The Coles Group Ltd (ASX: COL) share price is trading lower on Wednesday morning.
At the time of writing, the supermarket operator's shares are down 1% to $17.90.
Why is the Coles share price falling?
The weakness in the Coles share price on Wednesday is likely to have been driven by news that major shareholder and former parent, Wesfarmers Ltd (ASX: WES), has been selling down its stake in the supermarket giant.
According to a report in the AFR, the conglomerate has sold a $500 million stake in Coles for a small discount to its last close price.
After the market close on Tuesday, Wesfarmers reportedly sold 28.2 million shares via a block trade at $17.75 per share. This represents a 1.8% discount to the Coles share price at yesterday's close.
While neither company has confirmed the transaction, a big trade was made on Tuesday, which appears to back up the report.
For example, a total of 31,042,457 Coles shares were traded during Tuesday's session. This compares to 1,789,401 shares on Monday and 2,571,330 shares a week earlier.
Should you buy Coles shares?
While Wesfarmers may be selling shares, one leading broker that believes investors should be buying them is Morgans.
Its analysts currently have an add rating and $19.70 price target on the company's shares. Based on the current Coles share price, this implies potential upside of 10% for investors over the next 12 months.
Morgans is also expecting fully franked yields of 3.4% in FY 2022 and 3.5% in FY 2023. If we add this into the equation, the total return stretches to over 13%.
It commented: "Trading on 22.9x FY22F PE and 3.5% yield we continue to see COL as offering good value with the company possessing defensive characteristics and a strong balance sheet (1H22 net cash $54m) allowing ongoing investment for growth."
