Tesco Share Discussion Threads

[diku] 19/5/2016 08:47

Looking at that right header chart a perfect mountain reversal would retest 140p again sometime next month...No Advice Intended..

[portside1] 19/5/2016 08:44

and paying out millions in bonuses for failing . who is Tesco run for .
why are millions being paid out and share price down from 480p now 161p .
their should be no bonuses paid till div restored and profits up
this company is acting in reverse,

[nathdani] 17/5/2016 14:03

Tesco were already paying more than the new minimum wage before april .

[ladeside] 17/5/2016 12:51

The "living wage" issue has already been dealt with. Renegotiation of contracts, premium overtime rates cut, shift allowances removed but base salary increased. No hit is / has been taken.

[loganair] 17/5/2016 12:22

According to City broker JPMorgan Cazenove, Tesco’s figures for 2015 were flattered by the fact that the group paid no corporation tax for the year, and one-off items such as the sale of Blinkbox, Tesco’s lossmaking video service, and a reclassification of ATM income from the bank to the retail division. Moreover, despite Tesco’s drive to cut costs JPMorgan believes that the introduction of the UK’s new living wage (along with other factors) will push Tesco’s operating costs higher by £200m per annum in the years ahead. Higher costs going forward could floor Tesco’s recovery especially when it’s widely believed that supermarkets are about to embark on yet another price war.

And there are concerns that Tesco’s figures could begin to deteriorate again this year.

Craig Yearman, manager of the Saracen UK Growth fund says his criteria around finding companies that have sustainable margins has also led him to shun Tesco. He remarked, ‘When Tesco was the largest supermarket in the UK, its margins were 4 per cent. Then it became 1 per cent and now it is probably near to break even. The headwinds on Tesco shares are intense, and obvious, the competition is strong, and while the company has a large land bank. The problem is that the country doesn’t need any more supermarkets, not of the big superstore variety. Our view as investors is that cash is king, the more cash you have as a company, the more you can invest for growth, and the supermarkets don’t throw off a lot of cash.’

[james smith] 16/5/2016 21:13

175p is it's natural price until there is some useful news and that is probably years away.

[molatovkid] 16/5/2016 18:44

Agreed....looking good....

[james smith] 16/5/2016 18:19

Yep, on the way up to 175p.

[staffy dog] 16/5/2016 12:10

enjoy the ride upwarts

[capeview] 16/5/2016 09:00

It was up big time on Friday after it dropped to 1.54, so hopefully on its way back up to a nice figure.

[chinese investor] 16/5/2016 08:50

Good Start !

[loganair] 14/5/2016 11:58

By Alan Oscroft - It seems like people have been calling the bottom for Tesco for a couple of years now, declaring that the worst is over and that things are on the up again. There was a bit of a surge at the start of 2015, after a Christmas trading update seemed better than expected, but that soon tailed off and Tesco shares lost ground that year.

Something similar happened at the start of this year. But after full-year results were released in April, the share price turned south again -- to 156p. Tesco shares are still up 12% since the start of 2016, but it's looking like it could be 2015 all over again.

Looking back at the past year, forecasts for Tesco have been steadily scaled back too, as time after time the signs that it's returning to its old winning ways keep fading away. The latest disappointment has come from JPMorgan Cazenove, which has warned that a number of one-offs are flattering Tesco's financial appearance, and in the past week we've seen earnings forecasts scaled back again.

Price wars:

That leads me to the one thing that you really need to know before you consider buying Tesco -- it hasn't beaten the low-price competition threat from Lidl and Aldi, not by a long way. No amount of store revamps and "customer experience" improvement is going to change that.

Tesco should see costs rising this year, after a year of unsustainably low capital expenditure and with a return to a more normal tax regime due. And to add to those woes, the latest Kantar Worldpanel report revealed a sales fall of 1.3% in the three months to 24 April 24, while Aldi and Lidl continue with their relentless growth.

