Tesco Live Discussion

J_Westlock 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers SaraRacano: Basically this is to get MP’s to vote for May’s deal! I agree… and you are going to see a lot more of the ‘No Deal Preparation’ blitz starting the coming week… but that’s little to do with “remainers”… as you say it is from those trying to get us to Leave the EU via the May Deal…

SaraRacano 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers Basically this is to get MP’s to vote for May’s deal! Why Ostend, cannot the P&O boats sail round from Dover into Ramsgate?

J_Westlock 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers You reckon that company will still be around in 3 years let alone 10?

Ripley94 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers Sara … I would not be surprised if Tommy Makems fourth Green Field joins the other three within the next ten years.

J_Westlock 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers SaraRacano: How low can remainers go? Eh? What does this have to do with wanting to remain in the EU? These are contingency plans for a No Deal… which are necessary because of the vote to Leave the EU. So Leaving the EU is already costing us money…

Ripley94 05 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers No you certainly could not make it up , would you invest in Seaborne Sara ? Appears the guy in charge not keen on paying UK tax , but keen on taxing it. Made Andy McDonald look statesman like. How have they made new New labour look like the next government in waiting .

SaraRacano 04 Jan 2019

Britexit (Ramsgate-Ostend) stark raving bonkers How low can remainers go? The government issues the Ramsgate - Ostend emergency Britexit plan, to a company with A shipping company without ship, license, proven funds or track record. It doesn´t even have any ties to either port. JESUS!

jackdawsson 04 Jan 2019

Tesco growth forecasts Sara, Thanks. Valid points. Most will agree it was always overbought at those levels, even without hindsight. Ditto SBRY when it peaked at 340+ making near 4 year highs at a similar time last year. There were indeed both strong fundamental & technical reasons for avoiding both stocks at anywhere near those levels. I won’t belabour my contrary points, bar a mention. For eg. that some of TSCO’s more alarming ratios are reportedly coming down, with underlying progress seen over successive quarters. But it’s only healthy for BBs to see both bearish & bullish views presented when reasons are well considered. As clarified elsewhere, IMO, markets are increasingly sentiment-driven. Factors like meeting expectations & presenting positive forward guidance tend to take precedence, even if latter errs on the bullish side, as often it does. Hence many stocks get overbought & then oversold from subsequent disappointment. Key thing for me: my exposure here was never as huge as elsewhere. Reduced to 1 long as of yesterday (reasons in another thread). I won’t hesitate exiting when that too goes well into profit. It’s currently almost back at B/E. Final general point: I note that while many threads here are 100% germane to TSCO, there are others, for eg. “Buying & holding strategy” that have much wider focus. Some of those may get many more views & responses if also tagged onto other BBs. For eg. I’ve only seen them since opening a long on TSCO. Like many others, I tend to only keep in regular touch with BBs I’ve an active financial involvement in, so currently just 6 BBs. That may apply to significant others. If they’re not in TSCO, they may overlook them. Just a thought. - GL.

SaraRacano 04 Jan 2019

Tesco growth forecasts Yes, I am well aware of Simply Wall Street’s assumptions over Tesco, they had Tesco at 260p as “reasonably priced”. Going on hindsight + historical p/e data, it should have been clear Tesco looked very toppy at those levels. All I am doing is trying to make you & who-ever else reads these posts aware TSCO’s debt-to-equity ratio, they shouldn´t be too far a miss. However, as I indicated to J_Westlock, it´s important that all posters reveal their true sources of infomation, not pretending that it´s their own. 76% would still be quite high. You then have to carry out historical averages. Moreover, the last time people came unstuck with Tesco, they thought ROCE had nothing to do with property leasing, the property sales were distorting the true trading figures!

jackdawsson 03 Jan 2019

Tesco growth forecasts SaraRacano: “Given that ’s debt-to-equity ratio is currently 83.44%,” Tesco simply doesn’t have the balance sheet to grow 15% in 5 years let alone 15% every year. That is staggering growth! Sara, This assumes that the 83.44% figure provided by Simply Wall Street is correct. Mind that this is the same site that has TSCO’s SP as justifying around £3.10 based on future cash flow. Hmmm. Other financial sites give TSCO’s debt-to-equity ratio as having come down substantially. I often use the linked site below for live SPs & other financial data, which I’m not claiming is 100% right in every respect as other financial sites have yet other figures for TSCO’s debt-to-equity. Presumably the inconsistency can partly be explained by that fact that various methods are used to calculate it. - GL. [link] They have TSCO’s debt-to-equity v the industry average in the 2nd column as thus, presenting an altogether different picture.

