Consumer Staples was the only sector to fall in a bullish market yesterday, not surprising given recent strength as both Woolworths (WOW) & Coles (COL) trade within sight of their all-time highs. There is no doubt these are quality, defensive stocks, and they have proven this time and time again, however, 15-20% pullbacks are commonplace and with Woolworths (WOW) now trading on 25.8x earnings, around 32% above its historical earnings multiple, WOW in MM’s view will become susceptible to weakness if the market turns more bullish.
MM is neutral WOW around $39
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