TW Comment on the Share Pr0ph1ts5 Oct 2017 17:14
blog - people normally dismiss this blog as a bears only comment shop with the self styled Sherriff of AIM sounds off but in this case it is pretty accurate:
Hello, Share Crackers. It happens nine times out of ten. A company announces much bigger profits in its half term results - and the share price crumbles. But no need for alarm, as the price usually recovers to strike north again within a few days. An enticing buying opportunity then? Which bring me to today�s tip.
I have far too many Tesco (TSCO) shares than is good for me. But when a share topples on accounting �issues� and falls like an anvil through the smithy floor, nobody can foresee it. Not unless you are an eagle-eyed accountant with constant access to the books.
And after a whammy like that, one can expect the share price to rally again, once things are sorted out. But that hasn�t really happened with Tesco, yet. Because like all the mainstream supermarkets in Blighty, it has been hit by price-war competition from the Germans.
But results out this week show that Tesco�s operating profit rose by nearly a quarter to �760 million. That�s profit, remember, not the usual misleading revenue count. The firm has also substantially reduced debt and improved its pension position. So we are definitely getting there.
The company is so pleased with that result that it announced a dividend for the first time since 2014. It�s not much to start with, being only a 1p interim pay-out. But that should attract back some institutions, like pension funds for example.
The profit surge isn�t just due to more sales. It is helped along by improvements to efficiency in the stores and at headquarters. And Tesco�s lesser known activities, like its bank and operations in Europe and Asia, brought in profits of �288 million. And its bank gives you Tesco points, too, which you can put towards your gift-buying this Christmas.
Though we don�t accept Tesco points in the Punter�s Return.
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