Guest Hester Posted January 12, 2012 Share Posted January 12, 2012 http://www.bloomberg.com/news/2012-01-12/tesco-disappointed-with-u-k-sales-decline.html?cmpid=yhoo Tesco fell as much as 16 percent, the most since at least 1988, after saying profit will be at the “low end of the current consensus range,” while next year will see “minimal” growth in earnings. U.K. sales at stores open at least a year fell 2.3 percent, excluding fuel and value-added tax, in the six weeks ended Jan. 7, worse than the median estimate of 10 analysts compiled by Bloomberg for a 1 percent decline It's interesting because most large (in dollar terms) investors I respect own some, like Buffett. Link to comment Share on other sites More sharing options...
Gopinath Posted January 12, 2012 Share Posted January 12, 2012 Buffett mentioned that he will buy more if the price goes lower! Here we go! Link to comment Share on other sites More sharing options...
CanadianMunger Posted January 13, 2012 Share Posted January 13, 2012 At slightly over a 10% earnings yield I couldn't resist averaging down (ADR). Lets hope if goes even lower! Link to comment Share on other sites More sharing options...
racemize Posted January 13, 2012 Share Posted January 13, 2012 At slightly over a 10% earnings yield I couldn't resist averaging down (ADR). Lets hope if goes even lower! Is there an ADR in the US markets? I couldn't find anything other than the London ticker. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted January 13, 2012 Share Posted January 13, 2012 Is there an ADR in the US markets? I couldn't find anything other than the London ticker. http://www.google.com/finance?q=PINK%3ATSCDY Link to comment Share on other sites More sharing options...
Gopinath Posted January 13, 2012 Share Posted January 13, 2012 Yes, it trades in pink sheets! symbol is TSCDY. Link to comment Share on other sites More sharing options...
oddballstocks Posted January 13, 2012 Share Posted January 13, 2012 Looks like it's slightly cheaper to buy in the US as well, 317 pence per share vs 319 pence in London.. I've seen this with a few other ADRs, I own Treasury Wine Estates TSRRY, it's trading at 3.61 vs the Australian version at 3.62, at parity the ADR should be 3.72. I will usually buy the cheaper version if I'm looking at something that trades as an ADR, sometimes the foreign ordinary share is cheaper, other times the ADR. Link to comment Share on other sites More sharing options...
turar Posted January 13, 2012 Share Posted January 13, 2012 Relevant: http://brontecapital.blogspot.com/2012/01/tesco-request-for-comments.html Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted January 13, 2012 Share Posted January 13, 2012 I just bought Tesco, but be careful on this one. The main reason why Tesco struggled in this half is down to the new CEO. Basically, Tesco have a rewards system where you get 1p back for every £1 that you spend. When Britain went into recession last year, they doubled the rewards, giving customers 2p back for every £1 they spent. However, last year they went back to giving 1p back for every £1 spent, and then used the savings to market a new price drop campaign called "The Big Price Drop". This ended in a fiasco, as it turned out that Tesco merely increased prices in the week before, only to drop them back to the original price. The old CEO (Sir Terry Leahy) had been in charge since 1997 was an experienced (and visionary) retailer and would have known better to try and con customers like that. Link to comment Share on other sites More sharing options...
ShahKhezri Posted January 13, 2012 Share Posted January 13, 2012 Any thoughts on Tesco losing focus on their home turf while trying to aggressively expand globally? Link to comment Share on other sites More sharing options...
Guest bengrahamofthenorth Posted January 13, 2012 Share Posted January 13, 2012 Thanks for the tip on management's game! I'm intrigued by tesco as well, (earnings yield, buffett's investments). Does anyone know how the dividends (withholdings tax by the UK/US or Canada) work when buying a UK sponsored ADR for a Canadian tax protected account. (RRSP/LIRA)? Cheers Link to comment Share on other sites More sharing options...
