarket giant launching a new subscription service for grocery delivery._

_Called '*Delivery Unlimited'*, customers receive free delivery on their weekly shop for a monthly or annual fee, provided they spend more than $100 on each order."_

(and WOW owns 30% of Marley Spoon Aust ... ASX: MMM - probably some insights from them? )


----------



## sptrawler (29 March 2020)

Dona Ferentes said:


> It's for food. "_Australian shoppers can now include Woolies alongside their monthly Netflix and Spotify bills, with the supermarket giant launching a new subscription service for grocery delivery._
> 
> _Called '*Delivery Unlimited'*, customers receive free delivery on their weekly shop for a monthly or annual fee, provided they spend more than $100 on each order."_
> 
> (and WOW owns 30% of Marley Spoon Aust ... ASX: MMM - probably some insights from them? )



Six months is a long time in shopping. OMG


----------



## Garpal Gumnut (7 May 2020)

A *cheque out* chick of my acquaintance tells me that there has been a cost blowout which will negate the increase in cash flow at WOW over the last three months.

gg


----------



## sptrawler (7 May 2020)

Garpal Gumnut said:


> A *cheque out* chick of my acquaintance tells me that there has been a cost blowout which will negate the increase in cash flow at WOW over the last three months.
> 
> gg



Probably theft, the way they seem to be beefing up security, recently.


----------



## InsvestoBoy (7 May 2020)

sptrawler said:


> Probably theft, the way they seem to be beefing up security, recently.




More likely to be personnel costs right? All the hiring they did?

Security beef up because people keep abusing the staff, what kind of idiot scum abuses some poor kid earning minimum wage stacking shelves and breathing everyones coughs.


----------



## Country Lad (7 May 2020)

Garpal Gumnut said:


> A *cheque out* chick ...........



 They still take *cheques*?  Do they *check* first that it won't bounce?


----------



## Garpal Gumnut (7 May 2020)

Country Lad said:


> They still take *cheques*?  Do they *check* first that it won't bounce?






sptrawler said:


> Probably theft, the way they seem to be beefing up security, recently.




It wasn't a checkout chick. 

It was a* cheque out* chick who fills bags with numbers, bags and bags and bags of them. 

And she says the costs are increasing with the sales, and out of proportion.

gg


----------



## PZ99 (7 May 2020)

More people eating at home + supply chain overtime for all that toilet paper and other essentials would be my guess.


----------



## Dona Ferentes (9 May 2020)

CEO Brad Banducci has given insight into the products that are selling out in stores across Australia – and they’re very surprising. While pasta, baking items and toilet papers have been in hot demand in recent months, the Woolies boss says Australians are now buying more exotic ingredients.

“While the slow cooking movement continues, we’re also becoming increasingly adventurous,” he said. "Ingredients such as cardamom, saffron and dried sesame seeds have doubled in sales. Roasted peppers are up 65%, Asian and hot chilli sauces are both up 40% and capers are up 35%."

_“We’re also well into soup season. What’s interesting this year is the explosive growth of dried soup mix packets (up 200%) as people make more warming soup at home."

“It’s also interesting to see customers think about their health, with a big rise in vitamin sales, plus ground ginger and turmeric sales up 120% and sauerkraut up 76%.

“On a related topic, sales of cough and cold products are much lower this year compared to last year."_


----------



## sptrawler (7 September 2020)

The ACCC is to investigate, Woolworths proposed takeover of PFD food services.


----------



## Trav. (25 January 2021)

WOW looking strong and hopefully will to hold the break of $41

I am looking for SP to return to pre covid price so we will see how it goes.

Holding @ 39.32


----------



## Dona Ferentes (25 February 2021)

Woolworths did everything right in the six months to December with revenue and earnings up strongly, a dividend increase for shareholders and the demerger of its $10 billion Endeavour drinks and pubs division on track for a move by this June (documentation could be issued as soon as next month).

