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I run my own super and am thinking of adding BHP and RIO to my bank shares. Do you think WES would be a buy at these prices? I also hold WOW shares.
Your opinion would be appreciated!
A: Thanks for the question.
I think Wesfarmers has had a pretty good run up. I am inclined to think that Woolworths is now offering better value.
Over the course of 2013, WES increased in price by 19.5% - WOW by 15.4%. While a lot of the Wesfarmer’s gain came in the last couple of month’s with the return of capital and sale of their insurance business, I understand that the “supermarket” war is now pretty even – with both companies experiencing sales growth at about the same rate. Woolworths trades on a lower PE and is a pure play retailer – Wesfarmers has exposure to the coal industry and other businesses..
I think you should have exposure to the consumer staples sector and at the moment, I favour Woolworths over Wesfarmers.
Regards.
