WOW - Woolworths Group

[System]

Woolworths pulls plug on Masters: http://www.smh.com.au/business/reta...wes-exercises-put-option-20160117-gm7ygg.html

 

[nulla nulla]

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]

The board should pitch the Masters business to Anchorage Capital Partners, apparently they are brilliant achieving miraculous U turns in failing businesses.

 

[Macquack]

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]

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]

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]

Re: 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

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]

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]

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


View attachment 66291

Out of interest does your software make the wave counts? Or do you add them?

 

[Triathlete]

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]

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]

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]

Re: WOW Shares Theory!

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]

Re: WOW Shares Theory!

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]

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]

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.

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]

Re: WOW Shares Theory!

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]

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]

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".

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]

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