COL is trading in line with its historical average valuation, but like most “defensive” stocks, it’s not significantly rich compared to many on the ASX. We prefer COL over Woolworths (WOW), with it having executed far better from an operational perspective in the last few years. Value has returned after its recent 10% pullback, while the ASX200 pushed to new highs and WOW consolidated around $32, although we note they both look ok at current levels. Going into supermarkets is 101 defensive investing, but when they’re showing reasonable value and set to yield more than the RBA Cash Rate, they should be on our radar.
- We like the risk/reward towards COL and can see new highs ~$23 – it’s forecasted to yield more than 3% over the coming year.
MM is bullish on COL below $21
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