WES has been a core holding in the Income Portfolio for nearly a year with the stock up ~50% over that period. The gains have clearly been on the back of a strong market however the Bunnings business which accounts for ~50% of sales but ~62% of profit of the group has also been firing. In more recent times the stock has simply been oscillating in a broad ~10% trading range with the all-time high above $56 providing the cap. Trading on an Est P/E of 25x and yielding an expected 3.5% fully franked over the coming year, we question whether or not funds should be allocated elsewhere, particularly given our large tilt to retail stocks in this portfolio. For now, we see no better opportunities for our capital however amongst our retail exposures we are most bullish on Metcash (MTS).
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Performance update for March, stocks that drove returns & our current positioning
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Friday 26th April – ASX200 -101pts, Newmont (NEM), Resmed (RMD) & Super Retail (SUL)
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Market Matters Research Lead Shawn Hickman with David Koch
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MM is neutral WES above $52
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