After several years of rapidly declining earnings per share, analysts are forecasting a rise of around 150% by the time the current year ends in February 2017. But to put that into context, EPS would still be less than a fifth of the levels it stood at in 2012. And even at such modest earnings, Tesco shares would still be on a forward P/E of over 23, which seems way too high to me, especially with its current uncertainty and risk.

The harsh reality is that we're going to continue to see further price deflation, after Kantar also told us that groceries prices have now fallen every month since September 2014 -- and all indications suggest even the big four are ready for further price wars, with Asda set to try to regain its lost volume via aggressive price-slashing. That strongly suggests we'll be seeing further forecast downgrades for Tesco over the course of the next 12 months too, and I place little confidence in current predictions.

No going back:

Many observers seem to have seen Tesco as just having had a rough patch, like almost all companies at some time in their lives, and have assumed it will put things right and recover to its good old ways.

The problem is that thinking can miss the fact that there's been a permanent change. It needed an assault from Lidl and Aldi to break the complacency of our big four, and we won't be going back to the high-margin retailing that Tesco used to enjoy.

Tesco will surely get back to earnings growth, but I can see it as being at a significantly lower level than before -- and at a significantly lower share price too.

[loganair] 14/5/2016 11:23

It is not always easy to do a price comparison. I popped into my local Sainsburys, Iceland then Poundland to look at a particular pack of cereal only to see that each store had a different size with both Iceland and Poundland having the size they sold made just for them.

Weight for weight Poundland was by far the most expensive with only pennies different between Iceland and Sainsbury. On the whole I find per unit Poundland is often the most expensive. In my view it seems to me by far the most expensive is the Coop, as for Aldi and Lidl it is often difficult to compare as they often sell makes that many have never even heard of and in my experience are of very low and poor quality.

It is clever of Sainsbury´s to use their own Sainsbury´s bank for a loan when taking over Home Retail (Argos) as any interest they pay, they are paying to themselves.

[andrewbaker] 13/5/2016 18:12

Tesco dropped under 200p. in September 2014, having not been there since 2003, when it increased by 250% over the next four years.

Given it is in recovery, the likelihood is that when it gets back over 200p. again, it will have a speedy ride north on increased profits due to bigger profit margins and lower costs, which is what is being worked on right now.

I'm happy to buy and add under 200p. for the comparatively short time that it will be there (and for seven months in 2015 it was above 200p) compared to the many years going forward when it will higher. In short, it is a bargain share right now, and informed, patient and knowledgeable investors who work on fact, not fiction or make-believe, will do well buying or adding at this level.

[vaneric] 13/5/2016 16:58

Well you're all capitalists here tenapin or you wouldn't be in the market.

[tenapen] 13/5/2016 15:54

Rich getting Richer,

Poor getting Poorer,

Capitalism works !

[ladeside] 13/5/2016 15:50

It's not a dictatorship stoaty. As we can see from the Accounts there are many Executive board members and Directors and department Heads who are also extremely well paid. To make out Lewis or any other charlatan CEO is WORTH multi millions is really unbelievable.

I often wonder how all those successful multi nationals managed before the last 15 - 20 years when the remuneration packages suddenly shot thousands of percent above everyone else's salaries ??

Listening to some people you would have thought every company would have gone out the game without someone at the "helm" earning multi millions..........

[stoaty1] 13/5/2016 15:12

portside, he is running a huge company, and assuming he continues to improve Tesco's fortunes, he is worth every penny. I think you need to remove the green man(men?) from your shoulder, as well as the chip mountains!

[harvester] 13/5/2016 14:46

Careful:You have mentioned BHS !!! Lol

[stoaty1] 13/5/2016 14:45

Tesco's is loosing market share because of competition, but also because it is closing unprofitable stores. This is part of the recovery process that is much needed. If they loose more market share, and the t/o sinks to £45-£50 billion, but is more profitable, shareholders will be elated!