Australian (ASX) Stock Market Forum

WES - Wesfarmers Limited

Jump to new
Ferret said:
I agree WES is looking expensive, but if it's "way too expensive" to put in a buy order, why is it ok to buy through the dividend reinvestment scheme?
Click to expand...
well i think the price will trend down with the overall market in time

i am hoping WES will either divest Office-Works or spin off a property trust similar to BWP

so , so far it is worth my while to slowly accumulate and the DRP increase isn't 'sheep stations currently ( i reduced the holding April last year )

and any useful WES order would several magnitudes larger than my DRP allotment

however it is about time i decide which DRP participations i should cancel and just use the cash generally ( invest/pay bills etc.)
 
divs4ever said:
well i think the price will trend down with the overall market in time

i am hoping WES will either divest Office-Works or spin off a property trust similar to BWP

so , so far it is worth my while to slowly accumulate and the DRP increase isn't 'sheep stations currently ( i reduced the holding April last year )

and any useful WES order would several magnitudes larger than my DRP allotment

however it is about time i decide which DRP participations i should cancel and just use the cash generally ( invest/pay bills etc.)
Click to expand...
No matter what WES is a powerhouse company and for those that are holding should be laughing all the way to the bank.
It seems the management can do no wrong.
Hopefully this scenario is kept alive.
 
the theoretical average is $38.02

but that ignores the first parcel was funded by flipping BKL shares ( 1 BKL into 3 and a bit WES shares )

and the BKL were already 'free-carried' at the time ' ( so arguably profit )

sounds complicated but the math was compelling

i BKL ( ex. div ) , for 3 plus WES ( cum div.) ( including brokerage )

and have since nibbled down in WES until a bigger buy after the COL spin-off ( in 2018 )
 
i see WES as an investment vehicle and so far the stumbles have been few ( the Kidman Resources buy still has to prove itself in my opinion )
 
SQM says its takeover of Azure Minerals won’t be its last push into Australia as it expressed confidence that a commodity price recovery would bolster future returns from its new Mt Holland lithium partnership with Wesfarmers.

SQM chief executive Ricardo Ramos described Australia as the next global lithium bowl, and flagged “aggressive” ongoing investment in the country over coming years at the opening for the Mt Holland Mine 400 kilometres east of Perth on Thursday..

“We want to invest more, we think it’s a great project, I would love to have 10 different Mt Hollands in Australia, one is not enough.” Mr Ramos said.

“We have a very good team in Australia looking for high-quality projects, and we think we will find opportunities in the future, and we will wait until we have those opportunities.”

Wesfarmers chief executive Rob Scott, who joined Mr Ramos at the mine opening, said he was confident the Covalent joint venture – which will produce lithium hydroxide from a facility south of Perth from 2025 – would turn a profit at today’s prices.

"Once the project is up and running based on where the prices are at the moment, we should be profitable, recognising that we do have, we think, the competitive advantage around lithium hydroxide,” Mr Scott said.

“So what really matters to us is not what’s happening to the price today, but where the price will be in the years ahead."

Scott said while Wesfarmers was open to other lithium ventures, the Mt Holland mine had the capacity to double in size, which he said would be the company’s priority if it were to invest further.

Wesfarmers has spent $892 million on the Mt Holland mine and the partly-built lithium hydroxide plant, which is on top of the $776 million it paid for Kidman Resources for the asset in 2019.

Mr Scott said stalled projects by other producers could lead to supply tightening and prices bouncing back, while Mr Ramos has predicted the battery mineral will likely lift in the second half of the year.
 
with Priceline bedding down in the healthcare division of WES, the gorilla in the room is Chemist Warehouse.

Now there's a plan afoot to merge/ back list CW into Mayne Pharma. When MAY reported last week, there was some CW disclosure that emerged.

... "the really impressive numbers from Chemist Warehouse were its margins. At the earnings before interest and tax line, Chemist Warehouse delivered a margin of 18.3 per cent in the December half, sharply up from 16.2 per cent in the prior year.

Let’s put that in some perspective.

"Sigma itself has an EBIT margin of 0.7 per cent, although it should be noted that Sigma makes most of its earnings from wholesaling rather than retailing. Coles’ EBIT margin is 5.1 per cent. Inside Wesfarmers, the Bunnings, Kmart and Officeworks chains have EBIT margins of 12.8 per cent, 9.9 per cent and 5.1 per cent respectively. Woolworths’ EBIT margin is 6.1 per cent, and its Big W discount department store had an EBIT margin of 2.1 per cent.

