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Is it time to buy Coles (COL)?

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Question asked 23/04/2021

Is it time to buy Coles (COL)?

Hi team, Wondering if you think Coles is finally a buy? Regards P & B Hopley.

Answer

Hi Guys,

The supermarkets space is actually a fascinating one at the moment, and we don’t often say that, however COVID, like many things has accelerated the move towards online where scale is incredibly important. In 2019 $5.5bn worth of groceries were sold online, that number jumped to $8.7bn in 2020, and we think much of that transition is now ‘sticky’.

COL continues to bounce around between $15.50 and $16 following the sharp drop in February after delivering a disappointing half year result which showed a drop off in market share combined with a tough near term outlook, hence their reintroduction of the red finger campaign.

MM is not considering COL just yet, but weakness below $15 would return value to the stock, especially from a yield perspective. We prefer Metcash (MTS) overall which we hold in the Income Portfolio.

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Coles Group Ltd (COL)

LAST UPDATED 23/04/2021 11:25

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