There's some nice clouds overhead, so might as well shout at some of them...

Look, Woolies is a wonderful business. There's not much to dislike...except the price. As with CBA and other "blue chips", it's just beyond anything sensible. It's a global phenomenon, and probably something to do with ETF flows, or just TINA (there is no alternative), or maybe just the expected outcome of all this monetary inflation.. i dunno

But let's take a look at things: the business' revenue is essentially flat in real teams. And all these inflationary pressures (wages in particular) have taken a knife to earnings -- you have to wonder how much of that can be recovered through efficiency gains. I suspect, despite the political pressure, they'll simply have to increase prices at some point. They always take a beating from the media on that front, but (at least in this latest half) they certainly haven't been "gouging" customers. Quite the opposite.

They told the market that things are expected to stay tough for the foreseeable future, and they still trade at 22x forward earnings. I think they did well to only see a 3% drop in the share price today.

With franking, the divs are ok, but the total shareholder return will struggle to be beyond 6-7%pa in the next few years -- unless somehow the market multiple expands even more.

Anyway, seems excessive. But maybe low return but low risk isn't a terrible proposition for many.

Also, the results really do point to the struggles many Australians are having with so-called 'cost of living' pressures. Smaller baskets, more cross-shopping at other supermarkets, more focus on store branded goods, less discretionary items -- tells you all you need to know about the state of household budgets.

Anyway, I'd be an enthusiastic buyer at $20. But not interested at $30