Time to Buy the “3 Ugly Sisters”?

Yesterday was very interesting for the Supermarket sector. The Australian ran an article focused on the German powerhouse, Lidl about to enter the Australian grocery battle. This increased competition is clearly going to pressure the margins/profitability of both WOW and WES. Lidl has a similar business model to Aldi, with predictions now being made that these aggressive discounters will get ~20% of the Australian grocery market. However what I found interesting was on the same day, the AFR on-line led with a piece by a prominent Value Asset Manager that WOW was in its favourite 5 stocks to accumulate at current levels ~$27. However, on the same day, another prominent value investor, basically noting that "looking long term, the fundamental case against Woolworths, Coles and IGA continues to strengthen”. Hence, what do we think at Market Matters? Please see full report on our supermarket sector - MTS, WES, WOW and our view. (VIEW LINK)