‘Safe haven’: Why this broker backs Woolworths shares amid recent turbulence

The company’s sector has been a strong performer in 2022.

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Key points

  • Woolworths shares could be worth looking at, according to BW Equities' Tom Bleakly 
  • Bleakly recently labelled the stock a 'buy' on the back of its strong quarterly results
  • Additionally, the expert said the company's home sector has been a 'safe haven' in recent market turbulence 

Woolworths Group Ltd (ASX: WOW) shares are outperforming the broader market in 2022, and they’re well-positioned to continue their trajectory, according to one expert.

BW Equities’ Tom Bleakly recently labelled the supermarket giant’s stock a ‘buy’ saying it (and its peers) have managed to shake off recent disruptions.

At the closing bell yesterday, the Woolworths share price was up 1.16% at $37.64. That’s 2.3% lower than it was at the start of the year.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has slumped 7% so far this year.

So, what is it that the expert thinks Woolworths shares have going for them? Let’s take a look.

Here’s why this expert is backing Woolworths shares

Woolworths has faced numerous challenges this year, but its shares are still worth looking at, according to Bleakly.

He recently told The Bull he was impressed by the company’s recent earnings. Particularly, considering the notable supply chain issues it’s been facing.

Of course, the 13 weeks to 3 April saw major flood events in Australia as well as the worst of the Omicron outbreak.

That saw absenteeism surge in the company’s fulfilment centres, as well as the closure of stores and lesser product availability.

Still, Woolworths reported more than $15 billion of group sales for the period. That was a 9.7% increase on those of the prior comparable quarter.

Additionally, Bleaky believes the stock is in the right spot to ward off recent market turbulence.

The ASX 200 has been on a rollercoaster the last few weeks, seemingly spurred by Australia’s inflation rate hitting 5.1% in late April, followed by the nation’s first rate rise in 11 years in early March.

Bleaky commented that Woolworths’ home sector has been a “safe haven” in the turbulence.

Indeed, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) has fallen just 1.6% since the start of this year, besting the performance of the Woolworths share price.

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

Before you consider Woolworths, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Woolworths wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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