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Knigelk
Hi good to see you around...
I jumped in here this morning...see some value here ...
I am happy for Sainsbury to be in the supermarket background , just ticking away without spectacle and limelight ..what they do best
Market share isnt as important as it once was... what matters is earnings per share and ROCE ...
Tesco has recovered well these past few years but
Sainsbury P/E - 10.6 ( 216p/20.4 eps)
Tesco P/E - 16 - ( 247p/15.4 eps)
Sainsbury Dividend per share - 10.2p (2018)
Tesco Dividend per share - 5.77p
Sainsbury Adjusted Earnings Per Share - 20.4p per share
Tesco Diluted Earnings per share - 15.40p (nearest equivalent)
Argos is allowing Sainsbury to create earnings and profit under the same selling space they already have
Never seen you so angry - just looked in on the news - the share price should be near a bottom now but Sainsburys will probably still need a merger or acquisition at some point to avoid market share being reduced further - ditto ASDA. When Tesco is allowed a market share of 30% it does make you wonder why this was rejected - perhaps the regulator did not approve of two giants having 60% of the market??
BTW a relative is an employee of ASDA - most of them will be happy with the news as they all expected significant job cuts is the merger had been approved..
As I suspected in my last post. No deal was certain to send the SP off a cliff. This may well go sub 200 near term imho. GLA anyway. I think I will sit this out until dust settles.
Last year the SP rose 16.5% in early trading on results day .... #just_saying
What matters really is the underlying earnings figure .... eyes down for that
will pop back when it is in the 220s
Good to see this starting to move up.
" Amazon are a monopoly in on line general shopping."
Amazon is being seen for what it is ...slowly
The price reductions are misleading..mostly off MRP , not genuine offers
The customer product reviews are often fake
Netflix has competed against Amazon Prime movies Clothes competition online much improved with BooHoo,Asos, etc etc
Competition has matched same day delivery , 1 hour delivery, website investment,customer service, product returns, click and collect etc
Cost of Amazon Prime increasing ,
Argos did well over last Christmas and has been integrated well into JS and their stores
Treatment of warehouse staff and delivery 3rd parties well documented
Get out of paying taxes by "creating" low paid jobs and investment LOL
Scams and manipulation increasing rapidly on Amazon marketplace :
https://www.buzzfeednews.com/article/leticiamiranda/amazon-marketplace-sellers-black-hat-scams-search-rankings
Love_You,all consumers rich or poor are moving away from the weekly food shop to smaller more frequent purchases.A few pence here and there which can be a big margin on food is overlooked by the consumer.
The "city" doesn't like Sainsbury's but this business has a NAV per share of 278p,lets see how the results unfold next Wednesday.
Why would anyone commute in to an area that has an unemployment rate of 60%?
Again what work is there to be done from hone given the nature of the businesses I observed in this area - very little or zero work would need to be done from home except for marking homework by the teachers at the school.
I find it more likely, and from what I have observed whilst walking the streets and glancing around, that a good proportion of people have just given up because they were led to believe that society was run by people who would try and create jobs/manage the economy and for the past decade they have been hit by massive job losses, utility bill incfreases, council tax increases, fuel price increases, unporecedented financial fraud, and pension cuts (or even a lot of fraudlent activity misselling pensions which has led to many losing everything).
CMA have to be seen to be doing something and this was an easy win. More difficult is the monopoly position of big usa tech cmpanies. Amazon are a monopoly in on line general shopping. Ebay a monopoly in on line auctions. Facebook a monopoly in on line social networking. Moreover ,Not one of those companies pay more than a pilfering amount of tax. They are bad for the consumer and bad for uk tax but far too difficult to tackle.!
The merger was a good deal for shareholders because in the grocery sector scale is vital and this was the only way to try and get to a similar scale that Tescos already has.
Yes ASDA were extracting their pound of flesh, but unfortunately the reality is their low quality strategy was working just as well as Sainsbury's "higher-quality" strategy. Hence, there was no reason in the current market for Walmart not to try and extract a decent premium for selling ASDA. But it was a premium that Sainsbury's could easily have afforded to pay and crucially it would have given them control of enough market share to actually implement some kind of long-term business strategy.
Now they don't have the muscle to do anything other than to be slowly withered away over the next decade because the UK has a heavy bottom end, socially, and this will benefit Aldi/Lidl/ASDA far more than it benefits Sainsbury's.
How can the CMA have turned down this merger - do they want another financial crisis - shareholders have been patient here and tried to allow Sainsbury's to navigate the clusterfuck of a UK economy the BoE has presided over. But with Lidl/Aldi/Coop being allowed to expand post 2008 with cheap land, after the banks were forced to mark down commercial property by 40%, then I do think the big losers here are the shareholders who are seeing their capital being frittered away supporting a UK grocery sector which has far too many supermarkets for the size of the UK.
