CML - Coles Myer

CML has had a good run for a year and a half or so. However, I'm skeptical about it's ability to sustain it's current share price growth.

Why?

Well I'm not a genius at fundamental analysis or technical analysis but I feel that the grocery market in this country is becoming more competitive. I've just had a bunch of these Aldi supermarkets open up near me and they are definitely cheaper than either Coles Myer or Woolies.

Surely in this type of competitive market, CML must either cut costs or allow their bottom line to suffer, indicating a retracement is eventually on the cards.

Anyone else have an opinion on this one? Is it forming a double top?

Re: CML: Due for a fall?

I dont know where the shareprice is going to go but from an insiders point of view CML is goin from strenght to strenght. I looked at CML when its price was around 4.80 and thought if only I had the capital. This was when Fletcher had only been at the helm for under a year. Now we are just starting to see the effects of the practices he has put in place. Cutting cost? Retrenchments? For one you talk as if CML is only supermarkets (which it isnt). In the last year and a half 2 major chains in CML have been axed becuase of there inablity to make a profit, 30+ headoffices have been closed and intergrated into other existing State/National offices (taking advantage of modern technology). (many jobs where axed). Not a month has gone by where they havent told us of a new rollout to increase profits and cut costs. Personlly I agree that it is duanting looking at a share that has doubled its price in just over 12mnths and would be sceptical to buy but I think that there is still plenty of growth in the stock. CMl is only 2.5 yrs into its 5 Yr target of becoming Australias No1 retailer.

Just my two bobs worth.

Re: CML: Due for a fall?

I'd say if there will be a pull back it is short lived as the $3000 baby bonus hits in November. That should make retailers very happy as we've just seen with the $600. If 600 bucks can make that much of an impact then I'm wondering what $3000 will do. Then there's the christmas shopping (probably arm in arm with the baby bonus) and that should be excellent news too. So for the next 4 months I can't see many problems for CML.

They have come a long way, but it would appear that there is a reason for it.

Happy trading

Stefan

Re: CML: Due for a fall?

Hi StockGuru,

on the T/A, there is a doji cross showing, this could be sign of a reverse, in a small push in an uptrend, though looking at the chart, a symmentrical triangle has been formed, based on the candlestick chart... it does look like its running out of puff, could see a nice rally, though, on the current chart the T/A is showing this might not be sustainable, if there is a reversal, you should see a nice confirmation, of a bullish or gaping pattern, or even a morning star appearing...


though based on fundamentals, not too sure... more of a tech... (is there any new releasing or company annoucments soon? )

Cheers,
sis

Re: CML: Due for a fall?

CML: I must agree with Stefan here. I dont see CML to change its trend for at least next few months. I think the new top management really made the difference there and I also know how efficiently they are managing on the lowest (store) levels. Its definatelly HOLD stock in my portfolio.

Sis: Mate I love the way you colorfully describe each of your little charts. If only I had your imagination when looking on those boring lines in the chart. Good stuff mate keep it up I really do enjoy reading it.

Re: CML: Due for a fall?

I dont see CML to change its trend for at least next few months.

Click to expand...

Here's the current chart. By my reckoning, it has broken down from the symmetric triangle indicating at least a minor reversal. I think a down-side target here would be about $8.55.

Cheers,
GP

Re: CML: Due for a fall?

Hi Guys,

pretty much agree with GreatPig, on the T/A the chart is showing a red inverted hammer, previously with a long bearish shaven candle with small wicks, on the intraday charts, there is a strong bull rally, but the bearishness, is being confirmed by the long shadow wicks being displayed,

IMHO, do believe the share will go down further, just having a quick look at the e*trade interactive charts, CML, is trading below the MACD, and below the oversold (in the bollinger bands), a strong bull rally will be displayed, though there is more confirmation of a downtrend due to, a red inverted hammer and low volume of trades going through...

Cheers,
sis

Re: CML: Due for a fall?

CML: I must agree with Stefan here.

Click to expand...

I hope it wasn't too hard ;D

Happy trading

Stefan

Re: CML: Due for a fall?

Stefan: Nah

sis&GreatPig: Oh I see where u coming from. Yes you may as well be right in your short term CML trend analysis, but on the medium/long term (now how does each of us define that? for me it would mean buy mid August and hold for ca 5-6mths) I say that nice steady upclimb will prevail.

Personally I regard CML as a defensive stock and do not have any money in it.

Re: CML: Due for a fall?

Well, it's down from $9+ and based on what I read, I'd say it may be an attractive buy this week. Their figures are great and the outlook sounds promising:
Outlook
Earnings guidance for FY2004 Group Net Profit after Tax has been upgraded from $530 – $540 million
to approximately $565 million. This is subject to the completion of the final year end audit and does not
include the $24 million (after tax) one-off interest benefit from the Employee Share Plan Trust
restructure.
The FY2005 sales outlook for the group remains positive. The Food and Liquor business is expected to
deliver solid comparable sales growth, albeit at a more moderate rate than the fourth quarter rate. In
non-food, we expect mid single digit sales growth in line with strategy. Although early into the first
quarter, sales trends are well within our expectations following the removal of the shareholder discount
program.
The FY2004 profit result will be announced on 22 September, 2004.

