WOW AU

Woolworths Ltd

Consumer


Presented:08/05/2015
Price:A$28.12
Cap:$26.13B
Current Price:A$32.95
Cap:$31.47B

Presented

Date08/05/2015
PriceA$28.12
Market Cap$26.13B
Ent Value$28.82B
P/E Ratio14.47x
Book ValueA$8.65
Div Yield4.8%
Shares O/S1,261.92M
Ave Daily Vol4,060,000
Short IntN/A

Current

PriceA$32.95
Market Cap$31.47B
Woolworths Ltd. operates general merchandise consumer stores and supermarkets in Australia, New Zealand and India. The company operates supermarkets under the brand names, Woolworths and Safeway in Australia and under the brand name Countdown in New Zealand. It operates through five segments: Australian Food, Liquor & Petrol, New Zealand Supermarkets, General Merchandise, Hotels and Home Improvement. The Australian Food, Liquor & Petrol segment engages in the procurement of food and liquor and products for resale to customers in Australia. The New Zealand Supermarkets segment engages in the procurement of food and liquor and products for resale to customers in New Zealand. The General Merchandise segment engages in discount general merchandise products for resale to customers predominantly in Australia. The Hotels segment provides leisure and hospitality services including food and alcohol, accommodation, entertainment and gaming. The Home Improvement segment provides home improvement products for resale to customers in Australia. The company was founded on December 5, 1924 and is headquartered in Sydney, Australia.

Publicly traded companies mentioned herein: Woolworths Ltd (WOW AU)

Highlights

Australian supermarket operator Woolworths (WOW) appears to be earning outsized margins in an increasingly competitive retail market. The presenter is short the stock and sees meaningful downside risk from current levels (28 - 29 AUD; please note, all figures herein are AUD unless otherwise specified). The Street is presently anticipating ~1.80/share of earnings power for the fiscal year ending June 30, 2016 and his forecast is closer to 1.30/ share. With new competition gaining traction with the Australian consumer, an ineffective strategy, and management turnover, the presenter sees WOW as unlikely to be able to right the ship before margins degrade and the stock price suffers.

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Idea Discussion

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