While some reports on Woolies half year focused on the way its sales growth in the first weeks of 2021 was stronger than Coles , some 8% v 3.3%, the more important points for investors was the way sales and profits grew in the half year.

But like its rival, Woolies also warned investors that the June quarter performance and perhaps beyond, will see the company come off the boil.


> _Looking ahead to the rest of the financial year, we expect sales to decline over the March-to-June period compared to the prior year in all our businesses, with the exception of hotels where venues were closed for much of the final four months last year, as we cycle last year’s COVID surge_," CEO Brad Banducci said. “_However, in parallel, we also expect COVID-related costs to be materially below the prior year, subject to no further widespread prolonged lockdowns."_


----------



## sptrawler (25 February 2021)

Absolutely agree with the comment Donna, there is no way people will be buying prepper stores, like toilet paper next year.
Well unless another once in a lifetime event happens, Ive seen a few.lOL


----------



## Joules MM1 (24 June 2021)

if we were at the bottom of an index bear  this thing would have everyone chatting.....
any bets on how long todays demerger price gap will stay open ?
(and not like it was a secret to those that needed to know, right!)


----------



## cutz (24 June 2021)

Link to ETO adjustment notice if anyone's interested.






						Woolworths Group Limited (WOW) Demerger of Endeavour Group Limited (EDV) - Adjustment Implications for ETOs
					

This Notice is being issued to provide Participants with further information on the Adjustment implication for WOW ETOs.




					www.asxonline.com


----------



## cutz (25 June 2021)

Hmmm.

Judging by todays action, there seems to be some pivoting into the more lucrative booze and pubs biz..


----------



## divs4ever (9 September 2021)

Retirement of Michael Ullmer AO, and appointment of Philip Chronican
Woolworths Group today announces that Michael Ullmer AO will retire at the conclusion of the 2021 Annual General Meeting (AGM) after more than nine years of distinguished service as a non-executive director. Woolworths Group Chairman, Gordon Cairns, said: “I’d like to thank Michael Ullmer for his invaluable contribution during a period of significant transformation and growth for Woolworths Group. Michael has been a source of wisdom and sage advice for the Board, the executive team and for me personally.” Michael Ullmer is currently a member of Woolworths Group’s Audit & Finance Committee, the Risk Committee, the People Committee and the Nomination Committee. As part of the Board renewal program, the Board undertook a process to identify a suitable candidate to succeed Michael Ullmer, and today announced that Philip Chronican will join the Board as a non-executive director effective 1 October 2021, subject to completion of relevant licensing approvals. Philip Chronican is currently Chair, National Australia Bank, Chair, Westmead Institute for Medical Research, and Non-executive Director, National Foundation for Australia-China Relations. His former directorships include Bank of New Zealand, NSW Treasury Corporation and the Juvenile Diabetes Research Foundation. Philip Chronican has more than 38 years of experience in banking and finance across Australia and New Zealand, having led significant businesses at Westpac and ANZ Bank. He was the Group Chief Financial Officer of Westpac and its Institutional business consecutively. At ANZ he was CEO Australia responsible for the bank’s retail and commercial businesses from 2009 to 2015. He has broad experience in mergers & acquisitions and post-merger integration, and has taken an active role in advocating for greater transparency and ethics in banking, and promoting workforce diversity. Woolworths Group Chairman, Gordon Cairns, said: “I am delighted that the Board was able to find an experienced and outstanding candidate in Philip, following the conclusion of a thorough and externally-supported search process.” Philip Chronican will stand for election at the 2021 AGM.

