WOW - Woolworths Group

[noirua]

I bought some shares in Woolworths at $28 today as the yield and buyback seem like pluses even though the PE is a bit demanding should growth falter at anytime.

 

[nulla nulla]

WOW sems to be having trouble holding the recent rise to the $28.00 level. It still has a while to go before going exdiv and should be good for a few more cents before then as more people buy in for the dividend.

 

[noirua]

WOW sems to be having trouble holding the recent rise to the $28.00 level. It still has a while to go before going exdiv and should be good for a few more cents before then as more people buy in for the dividend.

Look to be firmly over the $28 level now and that despite going xd the 53c divi. Buy back has a longway to run yet and target $30 looks set to be beaten very shortly.

 

[noirua]

Look to be firmly over the $28 level now and that despite going xd the 53c divi. Buy back has a longway to run yet and target $30 looks set to be beaten very shortly.

A little help from our friends at 'The Bull' and this $30 target looks fine: http://www.thebull.com.au/articles_detail.php?id=10573

 

[noirua]

WOW fell back a little on Friday and it appears there has been a rest in the buyback as no shares have been bought for cancellation since 1st April. Probably because the price was pushing close to $29.

 

[Tukker]

No good signals at this point. But bets are for a retraction of some sort, maybe a quick run at 29 again on Monday then a pull back to 27 by the end of March, revisiting support of December. If i had anything to spend it would be on a short trade of some sort.

 

[nulla nulla]

Fell back further over the last few days. That short would be well in the money. Is there any particular reason for the fall back, increase in costs or write downs? Or is it linked to softer retails sales, drop in housing loans etc?

 

[noirua]

Fell back further over the last few days. That short would be well in the money. Is there any particular reason for the fall back, increase in costs or write downs? Or is it linked to softer retails sales, drop in housing loans etc?

Fall is mainly due to a delay in the companies trading report that has been put back until the 30th April.

 

[babka]

WOW target share price was downgraded to the lower price than the current one and "underperform" rating slapped.

 

[oldblue]

WOW target share price was downgraded to the lower price than the current one and "underperform" rating slapped.

Hi, babka.

Whose report/recommendation was that and when was it dated?

Can you provide a link to it?

 

[Julia]

There has recently been a lot of very positive comment about how we're in another mighty resources boom.

This usually prompts a switch from defensive stocks like WOW into the miners.

 

[nulla nulla]

Nice bounce off the interday low to finish in the green. Wonder if it will retrace today after the announcement of earmarking $4 billion to develop the hardware store chain?

 

[noirua]

At present levels and the continued buy-back and dividend helped by reinvestment: Woolworth are a stock I've been as keen about as the company is. As cheap as chips! Not quite, but solid enough with the European problems far away.

 

[The_Snowman]

Certainly anything can happen, but wait for some type of confirmation first.

Other "W" stocks showing similar price patterns are -
WPL
WDC
WES
WOR

 

[oldblue]

I agree with that.

I like WOW too but I'd first like to see some signs that those Jan/Feb lows aren't going to be re-visited.

 

[Old Mate]

Just bought another $7000 worth. Based on fundamental analysis, I don't think you can go too wrong with wow.

 

[noirua]

Just bought another $7000 worth. Based on fundamental analysis, I don't think you can go too wrong with wow.

Yes; it looks as if WOW supported by the buy-back are likely to improve and the dividend looks certain to increase further and into the future.
A safety stock with good returns and I've added quite a few more in my buy-with-open-arms policy of late.
Many other sectors look very high risk and some under a dark 'Henry cloud'.

 

[The_Snowman]

Looks to me like it is going down with general market sentiment at the present time. Missed a great 50-50 Strategy trade entry there at $27

 

[jonojpsg]

I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in. Expecting a steady rise back to the middle of the range around 27 over the next month or two.

Tis a reasonable risk-reward with the 20:1 leverage that CFDs give. For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year $25.19 (which is where I put my stop). RR ratio of 2:1.

Personally can't see it getting past that given the defensive nature of the company - if the market tanks, people will shift back to it, if it heads up, WOW gets dragged with it. Can't lose hey

PS looking forward to getting spanked for that last comment

 

[skc]

I'm in at 25.80 (2000 CFDs) - seems like an opportune moment to buy with SP at the low end of the trading range that has persisted for the last two years since the GFC kicked in. Expecting a steady rise back to the middle of the range around 27 over the next month or two.

Tis a reasonable risk-reward with the 20:1 leverage that CFDs give. For a deposit of around $1200 I get exposure to maybe $2400 of reward (assuming a bounce back to $27) with a risk of maybe $1200 with a drop to the LOW of last year $25.19 (which is where I put my stop). RR ratio of 2:1.

Personally can't see it getting past that given the defensive nature of the company - if the market tanks, people will shift back to it, if it heads up, WOW gets dragged with it. Can't lose hey

PS looking forward to getting spanked for that last comment

That is not how you should use CFDs!! You've just put on a naked $50K position - how big is this position relative to your account? (Ignore what I just said if your account is over a million).

Last year during the GFC they are well supported by government stimulus and not threatened by a weak Coles. There weren't even Masterchef on TV. The fundamentals are somewhat different (poorer) for WOW now imo.

-Deflating food price as a result of price competition from Coles.
-Renewed competition from Coles (their new format stores are nice...) and also Metcash (IGAs).
- Dicksmiths / Big W etc not really getting anywhere.
- Huge capital requirement on rollout of hardware stores to take on Bunnings.

Good luck.