Will be watching closely. Don't know if it dips as low as 8.5 GreatPig. From my point of view it should start rising soon. So let's see...

Maybe I missed something as I didn't follow it recently. Just checked price history and news to come up with this.

Happy trading

Stefan

Coles Myer (CML)

CML is up 23c today on heavy volumes but I can't see any announcements or anything in the news. It hasn't been moving much lately so I am wondering if anyone knows anything. I am holding and would like to get out as it is pretty much at its high. My broker also has a 12 month price target of $9.53 which is 20c lower than what it is today. Has anyone heard anything?

Re: Coles Myer (CML)

sam21poddy said:

CML is up 23c today on heavy volumes but I can't see any announcements or anything in the news. It hasn't been moving much lately so I am wondering if anyone knows anything. I am holding and would like to get out as it is pretty much at its high. My broker also has a 12 month price target of $9.53 which is 20c lower than what it is today. Has anyone heard anything?

Click to expand...

Rising volumes and RSI looks like it should move a few cents higher in the very short term. Stochastic trend appears to support this.

Cheers,

AJ

Re: Coles Myer (CML)

Looks to have broken out of a triangle. Target could be around $11.

GP

Re: Coles Myer (CML)

A jump today into blue sky territory.

Cheers,
GP

[I don't hold]

Re: Coles Myer (CML)

Here is an article "Coles shares rocket on interest in Myer" on The Sydney Morning Herald 1 Sept 2005

http://www.smh.com.au/news/business/coles-shares-rocket-on-interest-in-myer/2005/09/01/1125302677369.html

Re: Coles Myer (CML)

I think this is a case of insiders knowing something before it became public knowledge. I had a gut feeling that that was what was happening.

http://www.forbes.com/home/feeds/afx/2006/08/17/afx2955652.html

Australia's Coles Myer says may be takeover target - UPDATE
08.17.2006, 06:24 AM


SYDNEY (XFN-ASIA) - Retailer Coles Myer Ltd said in a statement that it has received an approach from parties wishing to discuss the possibility of a takeover of the company, but it declined to name the parties, saying only that it would consider any 'bona fide' proposals put to it.

There has been speculation that US retailer Wal-Mart Stores Inc was considering an offer to buy Coles, after it sold its Myer department stores in June to concentrate on its super market and discount store businesses.

But CommSec retail analyst, Goerge Saligari said it would be premature to assume Wal-Mart was the potential buyer, as there were many other possible candidates including international retailers as well as private equity investors.

He mentioned US. buyout firm Kohlberg Kravis Roberts & Co and Newbridge Capital, the Asia-focused arm of U.S.-based Texas Pacific as other parties that may be interested.

Last July 31 Coles Myer chief executive John Fletcher said he had read reports of Wal-Mart's apparent interest but Coles Myer has had 'no knowledge of any interest that they have had in either us or Woolies (rival Woolworths Ltd) up until now.'

The volume of trades in Coles shares has risen sharply in recent days as speculation of an offer circulated in the market. On Thursday the stock rose rose 1.40 aud or 11.97 pct to finish at 13.10 aud, a record close. A total of 31.9 mln out of of 1.89 bln shares on issue were traded.

Saligari said in the last week daily trading volumes have picked up to around five mln shares from a average of one mln shares before the takeover speculation emerged.

In its statment today the company added that it is committed to implementing the new strategic direction of re-branding as Coles Group Ltd. It will reorganize its operations into three business groups following the sale of its Myer department stores to private equity consortium TPG-Newbridge Capital and the Myer family for 1.4 bln aud.

The new business groups will market food, liquor, fuel and general merchandise under one Coles brand, the Target discount stores business, and home office supplier Office Works.

Earlier today, the retailer also reported that it expects to meet its year to July net profit guidance of 785 mln aud after a 7.5 pct year-on-year rise in fourth quarter sales to 8.62 bln aud. It said annual sales to July increased 5.7 pct to 34.41 bln aud, which excludes sales from the Myer department stores.

Re: Coles Myer (CML)

sam21poddy said:

I think this is a case of insiders knowing something before it became public knowledge. I had a gut feeling that that was what was happening.

Click to expand...

looks liek it happedn again

thx

MS

There's probably still a trading opp in this if you can get on early. Looks like there's more than one potential buyer, and the odds are the initial offer will have to be bumped up.

I'm not usually into short term trading but have just placed a buy order on CML. Until the take-over is stitched up the SP should have more to run.
Anyone else?

Julia