In today’s report (Buy, Sell, Hold – what the brokers say – Rudi Filapek-Vandyck, 08/05/17), Macquarie has downgraded Woolworths from neutral to sell.
What’s your view please? I hold a large portion of my portfolio 2341 shares / 21% with cost base price of $2.45.
Should I sell some or do the dividends make it a good hold?
A: The market sees Woolworths as a recovery stock, but I think it has had a large part of the run up.
I think it is rather expensive -trading on a forecast multiple of 24.5 times FY17 earnings, 21.3 times FY18 earnings. Forecast dividend yield of 2.5% and 3.2% for FY18.
So, I am in the “reduce” camp.
The question you may want to ask – what are you going to replace it with?
Regards
