Buy Coles, short Wesfarmers

Wednesday, 15 August 2018

Some thin-sliced Chanticleer today:

…perhaps the best supporting evidence for Scott’s big Coles spin-off comes when you examine the returns on capital each division of this conglomerate is producing.

At Bunnings, which will officially be crowned the flagship of the Wesfarmers fleet after the Coles demerger, return on capital was a staggering 49.4 per cent, up from 41.8 per cent.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.