SaraRacano 03 Jan 2019

Tesco growth forecasts “Given that ’s debt-to-equity ratio is currently 83.44%,” Tesco simply doesn’t have the balance sheet to grow 15% in 5 years let alone 15% every year. That is staggering growth!

jackdawsson 03 Jan 2019

Tesco growth forecasts SaraRacano: This is crazy for the likes of Tesco, based on such multiples of a p/e of 21 (260p. You can see why when a stock is based on such fundamentals, why directors take on more & more unjust risk. From what I can find the average 13 year historical p/e for Tesco is from 7 - 13. So even in the hottest years for Tesco (00-07) it never got multiples in the high teens. Sara, But giving it some perspective, that growth forecast of 15.95% is only broadly in keeping with previous IGD forecasts for UK’s entire food retail sector, ie. about 14.80% growth by 2023. It may seem overly bullish, & perhaps especially for those with a strong short interest wearing bear goggles, but on reflection perhaps not all that crazy. [link] Maybe of interest & to others too, DT has TSCO’s current P/E at 12.87. - GL.

SaraRacano 03 Jan 2019

Tesco growth forecasts I have no idea about correctness but according to the link below "If analyst predictions are right, the company’s earnings are forecasted to grow by 15.95% every year for the next 5 years, which is relatively robust. This is crazy for the likes of Tesco, based on such multiples of a p/e of 21 (260p. You can see why when a stock is based on such fundamentals, why directors take on more & more unjust risk. From what I can find the average 13 year historical p/e for Tesco is from 7 - 13. So even in the hottest years for Tesco (00-07) it never got multiples in the high teens. [link]

jackdawsson 03 Jan 2019

Long at 198.50 jackdawsson: Added 2nd long at 190.70. Reasons similar. Support not far below, Closed yesterday’s long at 198.70 for 8 pts. This despite a decent day for TSCO with much of the FTSE down. Reasons: In view of the uncertain macro-climate it’d be complacent to assume we’ll avoid further dips. Otherwise I’d hold for longer. This way no regrets. Frankly, I’ve made more than my fair share of poor calls recently. In context, booking any quick gains seems only sensible. Still one long left at 198.50 for higher targets. - GLA.

jackdawsson 02 Jan 2019

Long at 198.50 SaraRacano: First of all I think the point we both have problems with is yourself, views Tesco as a growth stock, you still see Tesco on the left hand-side of the bell shape curve, thus deserving on a high p/e. I however, view Tesco, as being on the right-hand side of the bell shape curve, I view Tesco as a mature, income stock (not much growth left) which is no more deserving than a p/e of 8-9 with a prospective yield of 5%-6%. Tesco to me having a p/e of 20+ looks incredibly over-priced. Sara, Thanks. I don’t disagree with all you say. Most retailers are seeing unprecedented challenges. Many will never recover. The sector is indeed in a bear market. Other disagreement par for the course. It makes the market what it is. Hence stocks get oversold or overbought. Most trades now algo-driven. HFTs exacerbate volatility. Perception of fair value gets muddied. Sentiment increasingly a main driver, rather than fundamentals. If premium stocks like AAPL miss targets, regardless of profits declared, SPs fall. Forward guidance is key. In the ongoing chaos, it’s important not to chase markets, unless one sets out intending short-term or day-trading. As far as I can see, TSCO’s P/E was 20+ when its SP was higher. At least over 250+. But I take your point. No-one would be so foolish as to rule out TSCO going sub-100 at some point. Nor another major recession. But former is unlikely in isolation. It takes a few precipitators in unison for something on the scale of 2008. For whilst some global markets are certainly flirting with bear territory, IMO, the selling seems overdone. That is, principally on fears of Trump escalating trade wars with China & Brexit here. Unlike 10 years ago, employment remains high, wages growing, rates low, financial sector is far better capitalised, house prices aren’t tanking (yet!) &, not least, we have trillions of dollars in QE (US is key to global economic confidence) underpinning global economies. Huge differences from 2008. As stated, main reason I’ve bought & added TSCO is technical. Chart shows strong sentiment-driven bounces from support levels. Fundamentals were secondary. But TSCO saw 11 successive quarters of rising sales despite growing price wars & competition. That they failed to beat analyst expectations in October doesn’t, IMO, negate all underlying progress. I agree TSCO & other food retailers have limited growth. Many FTSE stocks face the same. High leverage, huge pension deficits, poor growth prospects. To be confident is not to be complacent. I’m confident that some worst-case fears around major UK food retailers were overdone. Hence they’ve subsided. Lidl & Aldi also can only cut prices by so much. For eg. Aldi earned 5.10 pence profit for every pound spent in 2013. By 2016 it was 2.42p & falling. (Source Reuters). As long as populations continue growing, stocks like TSCO are likely to enjoy bullish spells, along with reversals. I’ve bought mindful of falls from 266+ highs seen only months ago & signs of support around these levels. Volumes also lower recently, suggesting more so retail selling. Mind that I’m no investor, unless enforced into holding longer-term when trades go wrong. But that’s nothing new for me. When we can control nothing other than when we buy or sell, I stick by what’s worked for me over time with real shares, with rare exceptions. As long as i’ve bought well below L/T resistance levels, I avoid being led by herd behaviour or sentiment. Most of it is as irrational as it is temporary. - GL.