Last week the share price of leading supermarket retailer Woolworths Limited (ASX: WOW) declined 1.5%.

The sell-off has continued into this week with the share price currently trading around the $20.80 level which is within a whisker of the 52-week low price of $20.50.

With Woolworths shares back trading at these multi-year low levels it is surely time that long-term investors spent some time analysing whether this stock is now in the buy zone…

In fact, it’s exactly because many investors appear to have given up on Woolworths that makes now quite possibly the right time to take a closer look!

As Warren Buffett has famously quipped:

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Historically, investors have generally viewed Woolworths as a high quality business, with market leading dominance and operating with significant economies of scale.

What investors need to determine now is whether this view is still valid.

In other words, does Woolworths still possess above average business quality and positive prospects; or has the competitive landscape changed forever and is the group destined for a sub-par future?

If it’s the latter, then the current beaten-down share price could well be warranted and investors could rightly benefit from the hindsight Buffett attained from his disastrous investment in UK-based supermarket operator Tesco.

If it’s the former situation however, then with a forecast price-to-earnings ratio of approximately 16x, Woolworths could currently be sitting in the buy zone.

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Motley Fool contributor Tim McArthur has no position in any 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 Bruce Jackson.