Woolworths: Risk Reward Becomes More Compelling

Sam Ferraro

Global Founders Funds Management

Last month, Evidente published an open letter to the Woolworths CEO, Grant O'Brien, suggesting that a lack of corporate focus had contributed to the company's poor recent performance. I remain concerned about the ability for Mr O'Brien and his senior team to effectively manage the turnaround of number of disparate and under-performing businesses, particularly Big W and Masters. But the announcement at the recent strategy day to re-allocate capital towards its supermarket business is a welcome development. At current levels, analysts and investors have become unduly pessimistic about the company's future growth prospects. I recommend that investors neutralise their underweight bet in the stock and use any renewed price weakness to start building an overweight position. (VIEW LINK)


Sam Ferraro
Senior Portfolio Manager
Global Founders Funds Management

Managing Director of Global Founders Funds Management, Sam has over 20 years experience in financial markets, with Merrill Lynch, JBWere and Goldman Sachs.

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