In early trade today shares of supermarket giant, Woolworths Limited (ASX: WOW), hit their lowest price ($28.53) in over two years, after going ex-dividend.
Its shares have been hammered over the past six months, falling over 18%, as investor sentiment turned sour in the wake of growing competition from foreign rivals like Aldi and, to a lesser extent, Costco.
There's also teething problems associated with its Home Improvement business, Masters, which has been unable to post a profit since inception. Many commentators have questioned its intention to go head-to-head with rival Wesfarmers Ltd's (ASX: WES) Bunnings Warehouse.
However, at their current price, its shares look cheap. Trading on a forecast price-earnings ratio of 14.5 and dividend yield of 4.7% fully franked.
Whilst the increased competition is a genuine threat to both supermarket giants, Woolworths and Coles, the recent share price selloff appears to have provided a buying opportunity for savvy long-term investors, in my opinion.
For those focused on the long term, right now could be a great time to stock up on Woolworths shares…I know I recently did.
