WES - Wesfarmers Limited

[Dona Ferentes]

Anko is a success ..and has turned Kmart around. The brand now accounted for 85 per cent of sales at the department store – more than $4 billion in six months.

Kmart has become a key part of Wesfarmers’ growth, and now represents more than 20 per cent of the conglomerate’s overall valuation.

There’s an $8b business quietly growing inside Wesfarmers

In 2008, Kmart was on its knees. But a trip to the United Kingdom turned into the company’s greatest success – Anko, the home brand with big growth plans.

www.afr.com

 

[Garpal Gumnut]

Kmart as @Dona Ferentes noted and its Anko brand is vital to WES (and my wardrobe). Why order from Gieves and Hawkes when a trip to the local shopping centre offers value and comfort.

The stock recovered from a fall to approx $66 and is now just above $70 heading in to the season of danger and tears.

I'm looking for an opportunity to re-enter.

One of my picks in the 2024 Competition @debtfree

gg

 

[farmerge]

WES my No 1 pick in the ASX. Nothing seems to stop this company going from strength to strength.
Good increase in its SP since the start of the year

 

[Dona Ferentes]

where to spend the money: quandary #76.
.
..Wesfarmers and ... Macquarie Group are the latest names to emerge as a keen competitors for the $3bn diagnostic imaging business I-MED that is about to hit the market.

It comes after Wesfarmers is understood to have carried out detailed analysis of the country’s largest diagnostic imaging provider I-MED as it keeps a keen focus on the healthcare industry for acquisitions.

WES recently appointed Kate Munnings as a director, the former boss of IVF provider Virtus Health and chief operating officer of Ramsay Healthcare...
.
from The Australian

 

[mullokintyre]

where to spend the money: quandary #76.
.
..Wesfarmers and ... Macquarie Group are the latest names to emerge as a keen competitors for the $3bn diagnostic imaging business I-MED that is about to hit the market.

It comes after Wesfarmers is understood to have carried out detailed analysis of the country’s largest diagnostic imaging provider I-MED as it keeps a keen focus on the healthcare industry for acquisitions.

WES recently appointed Kate Munnings as a director, the former boss of IVF provider Virtus Health and chief operating officer of Ramsay Healthcare...
.
from The Australian

I can just see it now, free cat scan with every $300 purchased.
Should work well.
Mick

 

[divs4ever]

I can just see it now, free cat scan with every $300 purchased.
Should work well.
Mick

i have seen plenty of worse ethics elsewhere

and if it helps customers discover they need early treatment , why not ( keep your customers healthy and shopping )

 

[farmerge]

I can just see it now, free cat scan with every $300 purchased.
Should work well.
Mick

A good boost to Bunnings bottom line

 

[Dona Ferentes]

I can just see it now, free cat scan with every $300 purchased
Mick

there are plenty of ways to scan a kit.

 

[farmerge]

there are plenty of ways to scan a kit.

Missed the play on words the first time around.

 

[Gretsch]

Meow

 

[Dona Ferentes]

a AT high recently of $76.05, and closed at $74.63 on Friday

Wesfarmers will report its full-year results on 29 August, with its hardware juggernaut Bunnings to once again deliver the bulk of sales and earnings.

The market is looking for Wesfarmers to post annual revenue of around $43.85bn and earnings of $3.75bn.

Bunnings is tipped to contribute $18.86bn of those group sales and $2.246bn of the conglomerate’s earnings.

UBS analyst Shaun Cousins forecasts Bunnings sales to benefit from its push into more categories, and countering the impact of sluggish new housing, with the hardware retailer to report market share gains in existing categories and entry into new ones such as pets and personal cleaning.

 

[farmerge]

WES Wesfarmers Ltd. My No 1 pick for the comp.
What can be said about this company that is going from strength to strength.
The SP seems to have no barrier as it continues its upward climb.

 

[Dona Ferentes]

WES Wesfarmers Ltd. My No 1 pick for the comp.
What can be said about this company that is going from strength to strength.
The SP seems to have no barrier as it continues its upward climb.

so, along comes another agenda-laden inquiry . from AFR

Bunnings faces grilling as Nats turn on ‘big-box’ retailers​

Price-setting practices, land acquisitions and supplier relationships of major retail brands set to be scrutinised in a new Nationals-led Senate inquiry

 

[Dona Ferentes]

• Wesfarmers full year sales gained 1.5 per cent to $44.2 billion, ahead of market expectations for 0.7 per cent gain​

• earnings before interest and tax rose 3.3 per cent to $4 billion. ​

• Net profit was 3.7 per cent higher to $2.6 billion, inline with expectations.​

Wesfarmers’ discount retailer Kmart Group posted strong gains in both sales and earnings during 2023-24 as shoppers looks for deals amid a tough market, buoyed by its Anko products, and helping to offset falls in other businesses. Sales at Kmart rose 4.4 per cent to $11.1 billion in the year to 30 June while earnings jumped strongly by 25 per cent $958 million. Rob Scott called the performance of Kmart a “standout”. Stablemate Target also gained from Anko product being sold and its systems process being integrated more with Kmart.

At Bunnings, sales gained 2.3 per cent over the year to $19 billion, while earnings were up marginally by 0.9 per cent to $2.3 billion. Mr Scott said Bunnings sales growth was recorded in both consumer and commercial customer segments with the second half supported by demand for ongoing repairs and maintenance, growth in online channels and range like cleaning products and pets which was partly offset by a market-wide softening in building activity.

