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WOW - Woolworths Group

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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.
 
sptrawler said:
It's about time Australian companies, forgot about economies of scale and started supporting small producers.
Click to expand...

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.
Click to expand...

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.
 
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.
Click to expand...
 
sptrawler said:
As I said SPC, as far as I know, is majority O/S owned and probably supplies numerous companies and Countries.
Click to expand...
Hmm, isn't SPC Ardmona still owned by Coca Cola Amatil (listed ASX: CCL)?
 
Ves said:
Hmm, isn't SPC Ardmona still owned by Coca Cola Amatil (listed ASX: CCL)?
Click to expand...

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.
 
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.
Click to expand...
They own 29.21% according to the latest Annual Report.
 
Ves said:
They own 29.21% according to the latest Annual Report.
Click to expand...
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
 
From a personal point of view, I think Woolies have lifted their game, it will be interesting to see the results post Masters exit.
 
They had a good Christmas as reported. Curious as to whether they'll lift the Divvy in a month.
Maybe back to 44c?
 
Well with the impost of Masters gone, it should reduce the drag somewhat, also management focus would have been distracted somewhat.lol
 
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
 
Sounds like you resistance is your buy signal. Who cares why. The markets taking it up.
 
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
 
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
 
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.
 
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
 
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?
 
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.
 


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].

----------------------------
 


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.

 
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