Why the Wesfarmers (ASX:WES) share price just hit a new all-time high

The conglomerate reached a new high of $59.68 during today’s trading session.

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The Wesfarmers Ltd (ASX: WES) share price is reaching new heights despite a disappointing day for the entire market.

At the time of writing, shares in the retail conglomerate are trading for $59.64 – up 0.88%. Earlier, shares reached an intraday high of $59.68. That’s an all-time record for the company. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.87% lower today.

While the company hasn’t made any market announcements today, it has been in the news over the past few days. Let’s take a closer look.

Recent market news

On Friday, Wesfarmers took another step in diversifying its already diversified business when its Mt Hollard lithium project in Western Australia received ministerial approval.

Wesfarmers looks intent on cashing in on the lithium boom. The commodity’s price has been surging as demand for the metal increases along with the demand for electric vehicles.

Managing Director Rob Scott said at the time:

The development of the Mt Holland lithium project presents an attractive investment for Wesfarmers shareholders. The project capitalises on our Chemicals, Energy and Fertilisers divisions’ chemical processing expertise and Western Australia’s unique position to support growing global demand for electric vehicle battery materials which will make a crucial contribution to global efforts to reduce greenhouse gas emissions.

The news sent the Wesfarmers share price higher on that day too.

Also making the rounds recently was the company’s proposed purchase of Australian Pharmaceutical Industries Ltd (ASX: API).

Wesfarmers made a non-binding, indicative offer to acquire 100% of the Priceline Pharmacy owner for $1.38 cash per share. As Motley Fool previously reported, the offer represented a premium of 21% on its last traded price before news of the takeover bid.

Rob Scott said of the decision to invest in the retail chemist owner:

The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long term.

How about lockdowns?

In this day and age, the COVID-19 pandemic and its effects on companies is often worth a mention.

Australia’s 2 largest cities, Sydney and Melbourne, are both in lockdown to prevent the spread of the highly infectious Delta variant of the virus.

Historically, consumer staple and retail shares have done well during lockdown. The theory is stay-at-home order limits people’s options on what they can spend their money on.

Companies that are allowed to stay open and/or can provide pick-up and takeaway services, such as Wesfarmers retail division, Domino’s Pizza Enterprises Ltd (ASX: DMP), and Metcash Limited (ASX: MTS) tend to do well in such an environment.

The Wesfarmers share price, as well as Domino’s and Metcash, are all in the green today despite the general market downturn.

Wesfarmers share price snapshot

Over the past 12 months, the Wesfarmers share price has increased around 28%. Year-to-date, the company’s value has risen 18%.

Wesfarmers has a market capitalisation of $67 billion.

Should you invest $1,000 in Wesfarmers right now?

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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