Wesfarmers (Wesfarmers) GF Value Rank : 7 (As of May. 04, 2024)

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What is Wesfarmers GF Value Rank?

Wesfarmers has the GF Value Rank of 7.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Wesfarmers's GF Value Rank

For the Home Improvement Retail subindustry, Wesfarmers's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Wesfarmers's GF Value Rank Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, Wesfarmers's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Wesfarmers's GF Value Rank falls into.

Wesfarmers GF Value Rank Related Terms

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Wesfarmers (Wesfarmers) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Wesfarmers Ltd (OTCPK:WFAFF) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

WFAFY:USA WF3:Germany WES:Australia

Address

123 St Georges Terrace, Level 14, Brookfield Place Tower 2, Perth, WA, AUS, 6000

Website

https://www.wesfarmers.com.au

Wesfarmers is Australia's largest conglomerate. Its retail operations include the Bunnings hardware chain (number one in market share), discount department stores Kmart and Target (number one and three) and Officeworks in office supplies (number one). These activities account for the vast majority of group earnings before taxes. Other operations include chemicals, fertilisers, industrial and medical gases, LPG production and distribution, and industrial and safety supplies. Management is focused on generating cash and creating shareholder wealth in the long term.

Wesfarmers (Wesfarmers) Headlines

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