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Dadean
Tesco now sell cakes with files in them. You can take one when you visit Gavster inside :-)
I’ve purchased recently because of the Special Dividend coming up, but also because I personally feel British Supermarkets in the next few years will be positive. If the SP drops after the SD I will purchase more. I personally feel it’s a win win. All my opinion of course.
Usual large reported trades. Again impossible to say whether or not they were buys or sells as we don’t know the time they were executed. 2 large ones at intra day lows and several at the days highs.
We are mere spectators. :)
Gavster just don't include it in your divs received calculations! Or reinvest it immediately, they returned it to you, you returned it to the market, same capital invested.... Not tax advice, just for fun
The Vodafone sale of Verizone may have had some technicalities which were different but I`m not sure of all of them except with the Verizone deal shareholders were also given some shares in Verizone and perhaps that is the reason why Vodafone could call it a "Capital payment / Return" instead of Dividend. !
Anyway I`m sure its too late to change this now and I don`t think, little old me writing to TSCO will change anything since they have far cleverer people to advise them and if they could have done a "Capital return" I`m sure they would have. But "food for thought" for future sales.
@ leas think you have got it exactly right with the algo trades. Summed everything up.
Lurker
MRW fell on the day of its results and it traded positive afterwards. Their results equally as good. Online trading with TSCO is increasing and not struggling to meet capacity as much as the other big 3.
My guess is a lot of pi’s were expecting a significant gain today despite it trading above 230p. I would guess that some have sold today hence the neutral sp reaction.
Tbh, with all these algo trades the price at the moment can be taken in any direction that suits institutional investors.
This is a sound company with little risk.
As fir the bank, like SBRY someone would be happy to buy if that is a solution to minimising the company’s exposure to the banking sector woes.
Well, in my view that was a great trading period for Tesco. I can't help but think that the reduction in sales from Tesco Bank have had an impact on today's news, and resulted in the small drop - or maybe even stopped it from rising? Or am I missing something here?
What's the difference between the Vodafone sale and this Tesco sale in allowing Vodafone to call it a Capital Return, and Tesco not being able to. If there is no legal difference, then it doesn't what HMRC's opinion is.
jaffjoon,
Honestly, given Tesco's track record, do you honestly think that HMRC will let that one pass?
Dadean
There will always be the exception to the rule but I can assure you that the vast bulk are genuine. My own local store had to send 40 colleagues home to self isolate. The colleagues have done brilliantly well and have stepped up to the plate.
That's my way of thinking Gavster. Though I'm still trying to decide whether to just let it automatically reinvest under DRIP or take as cash and reinvest at my time of choosing when things settle (in case the boys on the market cause the SP to temporarily inflate, knowing that bulk reinvestment purchases will be happening at the same time under DRIP)
IMO, this will show a much better return when the special dividend is reinvested, as the drop in dividend will be compensated for with the extra holding, so increasing my yield above the market.
jaffjoon
It's a worthy question. have you emailed the company ? If you do, please share any answer back from investor relations or better if find the CEO's email or secretary with a search engine.
Just read they have 30,000 staff off sick or isolating at the moment, huge number, wonder how much of that is genuine sickness... Apologies for scepticism
Reply to Percyvrance`s question regarding what happened when Vodafone sold Verizon in Feb 2014.
I have finally found the details through my records and they were as follows:
" For every Vodafone share held at close of business on 21 Feb 2014, shareholders have received 0.0263001 Verizone shares and will also receive US$0.4928. Vodafone has also completed a share consolidation and shareholders have received 6 new Vodafone shares in place of every 11 Vodafone shares previously held"
The US$0.4928 per share was also "defined" / called a "Capital Payment" and NOT a dividend so one did not have to log it as a dividend and no taxation due.!!! Which brings me back to my questions this morning: Why can`t TSCO define the 51p as "Capital return / payment" ?
Responses appreciated.
Thanks.
If it walks like a duck, quacks like a duck then it is a duck.
Gavster; Thanks for the analysis. I have one important question which may change things as follows:
I assume TSCO can re-name / define the Special dividend and call it "Return of Capital" since I think they mentioned this word before. If it could be defined as "Return of Capital" (which it really is by definition), then surely for those investors subject to taxation, there would be no tax to pay since its not a dividend ?
Please advise where (if at all) I have gone wrong on the above.
Thanks
Hi Leas,
Back in the late 80's probably, from memory, did Sainsbury and Carrefour not have a joint venture in their Calais store? Also, Tesco had a working relationship with Carrefour too just a few years ago.
Will these be on the same day ?
For me it's makes no sense to consolidate as it's all about market cap and a large SP driver will always be dividend level, but perhaps for more casual investors the share price remaining the same is a good thing.
Just sharing some calculation scribbles.
When looking at these figures from their website.
https://www.tescoplc.com/investors/reports-results-and-presentations/financial-performance/five-year-record/
In the section 'Operating profit/(loss) before exceptional items and amortisation "
The Asia business contributes to 426/3005, about 14% of the profit.
The Share price is currently 240 with 51p being returned, so the SP will go down by 51p/240p, about 21%.
Unless the holding is in a pension or ISA, then given that this dividend will be taxed, then the amount a shareholder receives will also end up being broadly 14% of the share price.
All basically meaning the special dividend is broadly priced in.
That all said, if the dividend level goes down by the same 14%, to 7.9p, then an equivalent SP with today's yield of 3.8% equates to a share price of 208p, add the 51p special divi equals 259p, so IMO, a rise to 260p is reasonable.
Will the normal dividend rise over 9.15p this year. IMO it probably will due to Tesco having increased its revenues.
Not sure if it was picked up by many investors of this sector yesterday but an approach was made to Carrefour by a Canadian company. Although the talks are at an early stage the French Government has stated that the largest private employer in France will remain French owned.
Although OT, certainly worth a read as it may trigger some consolidation in the food retail sector.
https://news.sky.com/story/french-government-will-take-a-close-interest-in-canadian-companys-bid-for-carrefour-12186949
Right, I think I almost understand this now.
So.....The SD gets paid, the price goes down as usual accordingly. Then, the share consolidation happens and the holding goes down but price increases. The gamble is whether the price goes back up to previous levels factoring in the share consolidation?
Likewise Rosewall. I signed up for the max £500, 5 year SAYE on the basis that I couldn't find anything saying the price would be adjusted or affected by the consolidation. Best chance of making a tidy profit since the £1.50 offer after the accounting shambles IMO. As SAYE is contracted at a stated price from the beginning, with no mention in the contract of an adjustment I'm assuming it can't then be altered down the line. I could be wrong but that's my logic. Worst comes to the worst I can just cancel and take any contributions back or let it run and take my money back at the end if SP is lower then so can't lose either way really. Unless you count the minimal interest it would earn in the bank (though I doubt I'd religiously bank or invest £500 a month if it wasn't taken from my wage without me even seeing it!)
Adeg
I agree with your basic comments. My wording in one area was pretty poor due to finger trouble and not being able to amend the post. When I wrote "This is strange", I meant to say that "This is a strange one," meaning it doesn't fit the usual special dividend scenario i.e. sale of asset, reduce NAV, pay investors. Essentially a return of capital. This is more complex and although both the positive and negative effects on the Balance Sheet are known, this will not translate into market sentiment, at least not at this point in time - there will be time to pick up cheaper shares later.
I did make more enquiries yesterday and have still not found anything that says colleagues SAYE plans will be affected by the consolidation - happy days if that turns out to be correct.
I was hoping for better today, still potential though in the coming weeks ..