Woolworths Limited (ASX: WOW) shares have fallen almost 44% in two years.
But despite falling from over $37 to just $21 per share, and underperforming the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) by 37%, it could get worse before it gets better.
3 reasons it might be time to sell Woolworths
- Home Improvement
Sure, Home Improvement wasn't well executed. But it took Bunnings Warehouse, owned by Wesfarmers Ltd (ASX: WES), decades to get to where it is today. Without Home Improvement, Woolworths is left with few growth opportunities over the long-term.
- Grocery
Woolworths is the largest Australian grocery business by sales, but it has its back up against the wall. With Aldi and Coles, also owned by Wesfarmers, breathing down its neck, the days of Woolworths' supermarkets being among the most profitable in the world appear over.
- Valuation
Though Woolworths shares have fallen, the recent news flow and trading updates provided by the company haven't been reassuring. Together with the recent dividend cuts, there's a case to be made that shares aren't cheap, meaning shares could fall further if the company cannot deliver some upbeat results in the near future.
