Tesco Share Discussion Threads

[konradpuss] 06/7/2021 20:10

Westham, now how do you 'spin off' their online grocery business when it is mostly picked in store (and makes almost no money).

Tesco Bank, I wonder how little that is worth.

Dunnhumby, now Dave instructed Goldman Sachs to sell that one for a ton of money - eventually withdrawn.

Freeholds - well you could however circa 30% (in the U.K.) are held in three J.V.'s off balance sheet.

F & F - no stand alone stores. O.K. a store within a store owned by others.

European Business - well something there, not much mind.

It is still within the realms of possibility, a take over or a merger.

[johnwise] 06/7/2021 19:46

Bin the masks, sort out this ludicrous self isolating shambles and then boycott those 'virtue signalling' shops that wont take cash.

[thamestrader] 06/7/2021 12:05

There's been a lot of positive talk around the sector, including Tesco, so i suspect much of the optimism is already in the price. Could return to the 240-246 range I suppose, if only temporarily, but barring something more concrete I can't see any records being broken here.

This is a steady-as-she-goes sideways moving stock with a decent dividend, and one I am happy to hold and perhaps add to when/if it dips into the low 220s, as it does from time to time (although many of these are probably ex-div dips).

[westham2017] 06/7/2021 11:59

Hmmm... What would a Private Equity firm do with Tesco....?
Spin off the online grocery business (Ocado market cap is £15 bln).
Spin off Tesco Bank.
Spin off Dunnhumby.
Spin off remaining freehold properties.
Spin off F&F.
Sell off European Business.
Would still be left with business generating £1 bln+ free cash flow.

[freedomfighter1] 06/7/2021 10:42

Where do we see this going over the next couple of weeks.With no real news that we are linked with any takeover talks are we just going along with the ride as people may see the real value here compared to our peers.

[philanderer] 06/7/2021 10:42

Read across from SBRY today as it increased its guidance for annual profit.

[bountyhunter] 05/7/2021 16:40

nice chart today going up in a straight line, hoping for a continuation for a while yet as the market cottons on with the bidding war for Morrisons look set to continue :)

[bountyhunter] 05/7/2021 16:39

My thinking entirely re the rerating and being underpinned by the yield, got to be better than 0.3% in a savings account!

[ste1984] 05/7/2021 16:38

Completely agree. I got in about a week ago and happy to hang around.

[pinemartin9] 05/7/2021 16:13

Good time for people to buy into Tesco. Good price, dividends etc. Possibility of a rerating in the sector due to bid interest. Happy to hold here long term.

[bountyhunter] 05/7/2021 12:44

Exactly careful/Trev, Tesco may seem big to us in the UK but Amazon is global and they clearly do want to expand further into groceries so Tesco would be about the right size for them. I'm not sure that it would be allowed but I thought that about some of the utilities which are now in foreign hands! And not quite the same as Sainsbury's bidding for Asda where both are already main players in the UK groceries market.

[123trev] 05/7/2021 11:28

But Amazon do want to get into groceries in a big way and the only retailer with the infrastructure and logistics to do this is Tesco not to mention the dominance it would bring and cost savings it’s a logical step I think. If Amazon failed to bid for Morrison’s then their sights are set higher.

[careful] 05/7/2021 11:17

Happy to hold Tesco long term.
it has not been a good investment in recent years.

But at last, it seems that some of that enormous £50bn plus turnover could be turned into profit and cash flow.
The attractions of the supermarket sector does not only apply to Morrison, they are quite small.

As for Amazon looking at Tesco, I would have thought that mighty Amazon would not be interested in smaller operations.
Tesco is the right size for Amazon if it is serious about food retail.

The problem is that Amazon retail is not that profitable, the jewel in their crown is Amazon Web Services.
They seem lukewarm on food retail, struggling to find success with the low margins and huge investment demands.

Their warehouses (sorry, I meant Fulfilment Centres) demand huge investment to achieve the advanced auto systems they use.

Amazon would probably not be allowed to buy Tesco. Tens of thousands of jobs wold be lost.

[chiefbrody] 05/7/2021 09:11

Lol at Amazon and Tesco. Never in a million years.

[bountyhunter] 05/7/2021 08:23

SBRY rather expensive, TSCO remains good value and not too big for e.g. Amazon imv
With a bidding war for Morrison that does only leave SBRY and TSCO as comparable targets in the sector unless you include MKS which includes a much higher proportion of non food retail.

[rumpy pumpy] 03/7/2021 14:50

“ yes however the market is the market “


Indeed so.

[konradpuss] 03/7/2021 14:05

Rumpy, Tesco have less freehold ownership than Morrison (although if you brought in the off balance sheet ownership of stores in the U.K. it would not be far behind Morrisons, so less to sell and lease back to reduce the in price.

It is also a bigger pill for the private equity mob to swallow.

Tesco might remain undervalued for a while if no bid transpires.

To answer, yes however the market is the market.

[rumpy pumpy] 03/7/2021 13:55

Morrison’s has accepted a bid of £6.3 billion (plus assumption of 3.2 bn of debt)

Morrisons is less than a third the size of Tesco, by revenues (and Tesco has less debt pro-rata)

So might Tesco m.cap at £17.4 bn (at Fridays close) suggest a 20-25% undervaluation?

[konradpuss] 02/7/2021 20:10

Gecko, it is not just the government borrowing money.

Society would be much better if banks had to keep say an 80% buffer as a proportion of loans made, rather than the current circa 10%.

It would reduce asset price inflation.

On subject, I still think Dr.Black might be right that Tesco could be a bid or merger target (he says hopefully!).

[nathdani] 02/7/2021 16:21

Gecko Well put across .

[geckotheglorious] 02/7/2021 09:16

Van,

Most likely yes. Long weekend for many - 4th of July on a Sunday so 5th July a holiday instead. UK/Europe markets will be quiet Monday with the US closed.

Good weekend all...

Sport galore.

[vaneric1] 02/7/2021 09:14

Probably just the day traders shutting up shop for the weekend Ste.

[ste1984] 02/7/2021 08:48

Looks like we are on the move this morning, hope it’s not just a blip. Don’t see any news or reason why.