Officeworks sales were 2.3 per cent higher while new growth division in health, which holds the Priceline chain, grew 5.9 per cent.

Wesfarmers’ chemicals, energy and fertiliser business, WesCEF, sales tumbled 17 per cent while earnings crashed 34.2 per cent impacted by lower global commodity prices. WesCEF’s lithium business contributed a loss of $26 million for the 2024 financial year.

The group declared a final dividend of $1.07 ff, which will be paid 09 October. For the full year, dividends were $1.98 per share, up from $1.91 a year ago,

 

[mullokintyre]

so, along comes another agenda-laden inquiry . from AFR

Bunnings faces grilling as Nats turn on ‘big-box’ retailers​

Price-setting practices, land acquisitions and supplier relationships of major retail brands set to be scrutinised in a new Nationals-led Senate inquiry

As usual, politicians never actually look at real data to back up their populist claptrap ideas.
The chart below from retail.org does not show a lot of gouging.
The biggest joke is that one of the biggest groups. food and liquor, have the lowest gross margins.
If I were COL or WOW or MTS I would be pointing out that the gross profit for their business is less than half the 10% the government takes for doing sfa.
Mick

 

[Value Hunter]

• Wesfarmers full year sales gained 1.5 per cent to $44.2 billion, ahead of market expectations for 0.7 per cent gain​

• earnings before interest and tax rose 3.3 per cent to $4 billion. ​

• Net profit was 3.7 per cent higher to $2.6 billion, inline with expectations.​

Wesfarmers had Earnings Per Share (EPS) of 225.7 cents for FY2024 compared to 217.8 cents for FY2023. So that is a 3.6% increase in the past year roughly an increase in line with CPI. Meanwhile the stock is currently trading at $77.20 thats a p.e. ratio of 34 for a company that only grew its EPS by 3.6%. And there doesn't appear to be any rapid EPS growth projected for the next year or two either. Does anybody else think the valuation is crazy?

Honestly I think intrinsic value per share of Wesfarmers probably lies in the $35 - $45 per share range.

The current share price is insane and like many mega cap stocks in Australia the share price and valuation is driven by passive ETF buying and large super funds passively index investing. CBA (Commonwealth Bank of Australia) is trading on a higher p.e. ratio than Alphabet (Google) in the U.S.A. which is insane.

I mean which individual investors or fund managers are actively buying Wesfarmers at todays price?

 

[Dona Ferentes]

Does anybody else think the valuation is crazy?

yep.

Honestly I think intrinsic value per share of Wesfarmers probably lies in the $35 - $45 per share range.

I'd give it $50, but the growth isn't there to sustain anything more (based on sensible metrics)

 

[divs4ever]

Wesfarmers had Earnings Per Share (EPS) of 225.7 cents for FY2024 compared to 217.8 cents for FY2023. So that is a 3.6% increase in the past year roughly an increase in line with CPI. Meanwhile the stock is currently trading at $77.20 thats a p.e. ratio of 34 for a company that only grew its EPS by 3.6%. And there doesn't appear to be any rapid EPS growth projected for the next year or two either. Does anybody else think the valuation is crazy?

Honestly I think intrinsic value per share of Wesfarmers probably lies in the $35 - $45 per share range.

The current share price is insane and like many mega cap stocks in Australia the share price and valuation is driven by passive ETF buying and large super funds passively index investing. CBA (Commonwealth Bank of Australia) is trading on a higher p.e. ratio than Alphabet (Google) in the U.S.A. which is insane.

I mean which individual investors or fund managers are actively buying Wesfarmers at todays price?

well i am not increasing the holding , except via the DRP ( where i participate )

over-valued , in my opinion,YES

so new buyers might be looking for 'growth ' that might come from the lithium exposure via the former Kidman Resources or via the health company acquisitions ( the former API and other small buys )

now i didn't spot the figure today , but WES still should have some cash left in the war-chest , and i didn't see ( yet ) a decision on the Office-Works question ( i am hoping for a REIT spin-off ala BWP )

remember the larger cap. stocks draw in cash from index funds automatically , and that can create a crazy cycle , super highs and breath-taking dips ( and index funds get some automatic cash injections from pension/super funds adding more momentum to the cycle )

my last buy of WES was @ $31.17 ( + brokerage ) AFTER the COL demerger in 2018 , and that is still roughly where i see good value for that stock

 

[Gretsch]

Way over priced in my opinion, I won’t be buying for now.

 

[farmerge]

well i am not increasing the holding , except via the DRP ( where i participate )

over-valued , in my opinion,YES

so new buyers might be looking for 'growth ' that might come from the lithium exposure via the former Kidman Resources or via the health company acquisitions ( the former API and other small buys )

now i didn't spot the figure today , but WES still should have some cash left in the war-chest , and i didn't see ( yet ) a decision on the Office-Works question ( i am hoping for a REIT spin-off ala BWP )

remember the larger cap. stocks draw in cash from index funds automatically , and that can create a crazy cycle , super highs and breath-taking dips ( and index funds get some automatic cash injections from pension/super funds adding more momentum to the cycle )

my last buy of WES was @ $31.17 ( + brokerage ) AFTER the COL demerger in 2018 , and that is still roughly where i see good value for that stock

WES may well be overpriced in the view of some, but while the punters love this Magnificent WA once owned company the SP will keep tracking up.
My grandfather was an original stakeholder of WAS way back in the very early days when it was a co-op. so the SP of these shares is a pittance compared to the SP of today..