CanadianMunger Posted January 14, 2012 Share Posted January 14, 2012 AFAIK you cannot hold Pink Sheets investments in a RRSP. I do believe the LSE is an approved exchange, however you would need to find a broker that allows you to buy UK stocks directly in your RRSP (I'm not sure if there are any). I hold all my Tesco shared in non-registered USD account. Link to comment Share on other sites More sharing options...
beerbaron Posted January 14, 2012 Share Posted January 14, 2012 Anybody know what's the tax treatment in Canada on dividends paid by UK listed companies? How about the capital gains? BeerBaron Link to comment Share on other sites More sharing options...
racemize Posted January 14, 2012 Share Posted January 14, 2012 Anybody know what's the tax treatment in Canada on dividends paid by UK listed companies? How about the capital gains? BeerBaron I have the same question for in the US (foreign/ADR/pink sheets). Link to comment Share on other sites More sharing options...
oddballstocks Posted January 14, 2012 Share Posted January 14, 2012 Tax for US residents, it depends on the ADR sponsorship level, full sponsorship an it's qualified. Not full and taxed as ordinary income. Link to comment Share on other sites More sharing options...
philassor Posted January 19, 2012 Share Posted January 19, 2012 Now 5.1 % (that should be about 2 billion usd) http://www.bloomberg.com/news/2012-01-19/buffett-s-berkshire-hathaway-increases-tesco-stake-to-5-08-.html Link to comment Share on other sites More sharing options...
WarrenWatsa Posted February 22, 2012 Share Posted February 22, 2012 Missed earnings recently, but, should be able to recover lost growth over the next few years, IMHO. Growing well outside UK, but, should lose some market share over coming years inside UK. Real estate value is compelling alone, never mind earnings and equity, in fact. But, at current future multiple, firm is still a nice play earnings-wise, IMHO. Third largest global retailer. ADR is at $14.95. Pays 4-5% dividend. Cannot be held inside RRSP (or TFSA?). It's now back around or possibly even slightly lower than what Buffett paid when he increased his stake last month. Link to comment Share on other sites More sharing options...
twacowfca Posted February 22, 2012 Share Posted February 22, 2012 What's the reference for the filing showing That Buffett increased his ownership? Link to comment Share on other sites More sharing options...
xxx1313 Posted February 22, 2012 Share Posted February 22, 2012 Tesco is the source, according to Bloomberg: http://www.bloomberg.com/news/2012-01-19/buffett-s-berkshire-hathaway-increases-tesco-stake-to-5-08-.html Link to comment Share on other sites More sharing options...
PlanMaestro Posted April 21, 2012 Share Posted April 21, 2012 Tesco’s Phil Clarke is no Lemony Snicket http://www.ft.com/intl/cms/s/0/a0346be4-8abd-11e1-912d-00144feab49a.html#axzz1sXVKYMjf But the gloom over Tesco’s performance since Sir Terry left is exaggerated. True, the share price has fallen by a fifth since he quit the building – and it rose on average 9.3 per cent a year during his tenure. But the numbers simply do not support the idea that the supermarket chain is in serious trouble. Tesco’s pre-tax profit last year rose more than 5 per cent and its operating margin went up as well. Its revenues increased by more than 7 per cent. Most importantly, perhaps, for investors, despite recent travails, Tesco’s dividend also went up. The dividend yield on its shares is a tasty 5.1 per cent – whilst the FTSE 100 is only yielding 3.6 per cent. Tesco will fund most of its turnround plan from the cash it generates – more than £4bn last year. Investors should give Mr Clarke’s luck a chance to turn. Link to comment Share on other sites More sharing options...
PlanMaestro Posted April 30, 2012 Share Posted April 30, 2012 http://www.ft.com/intl/cms/s/0/5d3f9718-9054-11e1-8cdc-00144feab49a.html#axzz1tX0xqhyN But a quite separate charge is levelled by disgruntled fund managers. Besides diversifying unduly – by geography as well as product – Tesco has invested too aggressively in physical growth at the expense of cash flow. That may well be true, but it is changing. A decade ago, Tesco’s global capital expenditure was equal to 3.5 times its depreciation charge. Five years ago it was 3.2 times, and last year 2.3 times. This year spending is promised to fall further, though that will partly be offset by the cost of smartening up the existing estate. This matters for a separate reason. While the dividend paid by a company should not affect its intrinsic value, the practical investment purpose of a utility is to provide an income. In this context, Tesco’s decision this month to raise its dividend by a mere 2 per cent was significant. Not only was this below the rise in earnings per share; it was the first time, as far back as I can track it, that the dividend went up by less than retail price inflation. But while this may be taken as a signal of intent, it does not seem to be due to lack of means. Free cash flow cover on the dividend has been steadily falling, from over 5 times a decade ago to 2.5 times now. But unless the company is in worse trouble than we know, that hardly puts the payment under threat. Meanwhile, the historic yield on Tesco stock has risen to 4.7 per cent, compared with 3.5 per cent for the UK market overall. In such troubled times, that seems curious. Tesco may have lost its winning combination of growth and defensiveness, but its defensive qualities scarcely seem in doubt. Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 3, 2012 Share Posted May 3, 2012 Found this on a message board. Have to check the accuracy of the statement: In brief, Tesco’s plan is to reign in the opening of new hypermarkets, concentrating instead on opening local higher margin convenience stores. The group also intends on driving its internet offering, where its vast store footprint allows it to accelerate the “click-and-collect” side of the business. Less new hypermarkets will also reduce its planned capital expenditure to £3.3 billion from £3.8 billion, boosting the overall return on capital employed. A previous four-year investment program into UK services, such as banking, mortgages and current accounts, is also due to start paying off. The company is now valued at £26 billion, but has significant asset backing through its property portfolio. At the full-year stage its property assets were valued at £22 billion,. more than the combined estates of the UK’s three largest property specialists; British Land, Land Securities and Hamerson. These assets can be unlocked to release valuable funds, implying investors are almost getting the retail operations for free. Link to comment Share on other sites More sharing options...
