Australian Investment Blog

The large Food Retailing stocks have underperformed recently, an opportunity looming?

I continue to look around the market for potential areas to switch some of my bank holdings as interest rates get set to rise, Woolworths and Wesfarmers are stocks a lot of investors comfortably hold. All three of the below stocks pay reasonable dividends, but after excellent capital growth from Woolworths (WOW) and Wesfarmers (WES) over the last three years, my concern is the share piece itself. Competition is clearly very aggressive between WOW and Coles (WES) and they can only get so efficient; making capital growth hard without obviously opening new stores and / or diversification. While I believe both WOW and WES are excellent companies, I believe they are fully priced and the next 10% move is more likely to be down.