Future of tesco, morrisons

planteria

Midas wrote: »

It looks to me like these Tesco shares are getting pretty cheap. I'm thinking of having a dabble if/when they hit 250p. Is anyone else looking to buy in, and if so what is your target price?

i have held Tesco and Morrison in the past. and i am continuing to watch the sector. i haven't invested this year's ISA allowance yet, but there are other companies and funds on my radar too. if it keeps becoming more competitive, i would like a slice of UK Grocery pie... at this stage i think Morrison is the more appealing. currently 7.67% yield against Tesco's measly 5.82%;)

Thrugelmir

planteria wrote: »

at this stage i think Morrison is the more appealing. currently 7.67% yield against Tesco's measly 5.82%;)

Don't invest on the basis of yield alone. Grocery market is undergoing fundamental change. One of the bigger players is going to get hit badly at some point.

buglawton

I think Tesco will shrink some of it's monster out of town stores and either sublet to other businesses or change use to housing. Re-check their annual report and see exactly what the property portfolio looks like. I assume Tesco owns a lot more in the SE of UK while Morrisons is more North.

buglawton

Here's a Tesco example in London
http://www.theguardian.com/business/2013/sep/01/supermarkets-live-over-the-shop
You'd be surprised at the eye-watering prices of the apartments in the picture at the above link.

planteria

i sha'n't do Thrug.

and interesting buglawton. supermarkets developing mixed-use schemes is an interesting idea, and no doubt it will suit planners. this isn't a new story, but the trend is set to continue. as it happens, one of my customers, who owns a garden centre, has redeveloped his 10acre site to include a smaller garden centre with larger indoor space, which he has let out to a group, and is building houses on the remainder.

i am not up-to-date on the figures, but relatively-speaking Morrisons were owning more of their sites freehold than Tesco, who were partnering with British Land who were buying the sites. there is a logic that a retailer should do just that, and concentrate on using their cashflow for their retail business. but with structural changes such as these, with moves to maximise the profitability of their sites, are Morrisons actually in a really good position?? i know that Morrisons are more vertically integrated too, with more packing, processing and production facilities than their competitors.

2010

250.70p at close today.
Don`t try to catch a falling knife.

PenguinJim

Midas wrote: »

It looks to me like these Tesco shares are getting pretty cheap. I'm thinking of having a dabble if/when they hit 250p. Is anyone else looking to buy in, and if so what is your target price?

They wavered earlier, but just touched 249.00.

Are you in or out?

chucknorris

Rob_192 wrote: »

Not bloody likely! Do you realise how much you pay in fees for something you could equally achieve through owning a portfolio of shares with proper diversification.

My portfolio has on average cost me less than 1% in initial purchase costs (share dealing fees and stamp duty) and costs me almost nothing to hold thereafter.
R

I pay 0.29% at fidelity, it would be 0.64% but I get a discount for having over £250k with them, but it's 1% at Halifax (but no longer use them, but I haven't moved my old ftse 100 tracker from years ago).

planteria

Tesco up to 5.88% and Morrison up to 7.73%:)

as things stand though, i think i still fancy adding to Glaxo and/or buying Unilever or Diageo instead.

2010

PenguinJim wrote: »

They wavered earlier, but just touched 249.00.
Are you in or out?

246p now, anyone dare to think the bottom`s been reached.;)