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The share prices of ASX Ltd and Wesfarmers Ltd have recently shown noteworthy movements, with ASX Ltd rising 1.5% since the start of 2024 and Wesfarmers tracking 40.4% above its 52-week lows. Here’s a closer look at what’s influencing these ASX-listed companies and their performance among ASX growth stocks.
ASX Ltd (ASX:ASX)
ASX Ltd, the operator of Australia’s primary national securities exchange, plays a pivotal role in the country’s financial landscape. The company provides a broad range of services, including securities exchange, derivatives exchange, central counterparty clearing, and registry, settlement, and delivery-versus-payment clearing financial products.
ASX Ltd offers access to various financial products, such as shares, futures, exchange-traded funds (ETFs), managed funds, and real estate investment trusts (REITs). By overseeing compliance for listed companies, ASX Ltd promotes high standards of corporate governance and aims to create a fairer playing field for investors.
Currently, ASX Ltd shares have a price-to-sales ratio of 7.90x. This is slightly below its 5-year average of 8.12x, indicating that the shares are trading below their historical average. While this valuation metric provides some insight, it’s important to consider it alongside other factors when assessing the company's performance and potential.
Wesfarmers Ltd (ASX:WES)
Founded in 1914, Wesfarmers Ltd is a major Australian conglomerate headquartered in Perth. Its operations span various sectors, including retail, chemicals, fertilizers, industrial products, and safety solutions across Australia and New Zealand.
Wesfarmers operates somewhat like a publicly listed private equity firm. The company has a history of acquiring businesses, leveraging their cash flow, reinvesting in them, and eventually selling them for a profit. A notable example is Coles Group, which Wesfarmers acquired in 2007 and subsequently spun out in 2018. Today, more than 50% of Wesfarmers’ operating profit comes from Bunnings, the leading hardware and home improvement chain in Australia. Wesfarmers initially invested in Bunnings in 1987 and completed its acquisition in 1994 for $594 million.
Both ASX Ltd and Wesfarmers Ltd present unique investment profiles. ASX Ltd is integral to Australia’s financial markets, and its current share price is below its historical average, which could offer potential insights into its valuation. On the other hand, Wesfarmers continues to thrive through its diverse operations and significant investments, particularly in Bunnings. Each company’s recent performance and strategic positioning make them noteworthy considerations for anyone tracking ASX-listed stocks.
