Tesco shares...

planteria

flashnazia wrote: »

I thought mrw cut the dividend in favour of lower prices?

so is the current 6.5%div not right, going forwards?

lalman

I have just bought tesco shares at 283.95 a share (well a few days before the results were out). I bought for a few reasons:

1. I dont change my supermarket generally... but rather go to the one that is closest to the one i live too. Tescos normally has the best locations.
2. Its huge still and the share price seems to have factored in to much pessimism.
3. Everyone is saying its the end of tescos but there online presence is 50% or more of the market and has a definite lead over the competitors. I wouldn't invest in Morrisons for this reason.
4. It still makes huge profits and the dividend yield is above 5%. How much lower can it actually go? you can't argue to me that its a higher risk than Greece!

So yeah. Bought 4k worth... hopefully will make a 20% profit on them and sell up before the market eventually tanks when it realises QE just inflates asset prices.

Glen_Clark

lalman wrote: »

when it realises QE just inflates asset prices.

Do you think they haven't realised that already?

planteria

im with you on your Tesco logic lalman,
but if that is your call re. QE i think i would be getting out of equities altogether.

yatinsardana

That is a worrying call to make lalman. Although I suppose looking at the charts, we are due a market crash... Never experienced one before but I would've thought market prices would show more hysteria and volatility.

grey_gym_sock

your logic for buying is not too bad.

targeting a 20% profit before selling doesn't make much sense. the ordinary ebbs and flows of the market can give or take that kind of profit/loss quite easily.

you can't expect to predict when the market will crash, or what the trigger will be. everyone and his dog thinks that QE will have something to do with it. for that reason, it will more likely be something different, or at least will involve some unexpected twist.

i hold tesco, and mainly think of it as a boring share, which will keep churning out profits, with growth prospects in some parts of the business, so OK to hold for many years. it does look a bit cheap now. (i think i have enough, so probably won't buy any more.)

planteria

i think that's a very fair assessment ggs.
how do you assess Morrisons as an alternative?

Alex2011

flashnazia wrote: »

On dividend alone it looks attractive but Phillip Clark concerns me. One man can't run the show.

Phillip Clark need to go as he can't even run the show with full team, example of results for last and this year. I personally think he is not right person to run company and therefore he need to go and without any bonuses.

Scarpacci

A rather pessimistic analysis of Tesco shares over on Seeking Alpha: http://seekingalpha.com/article/2218563-the-erosion-of-tescos-economic-moat Interesting read.

kinger101

Although Tescos and Morrisons do appear to be losing market share to Aldi and Lidl, my prediction is that fewer people will use this discounters once wages start to rise in line with or above inflation. Despite everyone trying to pretend that quality is good at these stores (sometimes it is, but generally it is sh1te), you can't get away from the fact that Aldi et al stock fewer lines, and are less innovative than the major supermarkets. I also don't understand why half of their floor space is used to sell low-end tat. Once people feel they have more disposable income, they'll be returning to Tesco, so I think it's a good buy at the moment.