Bill D'arblay Posted December 10, 2014 Share Posted December 10, 2014 A buyout by Carrefour/Auchan and debt write down would be a good result for all involved (except for the banks). Unfortunately this hasn't meant that UK Aldi and Lidl prices are any where as low as in Germany. Tesco smacks of typical UK mismanagement How can this be? They spend tens of millions, top 'market' rates for criminal management 'talent'. Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted December 10, 2014 Share Posted December 10, 2014 My Tesco shares are worth 44% of what I bought them for. That's what I call BOGOF! Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 10, 2014 Share Posted December 10, 2014 Yes, could fall further but wouldn't you want to dip your toe, on a 5 year view? And add to on further slump? Remember there will be divs even if reduced. Quote Link to comment Share on other sites More sharing options...
Exiled Canadian Posted December 10, 2014 Share Posted December 10, 2014 "The second nasty surprise is hidden off the balance sheet. During the boom years the company supported big dividend payments through selling off bits of its store portfolio, through something called a sale and leaseback, where the building is sold and rented back. Tesco had £15.9bn in operating lease commitments as of last February." This looks like it could all be very nasty - high operational gearing while attracting a smaller share of a declining market plus high financial gearing resulting from years of financial engineering to support a roll out into marginal locations and dividend payments. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted December 10, 2014 Share Posted December 10, 2014 Yes, could fall further but wouldn't you want to dip your toe, on a 5 year view? And add to on further slump? Remember there will be divs even if reduced.Plenty of divs still piling in at the current share price. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 10, 2014 Share Posted December 10, 2014 Good for them Quote Link to comment Share on other sites More sharing options...
iamdamosuzuki Posted December 10, 2014 Share Posted December 10, 2014 Yes, could fall further but wouldn't you want to dip your toe, on a 5 year view? And add to on further slump? Remember there will be divs even if reduced. Falling Knife? No chance. Divs surely won't cover much even on a five year view, and any solution to their woes is currently guesswork. Reminds me of Scottish football, with Tesco being Rangers (overstretched in the boom years, no one likes them they don't care). I'm out. Quote Link to comment Share on other sites More sharing options...
macbeth79 Posted December 10, 2014 Share Posted December 10, 2014 My Tesco shares are worth 44% of what I bought them for. That's what I call BOGOF! I remember you also saying you were impressed with Morrisons how are they doing ? Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted December 10, 2014 Share Posted December 10, 2014 Not me, I think. Quote Link to comment Share on other sites More sharing options...
200p Posted December 10, 2014 Share Posted December 10, 2014 I would still wait for a 1 or 2 year high weekly close on TSCO and ensure a sister stock shows a similar type of action, before looking at investing. The road to recovery is long, for these companies. Quote Link to comment Share on other sites More sharing options...
200p Posted December 10, 2014 Share Posted December 10, 2014 (edited) And make sure they dust off the ice from the unsold expensive icecream, like I said further up this thread, before the big drop in share price. Or better still, get rid of the slow moving lines. Edited December 10, 2014 by 200p Quote Link to comment Share on other sites More sharing options...
Venger Posted December 10, 2014 Share Posted December 10, 2014 Yes they said the same of M&S. No way on Earth TESCO going to the wall. Smaller and more agile, sure. Cheap at these levels. Can of course go more cheap but doesn'tstop being cheap now. If £5m PCL went to £2m it would still be ridiculous but it would be cheap. Gave that 24 hours to think over, and I disagree; cheap. Although you didn't set out whether it was someone who previously bought it at £5m, or just 'peak value'. Here's a £5m 'valued' house, which sold for £2m (outside London). I don't particularly think buyer got a bargain; maybe there is a plot to the side to build new house though. And you're the one (rightly I think) suggesting Russians should be selling PCL now. If a few £5m houses went to £2m, then that would bring down value of many similar houses locally, so they would all be 'cheap'. Russian buyers from here in PCL? Only needs a slide in other financial markets to find out how valuable money actually is vs house prices. They shld be liquidating now. No brainer given collapse of Ruble. Tesco today seems to be just above what Ashley/Sports Direct guy did some sort of transaction on (which I don't fully understand). http://www.bbc.co.uk/news/business-29357840 http://otp.investis.com/clients/uk/sports_direct/rns/regulatory-story.aspx?cid=723&newsid=448635 Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 10, 2014 Share Posted December 10, 2014 Yes Russians should sell PCL now and lock in amazing nominal and relative to Ruble gains. Stand by view on 5 yr view on Tesco. Worth 25-50% size buy and hold. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted December 10, 2014 Share Posted December 10, 2014 Tesco blowing up during the run up to the election would be classic comedy gold. Quote Link to comment Share on other sites More sharing options...
canbuywontbuy Posted December 10, 2014 Share Posted December 10, 2014 Is it worth buying shares in any of the "middle ground" supermarkets when people have less to spend, and absolutely bugger-all hope of some kind of true demand-driven, wages-increasing-faster-than-inflation recovery? This time next year, Aldi will have more stores open, more market share - expect more profit warnings from Tesco - not just from internal problems - but external problems their target market are facing. Quote Link to comment Share on other sites More sharing options...