You know the company is not held in high or even moderate regard when the shares plummet following the merger announcement, and fall even more when the merger is killed off. This is a statement about the board and the lack of faith in them. I suppose that as usual even if they do fall on their swords (no chance) or are ousted (microscopically small to zero chance) they will be obscenely rewarded for their failure and will no doubt go on to secure another lucrative sinecure destroying other companies.
Sad but true.
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What the f**k are you talking about ?
The share price rose last year right up until mid August , climbing to 338p a share !!
The company booked a charge of £17m in H1 for the merger costs and there will be some costs in H2 , but..in the great scheme of things ...these costs are small
Tesco costs to exit Fresh & Easy stores from the USA were estimated at £1.2billion
Sainsbury once spent £100m on an adventure to open stores in Egypt
The Asda idea hasnt worked out but it is hardly the end of the world ..the cost is peanuts in comparison
The underlying business is still on track and the dividend yield now looks good for a buy in
The Net Assets show as £ 7.4billion whilst the current MCAP is £4.76 billion
The dividend yield looks very inviting at this price and the dividend looks covered nicely by underlying earnings
Cost savings are on track ..net debt is manageable and reducing by £100m a year
Pension fund isnt a problem
Dividend covered x2 with cash flow
uummm, not sure I would be so optimistic, Sainsbury's needed this more than Asda. Asda have Walmart (for the moment) and that will secure their continued development even if they are hived off into PE or Amazon......
Sainsbury's however have no where to go, yes of course they can continue with the Argos re sites and fill baggy space which they no doubt will do, but not sure that the dividend is 'safe' and it may indeed reduce now.
Mike Coupe needs a revised plan, and what can that be other than baton down the hatches, rein in the costs and mitigate the impact of the discounters who take more off the 'premium' stores than they do the likes of Asda.
I believe the share price could continue to drift down until a suitable plan is released and only then level out assuming the plan is regarded as realistic and capable of returning value to shareholders.
Their only other option would be an Amazon tie up, now that would not seem too mad bearing in mind the Argos element to their business, who knows, but I will not be investing here at present until things are clearer.
You know the company is not held in high or even moderate regard when the shares plummet following the merger announcement, and fall even more when the merger is killed off. This is a statement about the board and the lack of faith in them. I suppose that as usual even if they do fall on their swords (no chance) or are ousted (microscopically small to zero chance) they will be obscenely rewarded for their failure and will no doubt go on to secure another lucrative sinecure destroying other companies.
Sad but true.
You do know Walmart own Asda?
Totally overdone - not only today but over the latter few weeks so I’m in today. Missed the lows but 215 is a hopefully a cracking entry point and as you say especially with the divi (just wonder the the cost of fees to SBRY during this period)
I also bought some of these this morning... Not expecting much of a bounce but results are due next week and they'll probably be a board reshuffle shortly.
I jumped in purely because this area is like to see a bounce up. I am new to the company so forgive any inaccuracies.
I know, it doesn’t have the scale of Tesco or the food production business of Morrison. Needs a better operating profit margin. And poss merger with Asda - off table. But it pays a divi, I am not bothered if coup goes and it is technical support area.
pyuek, i bought some more at 212 because I think the fall is overdone and the company has many years of good returns to offer, even with an average management team.
I think it generally agreed that what's needed to move forward is a new management team. The current one had different ideas and motives, and my guesstimate is that their hearts and minds, having suffered a defeat (or setback) is to lack the motivation and, more importantly, the confidence to find the necessary strategy to turn things around. You really do need fresh faces for this. That's how life is.
Taverham: no idea if time to buy. The city has got it into its head that sainsburys has no strategy, the ceo has poor judgement and the company is going to struggle to maintain market share with discounters and a resurgent Tesco. Long term fears of disruption to grocery sector with technology companies but not yet clear what form, if any, this will take.
In short the market now hates sainsburys. Only putting out decent results next week with a clear sign that the business can grow without the Asda merger will turn things around.
So a deal that was never a great one for shareholders is blocked by the cma and the sp drops - time to buy? Time for ceo to say bye.
Seifert: I agree with you. My point is that today not a lot has changed. We have gone from a situation where there was a 99% chance the deal would be blocked (or require so many mitigating actions as to make the deal completely unfeasible) to the deal being blocked.
I never saw the metrics of the deal ever being really in sainsburys shareholders favour due to the structure of the deal. What’s a real shame is the waste in time and legal costs for a deal such as this. Sure the lawyers have done just fine. Anyway water under bridge now, the business is not dead it can turn round. Think Coupe is on borrowed time though.
The rationale for the merger arose in significant part from SBRY attempting to find a 'quick fix' for the value gap in grocery, namely to contend with Lidl and Aldi and, increasingly, with the offering from Tesco. The value grocers are moving up the value chain, thus competing with the likes of SBRY and MKS, with the notion that one can obtain the same quality at better value. This is what management was addressing (and feared). They were somewhat late to this and the merger with ASDA would have afforded them catch-up potential and time to refashion the brand and the business. Given this, where will the share price go? Likely down for bit until management overcomes the present disarray in their plans.