Tesco Shares

grey_gym_sock

Glen_Clark wrote: »

Tescos problem, as a middle of the road retailer, is that as the gap between rich and poor gets wider, Tescos rich customers are going to Waitrose, and their poor ones going to Aldi & Lidl

it's a problem, but it's not the kind of problem that might make the share price drop by 90%.

they can also do things about it, i.e. adjust their range to match what their customers want, or what their competitors are doing.

and since supermarkets manage to sell cheaper and more expensive versions of the same product, they may not have to choose between targeting richer or poorer customers.

thegrind

If your investment causes you to lose sleep or worry about the state of one company then its time to divest and diversify, it doesnt matter what asset class your in Residential property, equities, commodities, bonds or funds that maybe hold all these types. Putting all your eggs in one basket is investment suicide. Id much rather have lost 10% of my portfolio than starting from square one.

Another piece of advice "DO NOT FALL IN LOVE WITH A COMPANY" They are there to provide a return/growth, that is all.

donny_jim

these saye saving schemes are v. good, as you get the shares at the price they were when the scheme started. if the share price has increased take the shares. then sell half and invest in another sector, my choice would be lloyds they are getting better. or vodafone

sabretoothtigger

Nope, do not deal single shares unless you really like spending hours investigating them. Your average punter should treat it like horse racing, not many kid themselves they'll know the winner by the name but with shares especially brand names we think we know them.
Do a unit trust which has a hundred or more and its massively less risky. Still can go down but its a step away from gambling much closer towards investing

opinions4u wrote: »

I was lazy / greedy and held on to them. They lost 98% of their value.


The supermarket sector works on narrow profit margins v turnover. All eggs in one basket is rarely a good idea.

Lloyds is not down 98% anymore. Im not convinced they will stay down permanently, I think a return to some of the 2008 prices are possible eventually if they restore a working bank model and hold now a significant increase of market share over last decade


I do have some Tesco, they are disappointing but this is a recession I think. Their top guy left some years ago, I might have sold at the time had I watched it closer.
I disagree they are a simple case, even as a plain supermarket you have to consider land prices as they hold so much.
They are diverse enough (& innovative?) to get past singular risks, not as risky as most shares I reckon

grizzly1911

Thrugelmir wrote: »

Tesco's has a far broader base than it's competitors and it's started to diversify. One added attraction is that it's the largest property company in the UK.

I read somewhere that some of their large extra stores were not getting footfall/sales per metre and they were going to install gyms and such like. Not sure if they were to be franchised/sub let or handled directly.

We have a massive one about half an hour away and it often seems empty and the car park half full.

I believe they have lost their way and are no closer to finding it. They aspire to be Waitrose but have their mits are in too many pies.

With regard to the OP take what you can get at reduced prices but regularly divest, within (CGT limits) and spread your investments as others have said.

Ifts

Glen_Clark wrote: »

Tescos problem, as a middle of the road retailer, is that as the gap between rich and poor gets wider, Tescos rich customers are going to Waitrose, and their poor ones going to Aldi & Lidl

I read something similar yesterday regarding Tesco:

Broker snap: JPMorgan says Tesco feeling pressure from Aldi, Lidl

By Benjamin Chiou
Date: Wednesday 25 Sep 2013

LONDON (ShareCast) - Supermarket group Tesco was hit by a downgrade on Wednesday by JPMorgan Cazenove from 'neutral' to 'underweight' after the bank said that the company will be the most affected by structural problems in the UK food retailing industry.

"The discounters (Aldi, Lidl) are disrupting the price/range architecture that the 'Big 4' used for two decades, the customer is demanding a simplified product range, and there is a need for reduced mid-tier pricing," said analysts Jaime Vazquez and Borja Olcese.

"With Tesco's initiatives having had limited success, weak like-for-likes, and margins persistently above peers', we think Tesco is more likely to go through a painful rebasing of pricing and the gross margin (synonymous to a profit warning)."

JPMorgan's proposed solution to Tesco's problems is to simplify product ranges to offer the best possible price/quality combination, whilst avoiding range extensions aimed at maximising basket cost and gross margins.

"We believe that value ranges have become largely redundant as Aldi and Lidl have improved the quality of their offerings and should therefore be downsized or abandoned. Furthermore, we think the price of the mid-tier, own label should be reduced."

The analysts said that this strategy has worked for Leclerc in France and Mercadona in Spain which stalled the growth of the discounters in their respective markets.

Tesco's target price has been reduced from 390p to 350p.

The stock was down 2.78% at 363.6p by 10:59 on Wednesday. The share prices of rivals Sainsbury and Morrisons were also lower after JPMorgan maintained its 'underweight' rating for both stocks.

https://www.share.com/find-investments/advanced-finder/company-overview/?pass=1&csi=10091&action=news&story_id=21180224

I hold Tesco shares and intend keeping hold of them for now (decent divi), average price paid ~315p and if they go near that price I will pick up some more. Close to the end of June was a good point to get some when there was a dip in their SP.

opinions4u

sabretoothtigger wrote: »

Lloyds is not down 98% anymore

About 95% compared to HBOS high..

Im not convinced they will stay down permanently, I think a return to some of the 2008 prices are possible eventually if they restore a working bank model and hold now a significant increase of market share over last decade

The highs were driven by excess wholesale funding. No sensible bank will repeat that.

LBG will never be allowed to make significant market share gains without being tied back. It's already too big.

IronWolf

Thrugelmir wrote: »

Tesco's has a far broader base than it's competitors and it's started to diversify. One added attraction is that it's the largest property company in the UK.

Not any more, they announced in their last results that they are stopping building the superstores and wrote off a large chunk of the value of the land held for development as they're going to sell it.

Minrich

Some good thoughts here - Thanks
The option price for Tesco shares is usually 10% lower than the selling price when they release the next option.
We hold alot and at the moment do not feel that Shares is the way to invest due to Savers coverting their cash into Shares to get higher interest rates . A time will come when interest rates will rise and those "Cash Savers" will withdraw , what happens to the prices is unknown but it won't go up .
The holding of the shares are the only ones we have and they are really being bought to give us an income in retirement , Tesco share dividend has increased year on year too. Tesco have had a difficult time but they are attempting to capture a bit of the Far East and indian market , is this good ? It could be fantastic , but thats what we thought when they went into America .
Tesco also get slagged off left right and centre throughout the country and that negative attitude by the public must have an effect on their future . Why is that a UK company gets this bad feeling from the UK ?

Glen_Clark

Thrugelmir wrote: »

Tesco's has a far broader base than it's competitors

that sounds like a disadvantage when customers are leaving at both ends.