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I recently read numerous Switzer articles about the upcoming Christmas Rally, including James Dunn’s article from Monday 10 November 2014 about a number of good retail sector shares to consider.
I currently hold shares in Metcash Limited (MTS) and based on expert recommendations from FN Arena (consensus target price $2.76) it would appear to be a good time to sell them and cut my losses (I bought around $3.10/share).
Do you think MTS will benefit from a Christmas Rally as well? Do you think I should hold onto them for a little longer, or sell them?
A: I think it is unlikely that Metcash (MTS) would be a major beneficiary from a Christmas rally in consumer stocks as firstly, it is classified within the ‘consumer staples’ sector, and secondly, grocery purchases (from the businesses it supplies) aren’t really considered to be discretionary. There may be a little bit of a glow – but not much.