 DYOR

 i hold WOW  ( and have sold down 90% of the inherited holding  in the last 10 years )

 hoping to buy their way out of trouble perhaps  ( more acquisitions ?? )

 am not sure what another banker can do to turn around WOW now it has finally shed the drinks division ( EDV )


----------



## KevinBB (18 October 2021)

I love these off-market buy backs. Fully franked dividend of $30.15, with a capital loss to allocate against other capital gains 

KH


----------



## divs4ever (14 December 2021)

Woolworths Group H1 F22 trading update
Summary
● Australian Food sales and customer NPS remain strong relative to the overall market
● Direct and indirect COVID costs have impacted H1 F22 EBIT, with Australian Food
EBIT expected to be $1,190 million to $1,220 million
● Positive sales momentum going into Christmas with improved Group financial
performance expected in H2
Overview
Woolworths Group today provides an update on its financial year 2022 first half trading
performance.
Woolworths Group CEO, Brad Banducci, said: “The first half of F22 has been one of the
most challenging halves we have experienced in recent memory due to the far-reaching
impacts of the COVID Delta strain and its impact on our end-to-end stock flow and operating
rhythm. We have continued to put the health, safety and wellbeing of our customers and
team first in the context of this challenging and volatile operating environment.
“Sales growth in Australian Food is positive on a one-year basis and strong on a two-year
basis but moderated in Q2 following the easing of restrictions in NSW and Victoria. We are
pleased with our sales growth compared to the overall market and our customer NPS scores
have remained strong. As we head into the key Christmas trading period we have a good
in-stock position and positive trading momentum, and our team is working hard to ensure
that our customers have access to all they need to make this a special Christmas.
“However, the ongoing material costs of operating in a COVID environment has impacted
our expected earnings in H1. COVID has had a significant impact on costs, even more so
than last year due to the combination of both direct COVID-related costs, together with the
indirect impacts from disruption caused by COVID. This includes the significant disruptions
we have seen across the end-to-end supply chain, and the material inefficiency this causes
in our stores, distribution centres and transportation.
“In addition, to recognise the significant efforts of all the Group’s front line teams across
Australia and New Zealand, our H1 results will also include a special Group Team
Christmas Thank You bonus payment of $35 million to $40 million as previously disclosed.
“Despite the various disruptions, we have made good progress activating our strategy and
have continued to selectively invest in building out our customer proposition and broader
retail ecosystem. As customer behaviours begin to normalise and COVID-related supply
volatility reduces, we expect an improvement in our underlying operating performance and
Woolworths Group Limited ABN 88 000 014 675
1 Woolworths Way, Bella Vista NSW 2153
we will provide a more detailed update on the outlook for the remainder of F22 at our H1
results in late February.”
Australian Food
Following the easing of lockdowns in NSW and Victoria during October, sales in Australian
Food have moderated as customers return to more normal shopping habits. Sales have also
been impacted by inclement weather, primarily in NSW, which has reduced outdoor
entertaining occasions, as well as a material ongoing decline in tobacco sales. Total sales in
Q2 to date increased by 2.0% compared to the same period in the prior year (Q1’22: 3.9%),
1
while sales on a two-year average basis have increased by 5.2% (Q1’22: 8.7%). Total sales
in H1 to date have increased by 3.0% (two-year CAGR: 6.9%).
For H1, direct COVID costs in Australian Food are expected to be approximately
$150 million (0.6% of sales), with the costs split between supply chain (including customer
2
fulfilment centres), and stores, to ensure the safety of customers and team.
In addition, the indirect disruption to stores and distribution centres from operating in a
COVID environment has led to elevated operating costs of approximately $60 million to
$70 million in the half. This includes the deferral of a number of planned performance
improvement initiatives that have been delayed to allow teams to focus on serving
customers in the lead up to Christmas. Supply chain costs were also impacted by higher
volumes, fuel price increases and the impact of balancing supply across distribution centres
on the Eastern Seaboard.
Both direct and indirect COVID costs are expected to reduce significantly in H2, subject to
no further widespread COVID disruptions; with direct COVID costs reducing in line with
reduced COVID safety settings, and efficiency levels expected to improve over Q3 as the
business returns to a more sustainable, predictable and productive operating rhythm.
eCommerce sales have continued to grow strongly, increasing by approximately 50%
(two-year CAGR: over 60%) in the half. In H1 to date, eCommerce has comprised over
100% of Woolworths Supermarkets sales growth with eCommerce sales penetration of
11.0%. While the profitability of eCommerce continues to improve, eCommerce sales are
lower margin, which together with a decline in store-originated sales has also impacted
overall profitability in the half.
Approximately $40 million has also been invested in continuing to build eCommerce
capabilities, leveraging advanced analytics, and growing digital demand generation.
Initiatives include improvements to the Delivery Unlimited subscription proposition, standing
2 Excludes Group Team Christmas Thank You bonus which will be recorded at a Group level
1 10 weeks to Sunday 12 December
Woolworths Group Limited ABN 88 000 014 675
1 Woolworths Way, Bella Vista NSW 2153
up Q-Retail, the launch of HealthyLife and Everyday Market, and investments in digital and
data talent more broadly.
For H1 F22, Australian Food’s EBIT is currently expected to be $1,190 million to
$1,220 million (H1 F21: $1,312 million) .
3
Other businesses
BIG W’s sales momentum in Q2 has improved on Q1, as stores in NSW and Victoria
reopened to customers during October. Sales in Q2 to date have decreased by 3.3% (Q1’22:
-17.5%) but increased over two years at a CAGR of 8.2%. Despite the improvement in Q2,
given the impact of closures for much of the first four months of the half, BIG W’s EBIT for
H1 F22 is expected to be $20 million to $30 million (H1 F21: $133 million).
New Zealand Food’s sales growth has been strong in H1, benefitting from extended
lockdowns and higher inflation in the country.
All figures are subject to half-year finalisation and review.
Woolworths Group will host a conference call to discuss the trading update at 10.15 am
AEDT and will be webcast live at www.woolworthsgroup.com.au.


