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The latest industry figures from Kantar show total grocery market growth of 11.7% to £11.6bn in the four weeks to 27 December, with sales of grocery goods jumping 13.6% among supermarkets and dedicated food retailers.
Kantar’s four-week market figures seen by The Grocer show almost all of the major multiples in double-digit growth during the period.
Tesco, which has yet to officially report its Christmas figures, was the leading big four player, with grocery growth of 14.3%, followed by Morrisons at 14.1% and Sainsbury’s at 13.8%. Asda was the only big four player to lose market share over the period, with growth of 9.8%.
Simple equation I think. Asia business worth c13% of profits but special divident worth 20-25% of sp so I reckon we will see net value gain of c12% plus the results for Tesco are gonna be mega. Expect a 5-8% up day IMO. The markets are mad so who knows
F#ck it .....just topped up.
Even when the funding is coming from the sale of assets?
Think I will wait till after divi to see what happens and hold existing shares.
All dividends come straight off the share price
I was told special divi would come straight off share price.
Nobody knows what the share price will be after the special dividend. I have forgotten what the NAV per share is represented by the Asia businesses. Also, we do not know what the effect of share consolidation will be.
I added more today. Whilst the sp may go down on div we take cash back to reinvest elsewhere. The divi of paid at historic levels relative to new sp will be one of the highest in ftse thus attracting much more interest. Don’t forget many retail investors out there don’t understand shares, will see the drop in sp and see this as a buying opportunity. I wouldn’t be surprised to see the sp in the low to mid £2s after ex div and everyone will be kicking themselves for not getting in
I am also thinking of adding more and have set an automatic purchase at 245.6p since I think this could easily reach 263p in next few days.
Thinking of adding more...hmmm. Price drop as well once divi paid....hmmm
Hopefully Ken Murphy will set his stall soon for Tesco he could run for a while on the tailwind of Dave Lewis but it won't last forever hoping he stamps his vision on Thursday big shoes to follow imho.
Thanks for the info. Same yesterday....9m reported sale was one!
Webba
I can see a continued rise as we approach the trading update next week providing the markets are not spooked. I think the update is expected to be good so maybe it is priced in already. MRW fell on the day of it's update despite the positive numbers.
Totally agree with your comments about the next quarter and can see restrictions continuing until Easter. TSCO is one of the few supermarkets currently running an advertisement campaign and with Asda losing market share you would expect the company to do well post covid (or the new normal)
Maybe after XSD TSCO may attract more investors as there will be no tax implications and uncertainties about the company valuation with some investors waiting for the correction in the sp after the GM.
barchid
It was not ,02p but ,0002p, Sounds crazy but there was never a good time to sell. At .48p EB was mentioned as a buy in the Midas section of the Daily Mail :]
This is about the only time Tesco has ever looked interesting. At £2.45 already moved from my buy in at 2.30.
I expect a decent rise to the 14th with the trading update. Not rocket fuel like some of the smaller caps i ve picked but a steady 7-8%. I'd usually sell before ex dividend and the drop but with this lockdown fueling a positive next qtr this may be come a medium term hold for me as think the price will recover post the ex d and continue to grow. The revision to the balance sheet with pension deficit is a big plus.
the flip side is although i dont need the money, there may be better opps out there medium term so may well take the uplift of the rise from the 14th to the 11th. Expect it to move from 255-260 to close to 280 . My opinion only. DYOR
Leas
I take my hat off to you, there's no way I could hold a stock from 2p to 180p without selling.
I look back to some of my purchases around the erm ejection time and keep quiet, long gone the lot of them, sadly.
On a brighter note I felt I had to top up again on TSCO today, I can't help myself.
On a br
Rosewall
My biggest ever return on a share was in the very early 90s. EB was a retailer selling electronic games online. I had no investment experience at all but being the younger generation at the time I saw the potential. The only fundamental I understood was the lowly MC. I took a gamble and loaded up at 0.02p A decade later I sold at £1.80p when the company had morphed itself into Game.
I then made the mistake of investing a proportion of that profit in a high yielding company. HMV at the time fitted the profile of a good safe company that had been on the high street for almost a century.
I managed to get out a week before them going into admin losing 60% of my investment.
I think experience has told me that luck plays a significant role in making money from in this type of investing but agree we can reduce the risk with research.
