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Does MM like Woolies & / or Coles

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Does MM like Woolies & / or Coles

Hi MM Team, Just your thoughts on woolworths and coles in a interest raising environment?? worth a look since they have been pulling back-covid supply issues/staff?? also do you guy's look at a company debt/equity ratio as it is very high in these 2xcompanies. Also Data 3(dtl), your thoughts-increasing rev, dividend year on year Thanks Tim

Answer

Hi Tim,

We do like both WOW and COL into current weakness, basically in-line with our view that defensives should outperform in the second half of 2022 – our preference would be WOW under $33, or around 3% lower. We do look at debt levels but they mainly concern us when a business has not got solid reliable earnings to service this debt but this is unlikely to be the case with either WOW or COL hence the current period of weakness as supply chains disruptions weigh on the companies we see as an opportunity. Worth noting, we own and like Metcash (MTS) in our Income Portfolio.

As for Data3 (DTL) is hasn’t really moved in 18-months hence we’re neutral until the company can perform well enough to excite investors.

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Woolworths (WOW)
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