Australian large retailers recover some losses, but beware of the future With the major supermarket chains, Woolworths (WOW) & Wesfarmers (WES) up an average...

Nicholas Forsyth

Market Matters

Australian large retailers recover some losses, but beware of the future With the major supermarket chains, Woolworths (WOW) & Wesfarmers (WES) up an average 2.8% over the past 2 weeks, we reconsider our sell recommendation. Two days ago, it is reported Sainsbury is suffering its worst sales performance since 1990s. This is not long after Tesco announced their recent profit warning, an investment that cost Warren Buffett dearly. Sainsbury's has fallen almost 50% since the highs of 2013. Tescos' has fallen 66% since the highs of 2007. The above illustrates to investors that size does not insulate companies from poor performance. Woolworths (WOW) - I remain negative with targets at least in the low $30 region. Wesfarmers (WES) - I remain negative with a target of the $37 area, over 10% lower. In conclusion, from a risk / reward basis, I am negative large Australian retailers and I would be selling into this period of current strength. (VIEW LINK)


Nicholas Forsyth
Director
Market Matters

Market Matters is an online investment and share trading advisory service designed for those that want to take their wealth further. We specialise in advice for active share market investors, including those new to the markets or those with a Self...

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