DYOR

 i hold WOW   ( but have sold down 90% of the inherited holding  over the last few years )


----------



## Sean K (14 December 2021)

I'm liking WOW at the moment. I have been shopping at Coles for a long time, even though it was 300m further up the road, because their fruit, veg and meat sections seem to be fresher and higher quality but recently they'd dropped off. I tried Woolies a few days ago to see if things had changed there and wow! so much better. The suppliers they now have on board are providing outstanding strawberries and rasberries. Even the oysters are good. 

Hasn't helped the sp tank 8%, so far.


----------



## KevinBB (14 December 2021)

Sean K said:


> I'm liking WOW at the moment. I have been shopping at Coles for a long time, even though it was 300m further up the road, because their fruit, veg and meat sections seem to be fresher and higher quality but recently they'd dropped off. I tried Woolies a few days ago to see if things had changed there and wow! so much better. The suppliers they now have on board are providing outstanding strawberries and rasberries. Even the oysters are good.
> 
> Hasn't helped the sp tank 8%, so far.



Hello @Sean K 

I've been shopping at WOW for a long time now, solely because of the fresh F & V. The COL store near me sells F & V that appear to have much less fridge life, so WOW has been the choice.

I bought some WOW this morning .... no reason other than the computer told me to. Don't hold COL.

KH


----------



## Sean K (14 December 2021)

KevinBB said:


> Hello @Sean K
> 
> I've been shopping at WOW for a long time now, solely because of the fresh F & V. The COL store near me sells F & V that appear to have much less fridge life, so WOW has been the choice.
> 
> ...




I've got it on my longer term buy and hold stock watch list, waiting for an opportunity... Done.


