Westfield is still below $11 -- should you buy?

Westfield is still below $11 — should you buy?

This Fool thinks there is still significant growth potential ahead.

Ryan Newman (TMFNewmy)

Ryan Newman (CFA) is the Director of Research of The Motley Fool Australia, and Portfolio Manager for the Pro and North Star services. Ryan’s interest in investing and stocks began at a young. His journey with The Motley Fool started first as a member but when the company first came to Australia he joined the team as one of our writers. Recognising his investing talent and passion, it wasn’t long before he was approached to join the investing team as a research analyst on Pro. Ryan is passionate about learning and continual development. He earned his Chartered Financial Analyst (CFA) designation in 2022, and has completed his Bachelor of Accounting and his Graduate Certificate of Corporate Finance. Ryan loves spending time with his young family as well as non-fiction reading, catching the latest movies and following his sports team, the St Kilda Saints (AFL).

Published September 27, 2013 1:01 pm AEST

Westfield Group (ASX: WDC) is still trading below the $11.00 per share mark based on fears related to the future of the brick and mortar retail sector. However, it seems that many investors are not fully taking into account the measures being undertaken by the company to overcome such challenges.

Westfield, along with its affiliate Westfield Retail Trust (ASX: WRT), has embarked on a mission to strengthen its global property portfolios — divesting shopping centres with little development or expansion potential and instead focusing on those with more promising futures.

For instance, a portfolio comprising of seven US malls was recently sold to Starwood Capital Group, raising a total of US$1.64 billion which will be put towards further redevelopments and share buybacks. Meanwhile, the group has also announced that it will sell its 33% stake in Perth's Karrinyup Shopping Centre, despite having been given the green light to take full control of the centre by the Australian Competition and Consumer Commission.

At the same time, various opportunities have been recognised in London and the company is also continuing to search for an opening back into the promising Brazilian market.

Although doubt looms over the retail sector in light of poor consumer confidence as well as a rapidly increasing level of online shopping, shopping malls will always remain a place for people to socialise or go to restaurants or see movies. By cutting its non-core properties and choosing to reinvest that money in more promising shopping centres around the world, Westfield is strengthening its position as a world leader in its industry and freeing up cash in the meantime.

Foolish takeaway

Westfield is trading at just $10.87 per share, which resembles a 13.4% drop since hitting its high of $12.55 in May this year. Although it is one of Australia's largest companies already, there is still significant growth potential ahead as it seeks to expand into new markets, making it an attractive prospect.

Still thinking of shopping for other stocks instead? Are you interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

More reading

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.