The likes of Woolworths (WOW) and Coles (COL) are probably the best examples of “recession-proof businesses” and during tougher economic climates, these stocks are generally more stable although when the market gets re-rated lower they are likely to follow suit but in a more subdued manner. COL delivered a disappointing sales update in late October but as supply chain and labour issues start to improve we believe the large supermarkets will follow suit.
- We like COL into dips under $18 – an estimated 33c fully franked dividend will appeal to yield-hungry investors.
MM is neutral to bullish COL under $18
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