Alan Gray has a long history of buying and selling Woolworths Holdings Limited (WHL). In the early 2000s our clients owned about 30% of the company. At the time, earnings were low and investors were only willing to pay about 10 times these depressed earnings. We were buyers, believing WHL had a strong position in the SA retail market, which management could leverage to improve WHL’s economics.

As the stock approached our estimate of its fair value, we began selling, and sold we out completely in 2006. And so it remained for the next decade, until the opportunity presented itself again...

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