topofeaturellc Posted July 30, 2014 Share Posted July 30, 2014 The UK supermarket industry has simply overearned in the last few decades. Tesco will have to reinvent itself to coop with structurally lower gross margins and have to plow back billions of pounds of CAPEX into store redevelopment. I don't think that is factually correct. If anything the storebase is overinvested in and the returns have been too low for the marginal players. You don't deal with structurally lower GM - where I agree with you - by increasing store spend, you do it by cutting SG&A and sweating the assets harder. IF they think store refurb is the solution these will all be terrible stocks. The stocks already price in being structurally less profitable. This is just like the '03-'04 value cycle in the UK when I hear these arguments. I'm not saying these are guaranteed winners by any means, and I can clearly see a path to them being dead money - mostly because of lack of capital discipline, but the "UK Grocers are dying" meme is a little lazy. Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted July 30, 2014 Share Posted July 30, 2014 Is it not also a little lazy to suggest it's just about CAPEX. Aldi/Lidl have a fundamentally different business model including much less variety and static prices. Plus Internet shopping (and the UK is the number 1 user of online in the world, I think) is totally changing the way people shop and profit margins. No one has yet worked out a way to do it profitably, while the customer demands it in greater and greater numbers. Link to comment Share on other sites More sharing options...
topofeaturellc Posted July 30, 2014 Share Posted July 30, 2014 I'm not suggesting its only about Capex, and certainly I think Aldi and Lidl are real things that have an impact on the industry. The industry has real problems. Indeed - I think any management team that thinks capex is a solution is delusional. I'm not convinced on the economics of grocery delivery. But I also don't think that's why the shares are cheap today. Its clearly about Aldi/Lidl and the weak comps Link to comment Share on other sites More sharing options...
ASTA Posted August 1, 2014 Share Posted August 1, 2014 Francisco Garcia Parames (Gurufocus.com) upped his stake by 80% in Tesco and was the most bought stock of him last quarter. This stock is locking very interesting 1. buffet is selling 2. Aldi is taking over all of uk 3.all gurus are selling expect one 4. and seriously does any one like this stocks(company's) future all this things make me wanna by the company Lets see Link to comment Share on other sites More sharing options...
yadayada Posted August 1, 2014 Share Posted August 1, 2014 There are 50k stocks out there. Why pick the one that buffett does not like anymore? That is like wanting to marry some ugly girl with aids when there is a line of supermodels trying to get your attention. Link to comment Share on other sites More sharing options...
topofeaturellc Posted August 1, 2014 Share Posted August 1, 2014 I don't like TSCO, but the Bestinver guys numbers in global equity are pretty insane. Like 800 over on a 15 year time frame. I don't get their Austrian angle, but they know what they are doing. Everyone makes mistakes on single names. Its silly to say that because someone who is smart threw in the towel you should to. http://www.bestinver.com/rentabilidadeshistoricas.aspx?tab=2 Link to comment Share on other sites More sharing options...
ASTA Posted August 1, 2014 Share Posted August 1, 2014 Its the cheap skate in me that likes it :D Plus if you look at Francisco Garcia Parames portfolio you would see that he is investing in food retail allover Europe and i think is one of the best regarding these stock in Europe now. He must have been looking really deep the last two years into these stocks. Plus I actually made 20% on the stock the last 3 years :D lucky Link to comment Share on other sites More sharing options...
compoundinglife Posted August 2, 2014 Share Posted August 2, 2014 There are 50k stocks out there. Why pick the one that buffett does not like anymore? That is like wanting to marry some ugly girl with aids when there is a line of supermodels trying to get your attention. I believe it was Charlie who said something along the lines of "You could probably do very well buying what we have sold". Link to comment Share on other sites More sharing options...
topofeaturellc Posted August 29, 2014 Share Posted August 29, 2014 Well - I think some good news in today's release. Always good to acknowledge the inevitable, nice to see a reduction in capital spending as they realize the store fit-out isn't the problem, and a proactive dividend cut is good if you already think TSCO is cheap but fundamentals are bad. SBRY down like 5% today as well. Still no quite cheap enough. But assuming you don't own either of the companies shares I don't see how you can't be happy about today. Link to comment Share on other sites More sharing options...
Charlie Posted August 30, 2014 Share Posted August 30, 2014 Doesn´t look like that Buffett doesn´t like Tesco anymore: Major shareholders as of 11.08.2014 http://www.tescoplc.com/index.asp?pageid=33 ;) Link to comment Share on other sites More sharing options...
flixil Posted September 12, 2014 Share Posted September 12, 2014 http://www.bloomberg.com/news/2014-09-11/munger-hosts-groupies-mocks-wall-street-praises-buffett.html In several responses, Munger reflected on what makes a lasting business and the nature of competition. He said Tesco Plc, the U.K.’s biggest grocer, has been hurt by missteps and challenges in its home market from discounters like Aldi. Berkshire is among Tesco’s biggest investors. Link to comment Share on other sites More sharing options...
