Avoid buying WOW & WES

[Intrinsic_Value]

Australian supermarkets have tended to lag their british counterparts by several years.

The trends that happen in the UK follow on several years later into the Australian market.

UK british food retailers (the big 4) are suffering real profit declines at the moment, mainly because of the budgets 'aldi etc'.

You need to do your own research here, Im lazy to go through all the points.

But the conditions are now right.

I highly anticipate a number of years of underperformance by the once market darlings WOW and WES.

BUYER BEWARE

 

[onetwothreefour]

I am not a wow fan. I shop at wow sometimes and find their staff arrogant, their stuff overprice and average quality. So fundamentally I don't see wow will make a good investment/trade. In Adelaide, Foodland is a better alternative to shop. I wish they have foodland in Sydney.

 

[Jamie_]

I don't see why you would assume the company as a whole will be under performing when both of these companies have become so diverse? Just looking at the WES revenue results from this year and the supermarket side of the business which you seem to be worried about are now less than 40% of the revenue... and Coles also had nearly 10% growth

Note: I don't own shares in either company, so there is no bias

 

[Angel]

What about Bunnings and Dan Murphys?

 

[pinkboy]

I think this 'advice' is quite specific and should not be relied on. I know you note 'BUYER BEWARE', but I think you should rethink this thread. Even the slightest things can turn ugly.

There is no real 'point' anyway.


pinkboy

 

[The Falcon]

Yeah read the Montgomery thesis on this, and the press bandwagonering last couple of months. I'm not convinced...WOW is oversold IMHO.

 

[china]

I hold a lot of WOW, bought in at higher prices than currently on the market. Maybe I need to offload soon?

 

[jingo]

Intelligent Investor did a series of articles on WOW recently. Around October or so they had it as a buy at no higher than $36. They've since revised that to buy at $27 (going from memory)

Their articles were extremely comprehensive, touched on some of the issues Instrinsic_Value mentioned, but went into much greater detail etc.

 

[china]

Intelligent Investor did a series of articles on WOW recently. Around October or so they had it as a buy at no higher than $36. They've since revised that to buy at $27 (going from memory)

Their articles were extremely comprehensive, touched on some of the issues Instrinsic_Value mentioned, but went into much greater detail etc.

So does that mean Intelligent Investor would suggest that we add to our WOW holdings? I bought the first lot of WOW under 36, consistent with their initial advice.

 

[The Falcon]

I'd be giving the Intelligent Investor a very wide berth, a 25% re-rating on a large cap non cyclical/defensive in 2 months? Can't be happy as a subscriber paying for that kind of "research".

 

[oracle]

I'd be giving the Intelligent Investor a very wide berth, a 25% re-rating on a large cap non cyclical/defensive in 2 months? Can't be happy as a subscriber paying for that kind of "research".

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.

Warren Buffett

Cheers
Oracle

 

[jingo]

I'd be giving the Intelligent Investor a very wide berth, a 25% re-rating on a large cap non cyclical/defensive in 2 months? Can't be happy as a subscriber paying for that kind of "research".

Yep, it was an eye opener, I must say! I've only been a subscriber for a few months now, but tend to notice that when they review their buy in prices, they don't leave a record of the previously recommended price which is higher than their latest review. mmmm

Index Funds anyone???

 

[xactly]

40% australian indexes
40% US index
15% emerging markets ETF
5% stock punts.


No fuss
no foresight required
meeting the market is outperformance of the active investor market.

 

[topcropper]

I'd be giving the Intelligent Investor a very wide berth, a 25% re-rating on a large cap non cyclical/defensive in 2 months? Can't be happy as a subscriber paying for that kind of "research".

I subscribed to them for a brief period 10 years ago. I wasn't real impressed back then, as especially since they shrugged off the commodity boom and basically called it over just as it was beginning. At least they did admit that they didn't understand mining stocks? I ignored the advice anyway and did well from the boom.


See ya's.

 

[The Falcon]

I find research only useful for looking at fundamentals, in which case you can get the same info from annual reports if you are prepared to put in the time, and are clear on what you are looking for, most aren't. Something like Morningstars moat list is not a bad starting point if you like the moat theory (which I do), it provides a filter for further research.

As for analysts buy/sell recommendations around short term price movements, they have no idea. Just watch how quickly they re-rate stocks AFTER the price has moved....hardly useful for buy signals for the average investor.

 

[J_aco]

II: if I'm not mistaken, in 2007 they recommended Timbercorp and ROC...

 

[Ausprop]

could the banks be likened to the supermarkets? this country is strangled by market dominance by a few key players in these sectors.

 

[jingo]

40% australian indexes
40% US index
15% emerging markets ETF
5% stock punts.


No fuss
no foresight required
meeting the market is outperformance of the active investor market.

I like this, xactly. Do you mind sharing which Index funds you are using?

 

[redwing]

5% stock punts.
.

What are the punts Xactly?

 

[Intrinsic_Value]

I don't see why you would assume the company as a whole will be under performing when both of these companies have become so diverse? Just looking at the WES revenue results from this year and the supermarket side of the business which you seem to be worried about are now less than 40% of the revenue... and Coles also had nearly 10% growth

Note: I don't own shares in either company, so there is no bias

yes very true, if I was really forced to choose I would choose WES over WOW.

But I don't need to choose, I don't see value in each (especially WOW), so I will avoid both.