"Clearly, these are all very different businesses to a franchised pharmacy chain. But the comparisons are not completely out of kilter, given Chemist Warehouse makes about 67 per cent of its sales from what is called the front of the store – that is, not the pharmacy dispensing counter.

CW growth is said to be at 9 per cent while across the sector it's only nudging 3 percent... Who's losing market share?
 
Dona Ferentes said:
with Priceline bedding down in the healthcare division of WES, the gorilla in the room is Chemist Warehouse.

Now there's a plan afoot to merge/ back list CW into Mayne Pharma. When MAY reported last week, there was some CW disclosure that emerged.

... "the really impressive numbers from Chemist Warehouse were its margins. At the earnings before interest and tax line, Chemist Warehouse delivered a margin of 18.3 per cent in the December half, sharply up from 16.2 per cent in the prior year.

Let’s put that in some perspective.

"Sigma itself has an EBIT margin of 0.7 per cent, although it should be noted that Sigma makes most of its earnings from wholesaling rather than retailing. Coles’ EBIT margin is 5.1 per cent. Inside Wesfarmers, the Bunnings, Kmart and Officeworks chains have EBIT margins of 12.8 per cent, 9.9 per cent and 5.1 per cent respectively. Woolworths’ EBIT margin is 6.1 per cent, and its Big W discount department store had an EBIT margin of 2.1 per cent.

"Clearly, these are all very different businesses to a franchised pharmacy chain. But the comparisons are not completely out of kilter, given Chemist Warehouse makes about 67 per cent of its sales from what is called the front of the store – that is, not the pharmacy dispensing counter.

CW growth is said to be at 9 per cent while across the sector it's only nudging 3 percent... Who's losing market share?
Click to expand...
Who's losing market share, I would suggest it's the "corner store" pharmacy, they can't compete with the buying power of CW.
 
Mr. and Mrs. Shoppingtrolley continue to bolster WES.

A very nice chart. On for $100 by years end.

FYI @debtfree

wes.png


gg
 
One of my picks in the FY2024 Stock Competition @debtfree

WES continues its slow course upwards being 19+% gain since Jan 1st. It has dropped back the last few days in sp. Perhaps a time to add, or will it drop further? I may be tempted next week. at a divi of 2.91% FF for a growth stock it is tempting for my SMSF but it is a not insignificant percentage of the total. Anyways ...

wes.png


gg
 
divs4ever said:
well i think the price will trend down with the overall market in time

i am hoping WES will either divest Office-Works or spin off a property trust similar to BWP

so , so far it is worth my while to slowly accumulate and the DRP increase isn't 'sheep stations currently ( i reduced the holding April last year )

and any useful WES order would several magnitudes larger than my DRP allotment

however it is about time i decide which DRP participations i should cancel and just use the cash generally ( invest/pay bills etc.)
Click to expand...
Why? Officeworks is a good business. Its averaging (over the cycle) a return on capital employed of over 20% as far as I am aware of and it it dominates its category so why would you want to divest it?
 
Value Hunter said:
Why? Officeworks is a good business. Its averaging (over the cycle) a return on capital employed of over 20% as far as I am aware of and it it dominates its category so why would you want to divest it?
Click to expand...
yes i agree Office-Works is doing very well , and i believe owns some of the property where outlets are situated , however the fate of Office-Works has been discussed several times the WES discussions on the future of WES ( at management level )

why divest , well WES divested COL , maybe management can increase shareholder value by setting it free ( or at least a separate property trust ) i would prefer the property trust scenario , but let's see if anything happens at all

( it wasn't that long back WES divested it's coal interests , which were nicely profitable )
 

Similar threads

divs4ever
ZYAU - S&P/ASX 300 High Yield Plus ETF
Replies
0
Views
1K
divs4ever
divs4ever
S
What could be safer than writing a covered call?
Replies
15
Views
2K
Santafe
S
S
Share some knowledge about day trading the ASX as a mentor
Replies
6
Views
2K
Assasin
Assasin
Fiona96
Trading US Stocks
Replies
3
Views
2K
karenjones
K
gedw99
Interactive brokers and Australian tax
Replies
2
Views
2K
lewischan
L
Top