----------



## divs4ever (14 December 2021)

having worked for WOW circa 1972 ( ish ) when they were a clear second to the Cole-Myer empire  , i am unimpressed on what they have achieved  despite  the Coles-Myer stumble  and several other market changes 

 probably my first major wake-up call when when i was given a Dick Smith Electronics gift voucher   and realized the Woolworths chain was NOT  putting simple products  across all outlets  , sure 'exclusive brands ' has it's charms  , but say i had an electronics project in progress but have to go between D.S.E. and Big W. and a real hardware  when i could have just gone to Jaycar  , and be back home getting on with it but maybe a few cents poorer 

 then we get to the hardware fiasco  ( but heck  i bet MTS are still smiling )

 then 'the Woke madness ' demerging the alcohol/gambling ( profit-making ) arm  but at least  EDV was a one for one split  ( i was  half expecting a similar deal to the SCP demerger )

 but i guess time will tell 

  currently  i hold  more COL ( 10% more , all courtesy of the WES demerger )  than WOW  slightly less EDV  ( than WOW  due to the WOW DRP )  and about  two and a half times more WES than COL ( because i bought extra WES  during the dip when they offloaded COL )

 sadly  i dumped MTS in 2015  ( i don't always make the right decision )

 PS i also hold SCP ,  BWP and HPI  ( and am happy with those )


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## divs4ever (14 December 2021)

Woolworths has one of its worst half-years​








						Woolworths has one of its worst half-years
					

SYDNEY, AAP – Retail giant Woolworths has endured one of its most challenging trading periods following the emergence of the highly contagious Delta variant of COVID-19. The supermarkets operator said its stock flows and operating rhythm were rocked by the scare in the first six months of fiscal...




					thebull.com.au
				




 DYOR

 early in my investing adventure   , i tried to create a 'core holding strategy ' ( too important to fail )

 those three stocks  selected  were AMP ( exited in 2018 @ $3.25  , but did do a bigger sell down in 2015 @ $5.65  ) ORG ( exited in December @ $9.45 ) and WOW ( since REDUCED  by 90% and removed from the list )

 today the sole stock on that list is the ever-shrinking BHP ( nicely up but still shrinking hand over fist )

( sigh ) it sounded like a good strategy at the time 

 DYOR


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## sptrawler (14 December 2021)

Yes @divs4ever , I had a similar strategy I had heavy weighting to the banks, Wes and Wow, I sold Wow a while back and replaced them with AFI and will be lightening up on the banks when opportunity presents.
I will be moving the core from the above mentioned stocks, to etf's and LIC's, and stocks that are bought with a view to selling.
Times change, I have to move with them.lol


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## divs4ever (14 December 2021)

i have done very well in places i DIDN'T expect to  but it seems buy and hold with 'blue chips ' is very much a hit or miss affair 

 of the ASX top 20 stocks ( XTL ) MQG   has been the BIG winner for me  , and FMG MIGHT be a good gainer in the future along with WES ( depending on what they decide with Office-Works )

 in the event of a LARGE meltdown  , i had planned to buy VLC or ILC , but am not sure now that cherry-picking distressed stocks won't suit me better

 WPL will soon become a bigger company  , but will it become a better performer 

 the next big shake-up could leave reputations scattered all over the place 

 but yes i have found innate nervousness  and flexibility  solid allies ( so far ) in this investment adventure 

 ( but watch EDV  , it used to be the profit-generating part of the WOW empire  , maybe it still has some twinkle left )


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## sptrawler (14 December 2021)

divs4ever said:


> WPL will soon become a bigger company  , but will it become a better performer



I've never owned WPL, but I'm interested now it is looking to expand into H2, mainly because I think the push to H2 is going to far outstrip the ability to produce it cleanly especially in the initial stages.
Time is of the essence and 2050 isn't a long way off, so I'm guessing countries will be wanting to burn it, sooner than anyone has enough installed capacity to make it cleanly, which will give rise to demand for blue H2. Just a guess and we are definitely moving away from a supermarket thread topic. 🤣
As with all these comments, they are just personal thoughts and not advice, if you want reliable advice, buy a dart board.


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## frugal.rock (14 December 2021)

I notice MMM Marley Spoon also taking a dive around the same as wow.


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## stanwell (23 February 2022)

I am unable to insert the link to my twitter. You can find the twit then clicking the images to see the details of the charts.


