The Wesfarmers Ltd (ASX: WES) share price has been caught up in the selloff on Thursday and is dropping notably lower.

At the time of writing the conglomerate’s shares are down 3.5% to $42.30.

Is the Wesfarmers share price in the buy zone?

I think this pullback could be a buying opportunity for investors looking for strong blue chip shares to buy for the long term.

Thanks to its collection of quality businesses such as Bunnings, Kmart, and Officeworks, I believe Wesfarmers is well-positioned to achieve solid earnings and dividend growth over the next decade.

Another positive is the hefty cash balance the company is sitting on following the sale of part of its stake in supermarket giant Coles Group Ltd (ASX: COL). I expect these funds to be used to make earnings accretive acquisitions in the near future.

Overall, I think this puts the Wesfarmers share price is in the buy zone right now. Though, not everyone is as positive on the company as I am.

A note out of Goldman Sachs this week reveals that its analysts have placed a neutral rating and $42.50 price target on the company’s shares.

Why is Goldman lukewarm on Wesfarmers?

The broker explained that its neutral rating is due to valuation reasons.

Using a sum of the parts and discounted cash flow valuation model, it sees $42.50 as fair value for its shares. This means there is limited upside for investors over the next 12 months, even if you include dividends.

Though, it does see a number upside risks that could lead to a positive revision to its valuation. These include improvements in consumer sentiment around discretionary purchases, a faster turnaround of the struggling Target business, value accretive acquisitions, capital management, and favourable rental negotiations.

However, until these potential factors become a reality, Goldman is sticking with its neutral rating.

Instead, it prefers Harvey Norman Holdings Limited (ASX: HVN) in the retail sector. This morning it put a buy rating and $4.05 price target on its shares.

More reading

• Why I think Wesfarmers is the best ASX blue chip
• Leading brokers name 3 ASX 200 shares to sell today
• ASX 200 jumps 2.4%, unloved shares keep rising
• Not keen on Westpac? Then buy these top ASX dividend shares instead
• Can the Wesfarmers share price continue to rise after its market update today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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 Is the Wesfarmers share price good value? appeared first on Motley Fool Australia.

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It is an important practice to properly review your stock investment portfolio on a regular basis and ask yourself questions like: “Why do I own shares of Monadelphous Limited (ASX: MND) at its current share price?” For me, this is just before the end of the financial year because it helps me with my tax planning. I would recommend doing something similar annually, bi-annually or every quarter when results are announced.

During this year’s review, I found myself asking the question: “Do I still want ‘in’ at the current Monadelphous share price?” This is a very personal question so it is important to define who I am as an investor and my investment strategy.

My share investor profile

• Demographic: Generation Y
• Investment time horizon: 50 years +
• Investing experience: High
• Risk tolerance: Very high
• End goals: Join the Financial Independence Retire Early (FIRE) movement and go travelling. Pass on a legacy to my kids.

My share investment strategy

Because I have so long to invest and minimal financial commitments, I am able to be an ultra long-term, aggressive growth investor. My strategy is to build a highly diversified portfolio of quality growth companies with a lot of risk yet massive multi-bagger potential. I invest funds into the market on a monthly basis (or as close to as possible).

So, at the current Monadelphous share price, should I keep owning shares?

Monadelphous is a share that I bought at the start of my investing career. At the time there was an increase in capital expenditure in the materials sector and Monadelphous was benefitting as a result. My investment was also benefiting with a gain of up to 28% (excluding a healthy dividend) within a few years. Unfortunately, that all changed and I’m currently sitting on an annualised total return of about half of what the S&P/ASX 200 Index (ASX: XJO) has achieved. The Monadelphous share price is $12.70 at the time of writing.

In general, I’m not a massive fan of the resources sector because there is no real pricing power. Often the lowest cost producer wins, but there is still direct commodity price risk. But, because I was so keen on diversifying at the time, I felt I needed some exposure to the sector. Monadelphous seemed like a great shot because not only was it exposed to capital expenditure during boom times, but it had a strong and growing maintenance business to soften the cyclical nature of the industry.

With many more years of investing under my belt, I now have a very diversified portfolio. Further, I know that so long as I am comfortable with my sector allocations I don’t need to be invested into everything out there. Monadelphous like Challenger Ltd (ASX: CGF) doesn’t fully align with my investment strategy, so I have to ask myself if I should hold or sell. Right now, I’m not sure.

Foolish bottom line

Writing your investing reasons down is extremely important. It allows you to understand what you were thinking at the time, without any hindsight bias. This makes it a powerful tool for making buy or sell decisions with your shares. Additionally, it provides a great resource for educating yourself as an investor. 

Investment strategies and goals will change so a point of reference is crucial. Invest based on your own personal circumstances and goals at that point in time.

More reading

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• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth

Motley Fool contributor Lloyd Prout owns shares of Monadelphous Limited and expresses his own opinions. The Motley Fool Australia owns shares of and has recommended Challenger 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 Should I keep my stake at the current Monadelphous share price? appeared first on Motley Fool Australia.

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The Beston Global Food Company Ltd (ASX: BFC) share price is flying higher today after the company announced the sale of its dairy farms in Mount Gambier.

As its name suggests, Beston Global is in the business of food. The company aims to provide natural and verifiably safe food and beverages to global markets.

To achieve this, it owns the raw materials, utilises technology in the production process, and controls distribution.

Beston Global’s range of products focuses on the food groups of dairy and meat.

Why is the Beston Global share price rocketing?

This morning, Beston announced it has signed an agreement to sell its dairy farms in Mount Gambier to Aurora Dairies for $40.4 million cash.

Under the terms of the agreement, Beston will receive all milk from the farms, which is currently around 17 million litres per annum, over a 10-year period. It also has the option to extend this period.

The sale process for the farms was conducted through an international open tender process which commenced at the beginning of this year.

Beston highlighted that the proposed transaction achieves its strategic objective of releasing capital for re-investment in higher returning dairy factory assets, while securing long-term milk supply from the farms.

Proceeds from the sale will be used to reduce balance sheet gearing to around 10% and fund the company’s mozzarella and lactoferrin production expansion.

The transaction is subject to approval from the Foreign Investment Review Board and other usual conditions. Subject to the relevant approvals and conditions being satisfied, Beston expects to complete the transaction by 30 September 2020.

Management commentary

In today’s announcement, chief executive Jonathan Hicks noted that the demand for the company’s mozzarella products has been steadily increasing. This is despite the closure of restaurants and other food service outlets during the COVID-19 lockdown period.

And in regard to the update, Mr Hicks said:

“The sale of the farms, the securing of milk supply and the positioning of the business to focus on Beston’s strategic growth initiatives comes at a good time for the business as we work through the other side of the restrictions brought on by COVID-19.”

At the time of writing, the Beston Global share price has rocketed 40% higher to 7.7 cents. This takes the company’s current market capitalisation to around $36 million.

More reading

• Is the Wesfarmers share price good value?
• Should I keep my stake at the current Monadelphous share price?
• All Technology Index sees stunning comeback
• Top brokers name 3 ASX 200 shares to buy today
• Is the Scentre share price cheap today?

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Beston Global share price rockets 40% on sale of dairy farms appeared first on Motley Fool Australia.

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