WES - Wesfarmers Limited

[greenfs]

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

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

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

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

A copy of the graph is provided for information purposes.

 

[doctorj]

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

 

[michael_selway]

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

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

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

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

A copy of the graph is provided for information purposes.

View attachment 14920

35% is still not much % wise!

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

thx

MS

 

[noirua]

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

 

[Garpal Gumnut]

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

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

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

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

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

Any info would be appreciated.

gg

 

[clowboy]

What store?

Somewhere in townsville?

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

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

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

Like I said alot of people hoping for a brighter future

 

[Garpal Gumnut]

What store?

Somewhere in townsville?

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

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

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

Like I said alot of people hoping for a brighter future

Yes mate,

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

gg

 

[clowboy]

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

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

things will change, the question is, how quickly?

 

[Garpal Gumnut]

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

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

things will change, the question is, how quickly?

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

Roll on WES thats what I say.

gg

 

[2020hindsight]

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

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

 

[Smurf1976]

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

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

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

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

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

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

 

[robots]

hello,

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

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

thankyou

robots

 

[dalek]

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

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

 

[greenfs]

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

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

 

[noirua]

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

 

[robots]

hello,

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

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

thankyou

robots

 

[reece55]

WES - Wesfarmers

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

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

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

Cheers

 

[reece55]

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

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

Cheers

 

[Kauri]

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

 

[sassa]

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

As reported in Money Morning-

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

But that doesn’t matter, does it?

No. In a credit contraction, assets are assets and debt is debt. Further distinctions are a bit blurry. In the end, creditors don’t care what type of assets you have. They care about the quality of your assets. The just want their money back. If you can’t refinance your debt, it won’t matter if you have all the tea in China on the top end of your balance sheet. There is, in fact, no caffeinated beverage on the planet that can save a company from the debt collector. He doesn’t drink much…just squeezes blood from stones.

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

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