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Tricklar blog

Wesfarmers (Wes) : write-down

write-downArgo Investments managing director Jason Beddow said losses and writedowns at Bunnings' two-year-old home improvement business in the UK could dent Wesfarmers' appetite for acquisitions, especially offshore, forcing the conglomerate to focus on the low-growth Australian market.

Mr Scott has not ruled out pulling the plug on Bunnings' $1 billion investment in the UK after admitting the retailer suffered "self-inflicted" wounds by removing popular products from Homebase stores and sacking local staff following its $705 million acquisition of the UK's second largest home improvement chain.

"The market is likely to look through the impairments due to their largely non-cash nature with no dividend impact and a firming expectation that the new senior management team will announce an exit from Bunnings UK over the next twelve months," Mr Raymond said.

write-down2

Unveiling a $1 billion writedown of Bunnings UK and Ireland (BUKI) on Monday, Wesfarmers managing director Rob Scott said he would not let the troubled business hang over Wesfarmers for "years and years and years" in the way rival Woolworths was haunted by its disastrous Masters Home Improvement experiment. Bunnings has now converted 19 of Homebase's 200 plus stores to its own format. Source:news. com. au Management was “arrogant” thinking Brits would be won over by a “copy and paste” Australian model and the stores were stocked with the wrong products — super-sized barbecues beloved in Brisbane weren’t selling in overcast Birmingham. In an announcement ahead of its half year results, Wesfarmers said the Homebase/Bunnings UK & Ireland (BUKI) business and the struggling Target chain were responsible for $1. 3bn in writedowns.

Technical Analysis Summary: 16 Feb

BULLISH:--->

  • [BULLISH]: Wesfarmers current accumulation has given strength to the share price and the continuation of bullish trading conditions.
  • Argo Investments managing director Jason Beddow said losses and writedowns at Bunnings' two-year-old home improvement business in the UK could dent Wesfarmers' appetite for acquisitions, especially offshore, forcing the conglomerate to focus on the low-growth Australian market.
  • WES: SMA Recent Trading -> (1) 16 Feb: 40. 662 (2) 15 Feb: 40. 682 (3) 14 Feb: 40. 716


BEARISH:--->

  • WES: CLOSE Current Signal -> (1) 16 Feb: BEARISH (2) 15 Feb: BULLISH (3) 14 Feb: BEARISH
  • [BEARISH]: Wesfarmerssellers are keener than buyers and are driving the price down. This is the first day of price decline for WES adding strength to a downtrend change in the first timeframe. The biggest downward movement this month has been -4. 5 & the greatest daily negative change this year has been -4. 5. The longest consecutive downswing rally over the last 12 months has been 5 days giving a total rally downward movement of -4. 7%. This quarter, the largest downswing rally has been 3 days giving a total rally downward movement of -1. 1%. The loss ratio for price decline in the first timeframe for the last 12 months is 0. 5x giving a total win/loss ratio of 1. 1x. Over the last month the average daily downward movement has been -1. 3%
  • [BEARISH]: Wesfarmers is in an downtrend in the medium term timeframe. The current rally number is 6 & the highest rally count for the LTM is 24. The highest rally for the month is 11
  • [BEARISH]: Wesfarmers has a current ARU(25) of 44 and a current ARD(25) of 80
  • [BEARISH]: Wesfarmers currently has negative rate of change of -21%. This means the current volume is less than the price 14 days ago and therefore losing momentum. Currently, the return on momentum is -0. 4%.
  • [BEARISH]: Wesfarmers currently has negative Volume MACD of -276783. This means the signal line is less than the Volume MACD line signalling a bearish movement.
  • [BEARISH]: WesfarmersElder Ray Index is signalling a Bearish movementERI is -0. 832 indicating bear power. Prices are being driven below the consensus of value for WES during the last trading session [Selling Pressure]
  • [BEARISH]: Wesfarmers current distribution has given weakness to the share price and the continuation of bearish trading conditions.
  • [BEARISH]: Wesfarmers sellers in control. This is the first day of seller commitment for Wesfarmers adding strength to an downtrend in the first timeframe & highlights the lack of commitment of buyers to carry positions overnight Over the last 12 months there has been 65 trading days with the closing price in the lower part of the range giving a confirmation ratio of 25. 6%. Over the last month there has been 2 trading days with the closing price in the lower range giving a confirmation ratio of 18. 2%. Currently this quarter, closing price has spent 5 days in the lower price range compared to 6 days in the upper range giving a ratio of 0. 8x.

 

 

 

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