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## divs4ever (23 February 2022)

sptrawler said:


> I've never owned WPL, but I'm interested now it is looking to expand into H2, mainly because I think the push to H2 is going to far outstrip the ability to produce it cleanly especially in the initial stages.
> Time is of the essence and 2050 isn't a long way off, so I'm guessing countries will be wanting to burn it, sooner than anyone has enough installed capacity to make it cleanly, which will give rise to demand for blue H2. Just a guess and we are definitely moving away from a supermarket thread topic. 🤣
> As with all these comments, they are just personal thoughts and not advice, if you want reliable advice, buy a dart board.



 WPL  will get a big chunk of BHP assets  so while in time ( not that long ) it will be a bigger company  , but will it be a better one 

 if i were running  WPL ( but i don't ) i  would be having detailed looks at the CVs of the BHP staff liable to be joining  the enlarged WPL   , yeah sure i expect some office staff to go  and some BHP staff might decide to retire or move on , WPL has a good chance to improve staff quality ... but will they take that opportunity 

 now back to WOW it is my opinion  ( and i haven't worked for them since 1975  )   they are a corporate vampire  , and suck the essence out of their 'partners ' .. Gage Road Breweries  comes to mind ,  but what of Marley Spoon and Ecargo ?

 now spinning out EDV  might be a winner for me  , i haven't bought extra yet ( but got some courtesy of the demerger )

 it should be interesting to watch  the COL  v WOW battle in the years to come  , but don't neglect MTS ( i do not currently hold MTS )

 i will be more focused on COL v. EDV  ( although EDV looks overly complicated to me ) i hold them both courtesy of the spin-offs


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## Dona Ferentes (23 February 2022)

The 26 per cent cut in the interim dividend to 39¢ a share largely reflects the exclusion of Endeavour’s earnings post-demerger.


Woolworths increased first half sales 8 per cent to $31.9 billion,
Earnings from its supermarkets fell 7.6 per cent thanks to COVID-19 costs and stock shortages on shelves due to supply chain disruption.
Group earnings before interest and tax fell 11 per cent to $1.38 billion.
Group net profit rose 522 per cent to $7.063 billion in the half year to January 2 after the gain on the demerger of the Endeavour Group pubs and drinks business.
Normalised net profit after tax from continuing operations fell 6.5 per cent to $795 million.
Significant items included a $6.387 million gain on the Endeavour demerger and a post-tax charge of $119 million.


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## eskys (4 March 2022)

divs4ever said:


> WPL  will get a big chunk of BHP assets  so while in time ( not that long ) it will be a bigger company  , but will it be a better one
> 
> if i were running  WPL ( but i don't ) i  would be having detailed looks at the CVs of the BHP staff liable to be joining  the enlarged WPL   , yeah sure i expect some office staff to go  and some BHP staff might decide to retire or move on , WPL has a good chance to improve staff quality ... but will they take that opportunity
> 
> ...



Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today


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## eskys (4 March 2022)

eskys said:


> Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today



Or more accurately, perceived safe haven?


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## divs4ever (4 March 2022)

eskys said:


> Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today



 that is a tradition over here , especially after the Hayne Royal Commission popped the 'reputation bubble ' of the banks 

 if the market melts down which businesses would you expect to survive ( rhetorical question )

 now we know there is the  strategy in place  for the big banks to be '  bailed in' ( so you can't automatically think the Federal Government will rush to the rescue ) the recent slew of Australian Power utility company take-overs  , hint they are no longer a 'protected  species '


 so the average long term investor ( that still shuffles around the portfolio ) will be searching for  a slightly different list of 'safe-havens this time


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## Country Lad (4 March 2022)

Dona Ferentes said:


> Earnings from its supermarkets fell 7.6 per cent thanks to COVID-19 costs and stock shortages on shelves due to supply chain disruption.




Earnings from this particular Woolies store will fall a bit more than that I suspect.


