Woolworths Share Price Analysis and Investment Decision
Added on 2020-09-09
23 Pages2827 Words353 Views
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Table of ContentsTable of ContentsTable of Contents........................................................................................................................................1Part 2...........................................................................................................................................................2(a) Brief Description of Each Company....................................................................................................2(b) Graphs, Share price table and All Ordinaries Index of Each Company...............................................3(c) Overview of Share price Performance................................................................................................6(d) Calculation of Gain and Loss on Portfolio...........................................................................................7(e) Recommendation of the share portfolio............................................................................................8Part 3...........................................................................................................................................................8(a) Identification of Key financial data.....................................................................................................8(b) Ratio Analysis.....................................................................................................................................8Liquidity...............................................................................................................................................8Stability................................................................................................................................................9Profitability........................................................................................................................................10Investment.........................................................................................................................................10References.................................................................................................................................................12Appendices................................................................................................................................................131 | P a g e
Part 2(a) Brief Description of Each CompanyBHP Group Limited (ASX: BHP)Woolworths Group Limited (ASX:WOW)Wesfarmers Limited (ASX: WES)Products AluminumCopperMagnesiumIron OreUraniumNickelSilverTitanium MineralsPetroleumCoal Food Petroleum productLiquor Discounted General Merchandise HotelsHome improvementOutdoor livingApparel General merchandise Office suppliesChemicalsEnergyFertilizersResourcesIndustrial safety productsServicesBHP is an International resource company which offers mineral exploration and production as well as petroleum exploration, production, and refining.Procurement of food, discounted general merchandise, liquor, and petroleum products for Australian consumers andalso serve the consumers in the hospitality businesswith leisure, food, liquor, accommodation, entertainment, and gaming. Food and Liquor for New Zealand consumers.Wesfarmers serves its customer with its wide range of portfolio spanning across the retail, industrial and other sectors like property,investment banking, etc. Name of Chief Executive Officer or Managing DirectorAndrew StewartMackenzie Bradford BanducciRob ScottSalary of Chief Executive Officer or Managing DirectorUS$1.7 million per annumAUD$7.7 million per annumAUD$6.5 million per annumProfit and Loss after TaxUS$4.823 billionAUD$1.795 billionAUD$1.197 billionLatest Dividend Paid 78.08¢(26 Mar 2019) 45¢(05 Apr 2019)100¢(10 Apr 2019)Size of Business by Total AssetsUS$ 111.9 billionAUD$23.558 billionAUD$36.933 billionNumber of Employees62,000202,000217,000 Share Price – 52 Weeks (High and Low)High: 42.330Low: 29.062High: 38.060Low: 27.030High: 40.43Low: 29.54Table 1: Comparative Description of Each Company2 | P a g e
(b) Graphs, Share price table and All Ordinaries Index of Each CompanyDateAORDBHPWOWWES29/07/20196911.440.635.3840.0530/07/20196928.340.8335.4839.8431/07/20196896.740.7635.6239.1901/08/20196871.940.2635.5839.6302/08/20196846.138.7835.7738.8605/08/20196710.637.5735.5439.206/08/20196546.537.134.7137.8907/08/20196588.536.7535.538.6808/08/20196642.337.335.539.0909/08/20196663.437.2935.438.7912/08/20196670.137.0135.6439.1113/08/20196648.137.0135.8838.6614/08/20196677.537.4235.743915/08/20196490.836.3934.7837.7316/08/20196485.936.1734.9937.8419/08/20196550.536.2535.3538.2220/08/20196627.436.336.1238.9821/08/20196572.635.2536.138.7922/08/2019659335.236.0138.923/08/20196614.335.4235.9939.3526/08/2019653134.6935.6738.6927/08/20196565.634.9535.9739.128/08/20196600.835.4236.1839.28Table 2: Closing Prices of BHP, WOW & WES with All Ordinaries Index from 29-July-19 to 28-Aug-193 | P a g e
7/29/20197/30/20197/31/20198/1/20198/2/20198/5/20198/6/20198/7/20198/8/20198/9/20198/12/20198/13/20198/14/20198/15/20198/16/20198/19/20198/20/20198/21/20198/22/20198/23/20198/26/20198/27/20198/28/2019620063006400650066006700680069007000ALL ORDINARIES INDEXChart 1: All Ordinaries Index Chart7/29/20197/30/20197/31/20198/1/20198/2/20198/5/20198/6/20198/7/20198/8/20198/9/20198/12/20198/13/20198/14/20198/15/20198/16/20198/19/20198/20/20198/21/20198/22/20198/23/20198/26/20198/27/20198/28/201930323436384042Share ComparisonBHPWOWWESAxis TitleSharePriceChart 2: Size Comparison Chart4 | P a g e
7/29/20197/30/20197/31/20198/1/20198/2/20198/5/20198/6/20198/7/20198/8/20198/9/20198/12/20198/13/20198/14/20198/15/20198/16/20198/19/20198/20/20198/21/20198/22/20198/23/20198/26/20198/27/20198/28/201962006300640065006600670068006900700030323436384042BHP in Comparison wih AORDAORDBHPAORDIndexSharePriceChart 3: BHP Price Comparison with AORD Index7/29/20197/30/20197/31/20198/1/20198/2/20198/5/20198/6/20198/7/20198/8/20198/9/20198/12/20198/13/20198/14/20198/15/20198/16/20198/19/20198/20/20198/21/20198/22/20198/23/20198/26/20198/27/20198/28/201933.53434.53535.53636.5620063006400650066006700680069007000WOW in Comparison with AORDWOWAORDSharePriceAORDIndexChart 4: WOW Price Comparison with AORD Index5 | P a g e
7/29/20197/30/20197/31/20198/1/20198/2/20198/5/20198/6/20198/7/20198/8/20198/9/20198/12/20198/13/20198/14/20198/15/20198/16/20198/19/20198/20/20198/21/20198/22/20198/23/20198/26/20198/27/20198/28/201936.53737.53838.53939.54040.5620063006400650066006700680069007000WES in Comparison with AORDWESAORDSharePriceaORDINDEXChart 5: WES Price Comparison with AORD Index(c) Overview of Share price PerformanceIn the tracking period, the index and share prices have been heavily affected due to the tradewar between China and the United States. The market is volatile from this global and domesticrisk where all sectors are being affected regardless of a direct impact. Australia is suffering inthis war due to the fact that the United States is its key strategic ally whereas, China is theirmajor trading partner. This war can lead towards a Global economic system rather than a US-Centric Economic system which is in future benefits everyone globally. The Chinese are allowingits currency to devalue to have the price tag on their goods at a cheaper rate, however, thisproves to be a big risk for Australia. This tug of war is between a political ally and economicpartner is proving to be a disaster for Australia and it's Stock Exchange (Butler, 2019).BHP which has its roots embedded in the United States has been suffering in the stock marketdue to this tug of war, on 29th July the stock closed on AUD$40.6 and was sustaining its price inthe upcoming days corrected itself after the index dropped 365 points till the 06th of Augustbringing the price of BHP to AUD$37.1 reducing an overall AUD$3.5 in 6 days. There werearound $64bn wiped from the stock exchange by 15th of August when the market suffered anall-time low in 18 months 6490.8, around 2.8% from the previous day and dropping a total of420.6 points since the start of the tracking period (Farrer, 2019). BHP closed at AUD$35.42dropping a total of AUD$5.18 in the tracking period which reflects around 12.75% drop in theshare price for the tracking period. The price of the stock was saved in the middle of thetracking period due to an announcement of dividend but crashed again around 2.9% after the6 | P a g e
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