Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) shares have been outperforming in 2020.
While the S&P/ASX 200 Index (ASX: XJO) is down 11.7% this year, Coles and Woolworths shares have climbed 13.1% and 0.6%, respectively.
There are fears over a second coronavirus wave right now, particularly in Victoria. We saw ASX supermarket shares rocket higher earlier in the year, so will this time be any different?
Will ASX supermarket shares soar again?
I’m of the opinion that we won’t see the same share price surges that we saw in February.
For one, I just don’t think there will be the same level of panic buying this time around. While both Coles and Woolworths have introduced new buying restrictions, there are more options available to Aussies right now.
Restaurants and cafes are starting to re-open, which means more people can eat out now compared to March. That could mean that supermarket sales don’t reach the same heights but Coles and Woolworths shares could still climb higher.
What’s good about Coles and Woolworths shares?
While I don’t think we’ll see more surges, we could still see the Aussie supermarket shares finish the year strongly.
A recent SCA Property Group (ASX: SCP) trading update suggested strong turnover from its supermarket tenants up to 31 May 2020. That could be good news for Coles and Woolworths shares in the short to medium-term.
On top of that, Woolworths is working on some impressive automation projects with Qube Holdings Ltd (ASX: QUB). The new automated logistics centre could be a game-changer for operational efficiency for the supermarket giant.
Foolish takeaway
While panic buying may not return in 2020, that doesn’t mean supermarket shares won’t be worth buying.
If we see more share market volatility, the relatively steady earnings for the Aussie supermarkets could make Coles and Woolworths shares welcome portfolio additions.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- Tassal and 2 more ASX 200 shares to watch this week
- ASX 200 Weekly Wrap: ASX retreats as confidence wanes
- Why Fortescue and these ASX dividend shares could be top income options
- 3 ASX shares to own for the next 10 years
- Top brokers name 3 ASX shares to sell next week
Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Shopping Centres Australasia Property Group, and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Are Coles and Woolworths shares back in the buy zone? appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3dLsash
Leave a Reply