• Australian (ASX) Stock Market Forum

WOW or WES?

Discussion in 'ASX Stock Chat' started by OK2, May 20, 2010.

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  1. OK2

    OK2

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    WOW or WES which of the big two consumer brands looks better set for future expansion and aquisition?
     
  2. ROE

    ROE

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    I say WOW ... WOW can do more damage to Bunnings than WES can damage Wollie Groceries.
    right now WOW and WES each command their own market share in Groceries with very small movement between
    them from quarter to quarter..

    but Bunnings dominate the market so when WOW enter it can only take market share away from bunnings and if it do a good job history may repeat itself :)

    WOW used to be smaller than Coles in supermarket then Uncle Corbett came along and kick ass and bring home the bacon and the rest is history...

    Go with the proven team..nothing WOW touch are bad ... they dont have liquor they buy it and it prosper, they dont have hotel and pokies they buy into that and they make good money

    they dont have hardware they buy into that and with proven track records they will prosper :D

    Nothing WOW do, they just get up and do they have a culture of well research team, they studies the in and out of the business long before they make a move on them....hardware is not something they do in the last 12 months its been on their long term plan of thing to do...

    When you have a team that is well prepared and a culture of excellent execution you know what result you get in the end :D

    plus it's a better company than WES in term of balance sheet it can have a price war with WES and it hit WES harder with their diluted pool of shareholders and heavy weight on debt...
     
  3. sptrawler

    sptrawler

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    I agree with ROE'S assesment of WOW. However WES has a lot more diversity so are therefore not as linked to consumer spending. I think both companies have a lot of upside. If Australia goes into a downturn WOW if the economy is on an upturn WES.
     
  4. stevier95

    stevier95

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    WOW vs. WES

    Would be quite interested to hear everyone's opinions on these two shares.

    I hold both, but am wanting to understand which one people prefer.
     
  5. coolcup

    coolcup

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    Re: WOW vs. WES

    Depends on what you are looking for. WOW is a more pure play exposure to grocery / liquor retailing whereas WES is a more diversified play with a whole heap of other businesses.

    I personally would only go with WES if there was some logic to the conglomerate nature of their business. That is to say by combining insurance, coal mining, grocery / liquor, hardware, chemicals / fertilisers and industrial safety businesses together somehow provided a superior risk adjusted total return proposition for shareholders.

    I am not sure their P/E premium over WOW is all that justified. I should preface this though by saying that I think WOW and Coles are on out of sync cycles in terms of store refurbishments. Coles has refurbished its stores more recently than WOW which is why their sales growth is superior (plus coming off a low base). WOW is closer to its next "Project Refresh" and consumers will go to their stores when they are refurbed and the Coles stores are looking tired and old like Woolies stores are today. Long story short - I don't think Coles can sustain a higher rate of sales growth over Woolies over the very long term without sacrificing margins to achieve it.
     
  6. ROE

    ROE

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    Re: WOW vs. WES

    not to mention they run the biggest Pokie join in Australia :D
     
  7. Julia

    Julia In Memoriam

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    I endorse ROE's comments. Would prefer WOW. They always manage to just stay ahead with their forward planning. Plus they have less debt.
    Both charts are fairly similar, as is yield.

    I don't see WES growth with respect to Coles as a defining feature because it comes from such a woeful base.
    WOW are consistent. Even now, despite Coles refurbishments (at least in my local store) the fresh section still misses compared to WOW, and service is slack.

    Ditto Target. No wonder this business is in trouble. Zero service and product range is pathetic.
     
  8. Letts

    Letts

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    I have to agree Julia, it's the same in my area - the two Woolworths are always well run and busy, whereas the Coles around seem to be mostly quite poorly run and do not have anywhere near as many customers.
     
  9. sydboy007

    sydboy007

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    I am worried that Woolworths has been losing some of its financial focus.

    When you look at same store sales they are growing sales mainly through new stores which might pay off in the long run, but they could be doing s starbucks and opening up too many marginal stores.

    The Masters rollout is going to be very costly for WOW. Not sure how long it will take for a store to become profitable, but they are up against Bunnings which is a well run company that already has scale economics behind it.

    WES has issues in terms of the coal price going south. I'd say that is going to be a drag on earings over the next few qtrs.

    Still, both companies will churn out the dividends and over the long run they're a safe bet, but I sorta feel better about WES over WOW for some reason. I think it's the Masters rollout that scares me about WOW. If it doesn't got o plan then WOW is going to burn a lot of capital.
     
  10. Judd

    Judd

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    Appears the Masters venture is bleeding like a stuck pig. Meanwhile, WES has announced a proposed return of capital of $0.50 per share and a final dividend of $1.03ff. Fascinating times.
     
  11. keylargo

    keylargo

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  12. piggybank

    piggybank

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    It just goes to prove that even the so called "EXPERTS" don't know what they are talking about!! They have had several "shake ups" (including a CEO going) going and it is still bleeding. God help us all if they bail out - it would be time to jump on board with WES & BWP. After all their prices would shoot up!! An interesting article below stating the consequences if Masters does fall over. I've been p----d off (pardon the English) that I haven't been able to get a job (not even an interview) at the local Masters store since it opened 2 years ago. Yet nearly everytime I've gone in they hardly ever have anyone on the shop floor who is over 40 (unlike Bunnings). Doesn't experience and a knowledge of a lot of the products mean anything to a struggling company? Over the weekend we went in the local Masters to look at possibly buying some outside furniture from there. As usual you are greeted by 2/3 workers, then you are left alone. The wife was interested in knowing what the price for a sun-lounger (as there wasn't a price on it (along with some other items close by) when we finally tracked somebody down to help us they went missing in action for 10 minutes, which was enough for the wife and I, so we went to make our way out when we crossed paths with the guy. Off already he said - did my blood boil - the price is $--- each. The wife then asked if we could purchase a couple but he said he didn't know how many were in stock? Enough said, and he was one of their supposedly experienced workers. Personally I think they are out of their depth and they certainly don't have the right staff with hardly any knowledge of the items they are trying to sell to.

    Btw, I have been an holder of WOW shares for 10 years now but I wonder if they are going to be worthless (a few years) unless senior management is made more accountable to its shareholders?

    http://www.news.com.au/finance/busi...minating-masters/story-fnkgdftz-1227572366422

    Cheers
    PB

    http://www.news.com.au/finance/busi...minating-masters/story-fnkgdftz-1227572366422
     
  13. MrBurns

    MrBurns

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    I'm sticking with WES as they have Bunnings :xyxthumbs and WOW have Masters :bad:

    Was told to watch Aldi but went to one of their stores today for a look...... very downmarket.
     
  14. MrBurns

    MrBurns

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    Both WOW and WES hit hard today what's going on ???
     
  15. Junior

    Junior

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    Shocking sales figures & profit downgrade from WOW today, presumably fears that next set of Coles figures will also disappoint.
     
  16. tinhat

    tinhat Pocket Calculator Operator

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    Increased competition in supermarkets (and probably liquor - I don't follow) squeezing margins. I was holding WOW purely for income and with question marks over the sustainability of its dividend in the medium term, I sold out not long ago. Still holding a very small parcel of WOW but would be happier if they got rid of their coal assets.

    WOW should divest of its hotel (ie, gaming) assets too. IMHO this is not a long term ethically sustainable investment.
     
  17. qldfrog

    qldfrog

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    you mean WES;
    but yes WOW is in gambling/liquor stores
     
  18. tinhat

    tinhat Pocket Calculator Operator

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    Still holding a very small parcel of WOW...

    This should say

    Still holding a small parcel of WES...
     
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