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## divs4ever (4 March 2022)

Country Lad said:


> Earnings from this particular Woolies store will fall a bit more than that I suspect.
> 
> View attachment 138559



 yes Qld has several well-chosen shopping centre  sites ( sarcasm ) ( and they have had decades to figure that out  with some of them  )

 but MAYBE that is the strategy the landlord uses to 'refresh the centres  without businesses belly-aching


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## divs4ever (26 July 2022)

Gordon Cairns to retire as Chair with Scott Perkins announced as his successor

Woolworths Group today announces that Gordon Cairns will retire as Chair
following the Group’s Annual General Meeting on 26 October 2022.
Gordon Cairns said: “It has been a privilege to be the Chair of Woolworths Group
for the last seven years. I am proud of the work that the team and directors have
achieved together in transforming Woolworths Group and delivering for our
shareholders. Moreover, I am humbled to have been the Chair of a purpose-led
business dedicated to working towards a better tomorrow for our teams,
customers and the community.”
Scott Perkins, who has been a non-executive director at Woolworths Group for
eight years, has been appointed to succeed Gordon Cairns as Chair.
Gordon Cairns added: “We are fortunate to have someone of Scott’s ability and
experience, respected by his colleagues and management, to provide the
oversight required to allow the business to reach its full potential.”

DYOR

i hold WOW ( 'free-carried ' )

and in the last 5 years i have sold down 90% of the holding

since the new chairman has been a fixture as well ( 8 years on the board ) i don't think i will be buying more unless maybe they go under $10


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## Stockbailx (24 September 2022)

WOW looking for a rebound north reaching key levels. Or will the market depression take over?  

Key levels on the chart - consider taking trades from key support/resistance levels 
Woolies falls under the Consumer Staples sector which is generally a defensive stock and therefore resistant to economic cycles including any upcoming recessions
Woolies can maintain their profit margins and pass on their costs to customers which provides protection for their bottom line.


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## Dona Ferentes (3 November 2022)

Stockbailx said:


> WOW looking for a rebound north reaching key levels. Or ............?



WOW at low point for the year, and since Oct 2020.

Has posted a 1.8% in first quarter sales, with growth dragged down by its Australian Food businesses where sales fell moderately
............ but_ average prices surged 7.3 per cent due to double-digit inflation in fresh fruit and vegetables._



> _There are 51 days until Christmas and we are very focused on delivering a much-needed inspirational and affordable festive season for our customers. Ongoing supply chain volatility and the possibility of another wet summer will be key challenges to navigate ...._


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## mullokintyre (3 November 2022)

Right, so sales went up  a bit in dollar value, but food prices went up by 7.3%.
Luckily for them the food is not the only thing they sell, otherwise one might come to the conclusion that in real terms , sales fell.
Mick


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## divs4ever (3 November 2022)

now i didn't  read that fully ( despite holding WOW for the last decade )
 but have they  solved their driver shortage yet  ??


mullokintyre said:


> Right, so sales went up a bit in dollar value, but food prices went up by 7.3%.
> Luckily for them the food is not the only thing they sell, otherwise one might come to the conclusion that in real terms , sales fell.
> Mick



 sadly WOW sell ( or more correctly try to sell ) more than  food 

 my quick glance came to the same conclusion as you ( sales in real terms looked weak )

 i also note  they had to correct  the NZ results ( that is not such a good look )

 i participate in the DRP    , and anticipate buying no more WOW  for quite a while,   especially since EDV has been spun-off   ( but i MIGHT actually tip some cash into EDV to go with the freebies , sometime in the future )


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## rcw1 (14 December 2022)

Good morning

Hmmmmm

Woolworths sold 98.5m or 5.5 per cent of Endeavour shares last night (13/12/22) in a block trade via UBS at $6.46 a share, representing a narrow 3.6 per cent discount to Endeavour's last traded price of $6.70.

Woolworths still holds a 9.1 per cent stake and has no current intention to undertake a further selldown in the short to medium term. The proceeds will be used for strategic investments and general corporate purposes, Woolworths says.

Not holding.