PlanMaestro Posted May 3, 2012 Share Posted May 3, 2012 Some reports: Case study: http://www.coriolisresearch.com/pdfs/coriolis_tesco_study_in_excellence.pdf Anti-Trust commission: http://ageconsearch.umn.edu/bitstream/53210/2/Peter%20Davis%20Beijing%20Paper%20-final.pdf Case Study: http://profesores.ie.edu/enrique_dans/TESCO/TESCO.pdf Sainsbury Case Study: http://cws.cengage.co.uk/thompson5/students/sainscase.pdf Morrisons Case Study: http://www.bolton.ac.uk/bbs/referdeferassessments/s22008-9/mbaandmahrm/mba4059ass1.pdf Retail Markets Today and Tomorrow: https://dspace.stir.ac.uk/bitstream/1893/1181/1/Quinn%20%20Sparks%20IRRDCR%20Paper%20Draft%201.pdf Long history UK retail: https://dspace.stir.ac.uk/bitstream/1893/1181/1/Quinn%20%20Sparks%20IRRDCR%20Paper%20Draft%201.pdf Euromonitor Trends: http://www.ryerson.ca/~rmichon/mkt731/reading/Global%20Retailing%20Strategies.pdf USDA: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_London_United%20Kingdom_2-3-2011.pdf Competition Commision: http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft845.pdf Productivity: http://eprints.ucl.ac.uk/2724/1/2724.pdf Productivity: http://www.paulormerod.com/pdf/040731%20Reynolds%20et%20al%20productivity.pdf eCommerce: http://oro.open.ac.uk/27749/2/e-strategy-retail.pdf Private Label: http://www.coriolisresearch.com/pdfs/coriolis_towards_private_label_success.pdf Private Label: http://www.booz.com/media/uploads/BoozCo-Private-Label-Retail-GCC-Middle-East.pdf Private Label: http://www.symphonyiri.gr/portals/0/articlePdfs/Special%20Report%20-%20Private%20Label%20in%20Europe%20-%20Dec.%202011.pdf Private Label: http://www.pwc.ru/ru_ru/ru/retail-consumer/assets/private-labels-eng-may2011.pdf Link to comment Share on other sites More sharing options...
ragu Posted May 7, 2012 Share Posted May 7, 2012 The company is now valued at £26 billion, but has significant asset backing through its property portfolio. At the full-year stage its property assets were valued at £22 billion,. more than the combined estates of the UK’s three largest property specialists; British Land, Land Securities and Hamerson. These assets can be unlocked to release valuable funds, implying investors are almost getting the retail operations for free. Without speaking to the accuracy of the valuation of the real estate assets, the last part of the statement isn't really true. These are operational assets, so their sale dramatically changes the business: The earnings power is lower- you've now got to pay to leaseback the assets that were sold - and there is increased risk as a result of the additional operating leverage. Best, Ragu Link to comment Share on other sites More sharing options...
lookingstill Posted May 28, 2012 Share Posted May 28, 2012 Thought this was an interesting presentation and I haven't seen it posted here. http://www.media-server.com/m/p/k74r8okm Also, an interview with Phil Clarke. http://www.tescoplc.com/index.asp?pageid=187&mediacategory=49&mediaid=290 Link to comment Share on other sites More sharing options...
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