any stock trading on a PE above 20x in this market is an accident waiting to happen. Buffet would never pay 20x for a stock, he buys things when they are cheap not expensive.
when the smart fundies out there realise that WOW wont have such high growth anymore it will get hammered like there is no tomorrow.
strategy would be to sell all WOW stock, then buy some deep out of the money puts that exercise in a year or two and buy some long dated calls on WES, use the cash and invest into a high yield cash account and just wait for the market to adjust.
WOW is an overhyped stock that people are paying big multiples for because they say people have to eat, well people also shop at Coles and WES is trading on a yeild of 10% plus now on a PE below 10x.
i say short WOW and go long WES.
buffet style stock, page-4
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Last
$29.31 |
Change
-0.260(0.88%) |
Mkt cap ! $35.80B | |||
| Open | High | Low | Value | Volume |
| $29.42 | $29.50 | $29.19 | $60.49M | 2.064M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 3142 | $29.31 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $29.33 | 750 | 1 |
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| Last trade - 16.10pm 13/11/2024 (20 minute delay) ? |
| WOW (ASX) Chart |