The stock rallied 2.16 per cent to $31.75 after Thursday's AGM, the first "up" day for the stock since Friday, when it closed at $31.60.

Crispin Murray, head of equities at BT Investment Management, told a presentation to advisers that Woolworths was "a stock to avoid", news service Livewire reported on Thursday.

Woolworths was capital intensive with deteriorating cash flows, said Mr Murray, and suffering increased competition from Coles and Aldi.

"As a result of that they are actually no longer covering their dividend with cash flow," he said. "They are having to borrow to meet their dividend at the moment." In addition, concerns around declining EBIT margins were starting to undermine the earnings certainty and predictability that investors expected from the stock.

Out of 18 analysts polled by Bloomberg, six have a "buy" rating on the stock, four a "hold" and eight a "sell".

Deutsche Bank analyst Michael Simotas told Fairfax Media he stood by the buy recommendation issued on November 3, before the drop in the company's share price. In the buy note, Mr Simotas stated that Woolworths "has underestimated the degree of promotion required to maintain its value perception with consumers, particularly in dry grocery. This has driven two consecutive weak quarters but in our view is an addressable issue".

While "improvement may take some time", said the note, there was no "evidence of a structural deficiency within the business ... the broader food and liquor market dynamics are sound and Woolworths recent step up in dry grocery promotion should help its sales improve".

Although Bloomberg lists Morningstar's recommendation as a "buy", analyst Tim Montague-Jones said that, technically speaking, it was an "accumulate" – between "hold" and "buy".

"We've had a hold on it for a very long time but the recent share price decline has triggered it into our "accumulate" zone. If the share price continued to fall, it would go into our buy zone," he said.

"Our valuation implies that we see value in the business. We see value in the stock. We see some opportunity for the share price to go up but not a significant opportunity. We're looking at maybe a 5 or 6 per cent rise from here."

However, Mr Montague-Jones said Morningstar continued to debate the merits of Woolworths. "We're still doing quite a lot of work on it ... we continue to debate it internally although we don't plan to make any significant changes to our long-term value estimate."

No analysts or fund managers could specify who had been primarily responsible for selling off the stock during the past two weeks. Vanguard Group, the company's biggest shareholder with 15.8 million shares – 1.26 per cent of the total – declined to comment.

Other large shareholders include Norges Bank Investment Management (12.4 million shares), Blackrock Fund Advisors (12.3 million), Aberdeen Asset Management (10.7 million), and Colonial First State(8.8 million).