ASTA Posted September 22, 2014 Share Posted September 22, 2014 Tesco is in this seemingly never ending spiral :D http://www.bbc.com/news/business-29306444 Maybe this company finally has had enough bad news? Luckily I have not bought any shares yet. Link to comment Share on other sites More sharing options...
klarmanite Posted September 22, 2014 Share Posted September 22, 2014 I consider myself very lucky to have gotten out when I did (3 and change including dividends). Tesco was one of my most glaring errors in quite a while... I've been pondering what I got wrong, and it seems there are several things to dig into. 1. My evaluation of the industry was lacking. This is a structural challenge for Tesco much more than a cyclical one, as I foolishly convinced myself. The discounters were far more aggressive than I imagined, and the rest of the industry were far more eager to wage a price war than I imagined. Buffett's advice that weak competition is one of the secrets in life is ringing in my ears. 2. Management chaos I did not see coming. CEO leaving, CFO leaving - I should have smelled a rat earlier - several key people had left the sinking ship already. 3. Letting asset backing soothe my other concerns. It remains to be seen what this real estate is really worth once stores are closed. In any case, it did not act as a valuation anchor in the way that I imagined. Link to comment Share on other sites More sharing options...
ASTA Posted September 22, 2014 Share Posted September 22, 2014 I just read a good counter bullish analysis on seekingalpha http://seekingalpha.com/article/2463035-tesco-aggressive-accounting-hides-financial-weakness Quite funny when he talks about offbalancesheets debt and how this should decreases earnings and 20 days latter shit hits the fan :D Link to comment Share on other sites More sharing options...
Charlie Posted September 25, 2014 Share Posted September 25, 2014 http://www.bloomberg.com/news/2014-09-25/billionaire-ashley-makes-70-million-bet-on-tesco-share-recovery.html?cmpid=yhoo It´s always interesting to look at things that are at 10 year lows. ;-) It will be interesting to see if Buffett is doing something. Link to comment Share on other sites More sharing options...
wescobrk Posted September 25, 2014 Share Posted September 25, 2014 Anyone buying here? Link to comment Share on other sites More sharing options...
compoundinglife Posted September 25, 2014 Share Posted September 25, 2014 Didn't WEB hedge or lock in a sale price on some/all of this position earlier this year? Wonder if he suspected the overstating issues. Timing was very good. Link to comment Share on other sites More sharing options...
gfp Posted September 25, 2014 Share Posted September 25, 2014 Didn't WEB hedge or lock in a sale price on some/all of this position earlier this year? Wonder if he suspected the overstating issues. Timing was very good. I don't think he hedged it. We was selling his position down last year and some of the share equivalents were held in derivative form for whatever reason. He likely continued selling, but we won't know unless he tells us as it probably won't show up at all in next year's annual report either way. Link to comment Share on other sites More sharing options...
Charlie Posted September 25, 2014 Share Posted September 25, 2014 "He likely continued selling, but we won't know unless he tells us as it probably won't show up at all in next year's annual report either way." Doesn´t look like selling: http://www.tescoplc.com/index.asp?pageid=33 Link to comment Share on other sites More sharing options...
gfp Posted September 25, 2014 Share Posted September 25, 2014 I don't know, obviously, but all we know from the filings is that Berkshire hasn't crossed below 3%. He could have stopped selling at the end of the year or he could have continued selling over 50 million more shares before any filing requirement. Tesco only reports what gets filed at the FCA. The share listing in BRK's last annual report is more recent and more accurate than the October '13 FCA filing that Tesco's website is basing it's number on - so we know Berkshire continued selling after that 10/13 filing. "He likely continued selling, but we won't know unless he tells us as it probably won't show up at all in next year's annual report either way." Doesn´t look like selling: http://www.tescoplc.com/index.asp?pageid=33 Link to comment Share on other sites More sharing options...
ASTA Posted September 25, 2014 Share Posted September 25, 2014 http://video.ft.com/3806081145001/Lex-on-Sports-Directs-Tesco-punt/Companies quite interesting. Link to comment Share on other sites More sharing options...
lathinker Posted September 26, 2014 Share Posted September 26, 2014 The Economist is out with two articles on Tesco this week: This one on the general situation: http://www.economist.com/news/business/21620228-even-if-british-grocers-accounting-scandal-soon-forgotten-its-failure-protect-itself The other one specifically on accounting: http://www.economist.com/news/business/21620227-booking-revenues-comedy-all-about-timing-not-so-funny Link to comment Share on other sites More sharing options...
peter1234 Posted October 2, 2014 Share Posted October 2, 2014 Buffett told CNBC on Thursday: I made a mistake on Tesco. That was a huge mistake by me. Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 3, 2014 Share Posted October 3, 2014 http://www.bloomberg.com/news/2014-10-02/billionaire-buffett-says-tesco-investment-was-a-huge-mistake-.html Link to comment Share on other sites More sharing options...
Zorrofan Posted October 3, 2014 Share Posted October 3, 2014 Buffett told CNBC on Thursday: I made a mistake on Tesco. That was a huge mistake by me. I wish there had been a bit more follow-up. Okay, it was a mistake to buy at that price, but what about now? Is this a good company that has stumbled or is this a mistake period? It would have been interesting to hear his thoughts...... cheers Zorro Link to comment Share on other sites More sharing options...
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