Future of tesco, morrisons

CLAPTON

yatinsardana wrote: »

On the other tesco forum it appears someone mentioned that morrisons are cutting their dividends though? I don't know if it's true or not but if it is, it may be an important factor.

Tesco have a really good dividend record so don't expect them to cut their dividends

If we can have some clarity over morrisons future dividend prospects then on the basis of the current yield itself it may be a risky long term buy.

it's the future profits that matter

Glen_Clark

yatinsardana wrote: »

If we can have some clarity over morrisons future dividend prospects

My crystal ball it a bit cloudy.:o
But I do hold Morrisons shares. The 'professionals' are no longer shorting them and are still talking the share price down. Maybe soon they will have bought Morrisons shares and will be using Morrison's property portfolio to talk the share price back up again

planteria

agreed. i queried the comment re. Morrisons dropping the dividend.
and yes, agreed re. the 'professionals'.
there is still a lot of money made in producing, packing, distributing and selling food in supermarkets, that we go to collect. arguably, Morrisons are the best in the business.
and yes, the property portfolio is worth more than the market cap, apparently. they own more of their supermarkets than their competitors....i have a friend who argues that is not wise....but for me, that underlying asset is worth something.
i hope they keep talking Morrisons down to a 7%+ dividend, then i can buy back in;)

Glen_Clark

planteria wrote: »

they own more of their supermarkets than their competitors....i have a friend who argues that is not wise

Conventional 'wisdom' is that renting makes them more flexible - to close or move stores.
But in practice it can be just the opposite. Some stores in my local high street are obviously doing very little trade but they are tied into a lease so they have to pay rent for so many years whether they occupy the store or not.

Wilkins

planteria wrote: »

but for me, that underlying asset is worth something.

MRW appear to be trading at their NAV (and SBRY not much above). So, if they dropped 10% you would have a Grahamesque margin of safety. Might be worth buying then for the putative break-up value . . . if you trust asset valuations.

yatinsardana

Wilkins wrote: »

MRW appear to be trading at their NAV (and SBRY not much above). So, if they dropped 10% you would have a Grahamesque margin of safety. Might be worth buying then for the putative break-up value . . . if you trust asset valuations.

Can I ask how you calculated that as I don't know how to. I read an article suggesting that including their property assets, their asset value is much more than the market valuation.

This is completely off my memory from a few days ago but I think I remember reading their asset value being around 37b
And market valuation being around 31b

I might be completely off right now having not even checked their market valuation but I think those were the numbers.

EDIT - ignore those numbers I said. Think they're wrong

Wilkins

yatinsardana wrote: »

Can I ask how you calculated that as I don't know how to.

Net assets = £4.692 bn, shares in issue = 2.34 bn, so
NAV = 4.692 bn / 2.34 bn = £2 approx.

Yorkie1

I've a colleague who has a second job as a Tesco dotcom driver. They've cut their delivery costs at certain times of the day in response to the new threat from Morrisons' entry to the online delivery market. He says that this is seen as a significant threat to Tesco's market dominance.

alanq

Yorkie1 wrote: »

They've cut their delivery costs at certain times of the day in response to the new threat from Morrisons' entry to the online delivery market. He says that this is seen as a significant threat to Tesco's market dominance.

Reduced Tesco delivery pass charges / minimum purchases from 23rd April according to this thread.
https://forums.moneysavingexpert.com/discussion/4951486

This confirms what I had assumed about Tesco's announcement. I also assume the threat from Morrisons was the reason that ASDA has just introduced some £1 midweek delivery slots.

All good news for customers if not investors.

ETA: New Tesco delivery charges from 23rd April
http://www.tesco.com/deliverysaver/

Wilkins

As I understand it, Morrison's will use Ocado technology for their deliveries which might be good for them. In our experience, whilst Ocado deliveries are packed by robots, Tesco's are packed by idiots.