I am sure in the past you have read articles from journalists who have engaged the services of a monkey and put them head to head with fund managers.
No prize for guessing who came out on top.
leas,
On reflection, I would have to agree with you. As you say, "if they make a profit". Due diligence and research does not remove risk but it does go some way to alleviate it. If I ever invest in a share, even as an in and out trade, I like to do some research. I don't think I have ever gone into a share that I don't understand or would not be happy to hold long term if things go wrong. I learnt my lesson with SXX to keep emotion out of it though.
Tzap
Same pattern as yesterday with large trades being reported after the bell. All red of course and a cruel UT. Question is, are they all sell transactions.
Rosewell
In fairness I think in the past I referred to the sale of the 2 businesses in Asia as a singular sale of assets but not all private investors are as diligent as one another.
You could also say the same with the institutional investor too. I can remember holding a pharma for a number of years and can say without hesitation that the private investor knew more about the business and its journey leading up to a commercial deal.
You are clearly a guy that does his due diligence and that has to be respected but equally an investor who may be a bit more ‘cavalier’ is to be respected if they make a profit.
Leas, Barchid,
I would disagree with one point raised. Any confusion over the special dividend (and consolidation) is down to PIs being too lazy to read the published circular. Posters were referring to the Asia business when it was plural. Posters were saying the Asia businesses were profitable when only one was. Posters were denying that there would be share consolidation. Within the past fortnight, posters were saying that there would share buybacks even though this would mean another GM . Any confusion about the deal is entirely due to the laziness of the PI.
Sainsburys went up after its recent ex special dividend date had passed so I'm hoping it does here too.
Good to see HL promote TSCO as one of their 5 picks for 2021 (extract below):
With almost 3,800 stores in the UK and Ireland, Tesco is a retail titan. But when you’re big, growth becomes a challenge.
Tesco’s answer is online shopping. That footprint puts it in a strong position to capitalise on the long-term digital shift sparked by coronavirus. 25 UK urban fulfilment centres are expected to open in the next three years, and online capacity is set to double to 3.0m delivery slots a week.
This opportunity sits on top of an already thriving store business. The pandemic hasn’t done anything to deflate its dominant market share.
Tesco recently completed a plan to rebuild operating margins, up from 1.8% in 2016 to 4.6% in 2020. The other aspect of the corporate tidy-up includes selling less compelling parts of the business, in Poland and Asia. This doesn’t just provide sturdier foundations, the sale of the Thai and Malaysian business equates to a cool £8.2bn of cash. About £5bn of that will come back to shareholders as a capital return via special dividend.
That brings us to Tesco’s yield. It’s a market-beating 3.9%. That’s higher than it has been for most of the last 5 years. Remember though, no dividend is guaranteed and yields are not a reliable indicator of future income.
An improved pricing proposition is helping Tesco poach customers back from Aldi too. But pricing pressure remains an industry-wide issue. Consumers always want more for less, and the recent sale of Asda raises the possibility of another margin-diluting price war. Coronavirus has also dented margins, including hiring 45,000 extra members of staff at the peak of the crisis (16,000 are now permanent). Don’t expect rocket-fuelled profit this year, operating profits are expected to be 25.3% lower.
Change brings execution risk too, especially as a new CEO was welcomed in October 2020. We’d like Ken Murphy to set out his strategy sooner rather than later.
But when all’s said and done, Tesco’s primed to make the most of the shift to online, while the store businesses keep simmering away. Reliability is something of a rarity in today’s stock markets, and with a PE ratio of 13.7 that makes Tesco stand out.
HL’s non-executive Chair is also a non-executive director at Tesco.
barchid
Fully agree. That said there are still plenty of trading days left before the 11th Feb. I’m sure the company has took advice from the city and this process is what they have determined to be the best way forward for shareholder value.
However, as you point out this has led to investor confusion or certainty private investor confusion who will be hoping for a rise as we approach the GM.
I guess that is when most will sell giving an opportunity to the institutions.
All guess work of course and I will reassess my strategy as things play out.
Fwiw, I think TSCO will be in better shape post Covid and their online sales leaving the rest behind. We also have to remember that Booker will be doing well too as smaller independent shops will be seeing increased footfall. This on top of savings running the Pension Fund does make a strong case for a long term hold.