Wool­worths

Townsville Bulletin - - Investor -

Ja­son Fit­tler Minc Fi­nan­cial Ser­vices Wool­worths ( WOW) is Aus­tralia’s premier ma­jor re­tailer­op­er­at­ing su­per­mar­kets, dis­count depart­ment stores, con­sumer elec­tron­ics and more re­cently hard­ware and home im­prove­ment stores.

It has an en­vi­able sales and earn­ings track record.

Mar­ket cap­i­tal­i­sa­tion ex­ceeds $ 36bn with an­nual sales ap­proach­ing $ 52bn.

Com­pound an­nual growth rates around 18% for earn­ing per share and div­i­dends per share has driven ex­cep­tional to­tal re­turns over the past decade.

This re­flects well on man­age­ments op­er­a­tional and share­holder fo­cus and is re­spon­si­ble for its pre­mium rat­ing.

The re­tail sec­tor is in­deed un­der pres­sure es­pe­cially when Wool worths down­graded its first half 2011 and full year 2011 guid­ance on 24 Jan­uary.

If the premier re­tailer was ’ un­der the whip’ how are the other re­tail­ers far­ing?

WOW has an en­vi­able track record with ex­cep­tional to­tal re­turns over the past decade.

Pro­ject Re­fresh is a great suc­cess cap­tur­ing over $ 9bn in cu­mu­la­tive sav­ings with an­other $ 1.5bn to come through fur­ther lo­gis­tics and de­vel­op­ment ini­tia­tives.

WOW is a de­fen­sive growth stock with a solid bal­ance sheet and an im­pos­ing moat sur­round­ing its eco­nomic cas­tle.

Trad­ing at $ 26.00 with a gross yield 6.5% and a price tar­get of $ 30 this should be a core hold­ing.

This in­for­ma­tion is gen­eral. Prospec­tive in­vestors should con­sider their own ob­jec­tives, fi­nan­cial sit­u­a­tion and needs.

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