A good opportunity to buy Westfield

The company’s shares are trading at a discount with the Australian dollar.

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Westfield Group (ASX: WDC) is trading at a 1.3% discount today when compared to Friday’s closing price, with the market now anticipating that the Reserve Bank’s string of interest rate cuts may be well and truly over.

Since the RBA’s decision to cut interest rates to a record low of 2.5%, the Australian dollar has strengthened slightly, which will affect a number of companies’ overseas earnings. While Westfield maintains a number of overseas operations, a higher Australian dollar would reduce profitability in a number of stores – particularly those located in the US.

The retail sector did receive a boost of confidence this morning however, when electronics retailer JB Hi-Fi (ASX: JBH) produced a strong report which revealed that the company’s sales had grown 5.8% for the financial year ending June 2013. The company also provided sales guidance for 2014, which it expects to grow by between 6% and 8%.

Whilst strong sales is good news for Westfield as a shopping centre operator, the part of JB Hi-Fi’s report that does not fare so well for the company was its online sales growth, which it expects will continue to grow in years to come.

Foolish takeaway

The dip in the company’s share price provides investors with a good opportunity to buy into the company. It is currently trading for $11.07 per share with a 4.6% yield.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

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