Have a safe and happy Christmas and prosperous new year.

Kind regards 
rcw1


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## sptrawler (15 December 2022)

WOW sells down liquor and  buys into a petshop, not my cup of tea when we are heading into a downturn, but I don't hold anymore so only a mild interest.

Woolies enters booming pet sector with $586m buy​Woolworths boss Brad Banducci sees a huge opportunity in the pets space and has spent half-a-billion dollars to snap up a stake in Petspiration – owner of PETstock.


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## divs4ever (15 December 2022)

i hold WOW ( 'free-carried' ) and EDV ( courtesy of the demerger )

maybe RGN ( formerly SCP ) is the play here you would imagine they would get a chance at malls/centres where Pet Stock is a current , or future tenant

i also hold RGN ( at some cash risk )


sptrawler said:


> WOW sells down liquor and buys into a petshop, not my cup of tea when we are heading into a downturn, but I don't hold anymore so only a mild interest.



i still hold , but yes i agree  , WOW doesn't have a great reputation with recent  ( including Dick Smith Electronics ) growth moves 

 i used to have thousands of WOW between the inheritance , participation in the DRP and some extra buying   but now hold less than 200 ( still DRPed )

 i don't see the logic   UNLESS there is increase ( horse and dog ) racing activity  , more pet ownership as a substitute for children OR properties with acreage , becoming farmlets/homesteads


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## Sharkman (15 December 2022)

yep i'm of the same view as well, what happened to all that tripe about "simplifying our corporate structures and refocusing on our core groceries business" or some similar corpo-babble that was spouted at the time of the Endeavour demerger? conveniently discarded when it suits them to make room for their next pet project - pun fully intended.

admittedly the stock has been good to me over the years, i bought some about 2 decades ago when i first started working, but ever since the Masters fiasco they've been quite underwhelming. it was a core holding for much of my 20s, but it's just a satellite position now, it's done so poorly vs everything other than the non-CBA big banks since then.

and i've basically been forced to hold on thru all of their recent fumblings, since i bought it so long ago it sits in my individual holdings rather than my company trust, and i elected to not declare a deemed disposal when i moved overseas to avoid a sizable CGT hit. selling them now would mean copping punishing non-resident tax rates on the cap gains, so i don't really have any alternative but to keep holding on and pray that their latest experiment works out better than the Masters one did. which should be a pretty low bar to clear, but one just never knows.


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## divs4ever (15 December 2022)

the doubts crept in for me when i was given a Dick Smiths Electronics  gift card  , and actually spent a half an hour deciding how to spend the card ( unlike Jaycar's where i could probably fill a ute in the same time , spending extra cash in the process ) anyway the time looking and thinking  raised plenty of questions on how the store was run ( strategy  , and customers , not the semi-bored staff ) then there was the  poker machine activist saga , when a limit on the machines  was the obvious  answer ( unless addicted to money-laundering revenue )  by the time of Masters and the hardware saga ... i knew it was time to take it off my top up list   ( and boot it from  my 'core-holding portfolio ' )  the sell-down came later  , but sadly before the EDV spin-off  , oh well 

good luck share-holders , we must be just about due for a change of fortune


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## wayneL (16 December 2022)

sptrawler said:


> WOW sells down liquor and  buys into a petshop, not my cup of tea when we are heading into a downturn, but I don't hold anymore so only a mild interest.
> 
> Woolies enters booming pet sector with $586m buy​Woolworths boss Brad Banducci sees a huge opportunity in the pets space and has spent half-a-billion dollars to snap up a stake in Petspiration – owner of PETstock.



I'm quite well acquainted with this business and personally know the previous owners of one of their acquisitions.

It's a great business and I don't think even Woolworths could screw it up, especially if they retain current management.


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## divs4ever (16 December 2022)

well according  to the ann. the management stays  including keeping their shareholding in the business , and WOW assuming the outstanding debt and lease obligations . 

 i guess time will tell


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