Venger Posted December 10, 2014 Share Posted December 10, 2014 Yes Russians should sell PCL now and lock in amazing nominal and relative to Ruble gains. Stand by view on 5 yr view on Tesco. Worth 25-50% size buy and hold. Well I don't know enough about Tesco to make such a decision, either way. I see a lot of competition, and consumers watching their spending, or being forced to. Low margin high volume, is not my sort of business, even in good times. I do not know enough (nor feel confident in trying to navigate to find out) about their operations and balance sheet, and holdings... which might include a lot of land suitable for housing). Necessities May Not be Profitable Surprisingly, luxury goods do better in a depression than basic necessities. This requires some explaining. You might expect that luxury sales would fall away and only necessities would be purchased during a slump. But this is only half-true. The majority whose spending power has fallen will spend the little money they have on necessities. That does not mean the people who sell those necessities are going to make much of a profit. It makes no difference whether the industry makes a product that is "essential." Bread is an essential, but baking has often been less profitable than selling diamonds, which are not necessities. -Davidson. When demand falls as it does in a depression, competition for the remaining customers is abnormally intense. This was especially true in the thirties in fields enjoying dynamic growth, such as tobacco products, gasoline sales, and better processed foods. When the depression began, for example, gasoline was sold from tankers at railheads. Crankcase oil was scooped from large drums. There was practically no service. Within a few years, this was totally changed. New stations were designed. Service attendants ran to greet each customer. They washed windshields, checked oil-levels, and put air in their customers' tyres. They also offered repair facilities, credit services, "service with a smile" ect. As gasoline retailers sought to outdo one another, they invested large sums in marketing and capital improvements. Oil company advertising costs alone in the mid-thirties amounted to 20 percent of the value of gasoline purchases. In light of this experience, another depression should be viewed as an opportunity to compete. Depressions are periods when brand loyalties in practically any product line are up for grabs. This means that advertising is important for positioning and repositioning products. Companies that trade on identifiable brands will be vulnerable to new competition, especially if they sell cheap products that are technologically easy to produce. Coca-Cola's lock on the cola market, for example, was challenged in the depression by Pepsi, which originally was a low-cost competitor. This is a matter to bear in mind when reviewing your portfolio. Companies with big names but weak balance sheets, may not survive. Brands that do not go hand-in-hand with superior products will not be worth premium prices. -Davidson. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 11, 2014 Share Posted December 11, 2014 Well I don't know enough about Tesco to make such a decision, either way. I see a lot of competition, and consumers watching their spending, or being forced to. Low margin high volume, is not my sort of business, even in good times. I do not know enough (nor feel confident in trying to navigate to find out) about their operations and balance sheet, and holdings... which might include a lot of land suitable for housing). Effectively same as they said of M&S. Quote Link to comment Share on other sites More sharing options...
R K Posted December 11, 2014 Share Posted December 11, 2014 Tesco moves closer to junk http://www.bloomberg.com/news/2014-12-10/tesco-moves-closer-to-junk-as-s-p-places-grocer-on-creditwatch.html Tesco Plc (TSCO), the U.K. grocer that’s grappling with fallout from overstated earnings estimates, moved closer to losing its investment-grade credit status as Standard & Poor’s placed it on negative CreditWatch. The new outlook will remain in place while S&P considers “the effect of any management actions to improve the group’s financial risk profile,” according to a statement yesterday from the credit-ratings provider. S&P has a BBB- rating on Cheshunt, England-based Tesco, one level above junk. “We anticipate that Tesco’s profitability will continue to weaken as market competition in the U.K. remains high, possibly even intensifying over the next 12 months, perpetuating the burden on the group’s business risk profile,” S&P said in the statement explaining its action. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted December 11, 2014 Share Posted December 11, 2014 Market cap 14 billion (may have dwindled).....Debt c 9 billion, Pension shortfall c 2.6 billion. Quote Link to comment Share on other sites More sharing options...
rantnrave Posted December 11, 2014 Share Posted December 11, 2014 No 1 highest rates on easy access savings accounts right now... Tesco Bank Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted December 11, 2014 Share Posted December 11, 2014 No 1 highest rates on easy access savings accounts right now... Tesco Bank Well we are not talking Corporate bonds so all fine and dandy so long as it's within the 85k. Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted December 11, 2014 Author Share Posted December 11, 2014 Well I don't know enough about Tesco to make such a decision, either way. I see a lot of competition, and consumers watching their spending, or being forced to. Low margin high volume, is not my sort of business, even in good times. I do not know enough (nor feel confident in trying to navigate to find out) about their operations and balance sheet, and holdings... which might include a lot of land suitable for housing). Venger what's the source on that one?Looks very interesting. Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted December 11, 2014 Share Posted December 11, 2014 A future downgrade could be a bugger as would raise cost of finance which would impact margins. Then there is the competitive environment. Scary stuff. This is not advice. Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted December 11, 2014 Share Posted December 11, 2014 Well we are not talking Corporate bonds so all fine and dandy so long as it's within the 85k. What's the size of the fund that £85K guarantee comes from ? Is it £5 Billion ? I assume it won't last long when the fan gets hit Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted December 11, 2014 Share Posted December 11, 2014 (edited) What's the size of the fund that £85K guarantee comes from ? Is it £5 Billion ? I assume it won't last long when the fan gets hit since all the old fools have piled into btl and savers taxed earning been stolen though the q e. theft the uk banks are probably safe now so this guarantee might only be needed for a small bank collapse. even then...it might be stretched. the old fools are f@@ked though Edited December 11, 2014 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
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