Timber!
Today, shares of Australia's largest supermarket operator continued their eye watering descent – plunging more than 2% to trade at a price not seen since early 2012.
Indeed, it certainly appears the market isn't willing to pick up what Woolworths Limited's (ASX: WOW) management is putting down.
Despite a brief rally early this week, Woolworths' share price is again more than 30% lower year over year.
By comparison, Wesfarmers Ltd (ASX: WES), which owns popular names such as Coles and Bunnings Warehouse, is down just 12% in the same time.
At these prices, Woolies shares have a price-earnings ratio of just 12.7x and boast a trailing fully franked dividend yield of 5.6%.
Is Woolworths a bargain?
Clearly, Woolworths investors are worried.
Is it the struggling Masters Home Improvement business?
Competition from Aldi and Coles?
Or lack of management certainty?
I'd say it's all of the above.
Should you be worried?
No one knows for certain what the future will hold, nor where Woolworths will fit into it. However, I'd say it's highly unlikely we've seen the best days of Woolworths because at worst, two of the above uncertainties are short term (management and Masters) and at best, all three of them will be dispelled five years from now.
Whether you decide to buy Woolworths' shares or not at least you know you can pick them up 30% cheaper today than you would've 12 months ago!
