Sainsbury (SBRY) Interim Cut

[NeilW]

Looks like the Argos pill needs a lot more water to wash down.

"The Board has approved an interim dividend of 3.6 pence per share (2015/16: 4.0 pence), equivalent to 30 per cent of the previous full year dividend. This will be paid on 4 January 2017 to shareholders on the Register of Members at the close of business on 18 November 2016.
Sainsbury’s plans to maintain a full year dividend covered two times by our full year underlying earnings."

[blobby]

This was no surprise (to me at least) as it had been announced some time ago. See also:

we are committed to paying an affordable dividend, fixed at 2.0 times cover for the full year. Consistent with our policy to pay an interim dividend of 30 per cent of the previous full year dividend, our interim dividend will be 3.6 pence per share.

[Breelander]

They seem quite happy with their new purchase...

We acquired HRG in September, making us one of the UK's largest food and non-food retailers, offering customers a choice of over 90,000 products across a diverse range of categories - food, clothing, general merchandise and financial services. We have now merged our clothing and general merchandise businesses with Argos and Habitat, creating a £6 billion turnover business that is a market leader in the key categories of toys and small domestic appliances and is second in the market for electricals and homeware.

Link: http://www.investegate.co.uk/sainsbury- ... 00096797O/

[Arborbridge]

The cut was flag up in the forecasts on DL. I notice the forward yield has dropped despite the chunky fall it the price today, and that's due to the forecast being lower.

The historic is showing as 4.7% in some quarters, which is why I prefer using forecasts rather than historics - this is a good example. To paraphrase Jmi Slater in a letter to me, "you can fly blind if you wish, but a misty windscreen is better than nothing". I'd say better than a rear view mirror too.

I was hoping for some juicy drops today, but I don't see much which alters the top-up scene which prevailed previously. Tempting to buy some more SBRY, but cannot justify buying at a yield of 4.3% when my average is 4.9%.

MKS is still top of my table, with other possibles like LGEN or Aviva possibles. Greene King is now temptingly bubbling under, but there's nothing resulting from the American weirdness to get the juices flowing this morning.

[Arborbridge]

They seem quite happy with their new purchase...

'scuse me for being cynical, but they would say that wouldn't they?

A few days ago people were worried that the dollar movement against the pound might have wiped out any savings from the Argos takeover, which is why the price is tanking. With the dollar hit this morning, you might expect that feeling to dissipate, but it seems to have become worse.

Arb.

[idpickering]

A disappointing result from SBRY. I hold, and shall continue to do so, but won't top up in the current climate, and with regard to the divi policy.

SBRY down 5.56% as I type.

Link to results as on investigate here;

http://www.investegate.co.uk/sainsbury- ... 00096797O/

[Breelander]

They seem quite happy with their new purchase...

'scuse me for being cynical, but they would say that wouldn't they?

I didn't say that I was happy, did I? Just that they seemed to be - in fact the whole thing read just a little too up-beat for my liking - as if they were trying to convince themselves...

[Dod1010]

As I have said many times, retailers are not a very happy place to be at the moment (and I suspect for some time to come) Morrisons sounds the best of a poor bunch.

Why Marks Arb? They do not know what they want to be and food cannot sustain them. Years ago they opened stores in Hong Kong and other overseas locations only to find surprise surprise that they were unsustainable because they could not survive largely from expat spending. They then closed but have apparently been trying again only to start closing them again. For goodness sake, Legal and General is a much better bet and there is surely no contest?

[idpickering]

Can someone please remind me how the quote feature works?

Thanks

[Arborbridge]

As I have said many times, retailers are not a very happy place to be at the moment

Thanks goodness Dod, now this place seems like home with you back on form

Why is Marks being considered at all? - because it is at the top of my table. Why is LGEN lower down? Because its capital value is higher. That's the way HYPTUSS works, but that does not mean I will buy MKS and not LGEN. Frankly, LGEN seems a better choice to me also, but do I really know? I would allow myself to go overweight on LGEN as I doubt any harm would result.

One of the things one has to be wary of with HYP is that it quite naturally throws up as bargains those shares which are going through bad times. There are moments when you have to simply have faith in the management and the HYP system - or if you don't, bale out. Your criticism of Marks is more or less what I also wrote in another thread yesterday, but one must remember that we are both writing with hindsight. If one has owned MKS for a long time as I have, those fits and starts had not yet happened.

As this is an SBRY thread, I suppose we should be thinking in terms of: do we have faith in their management, which on the whole has been rather dependable over the years. Strange that you should mention MRW as being the best of the bunch because not long ago it was being roundly trashed as having no place in a squeezed market. If one had had faith in the management at that time, one would have made a handsome return to date, with income continuing too.

All very difficult subjects and I never find the answers as clear cut a you do. Overthinking, perhaps.

[Breelander]

Can someone please remind me how the quote feature works?
Thanks

to quote from a post, hit the 'reply with quote' button top right of the post. It will open the editor with the quote already filled in like this...

Code: Select all

[quote="their username"] the full test of their post appears here. [/quote]

You may want to cut out most of their text to just leave in the bit you are replying to.

To add a quote from another source (an RNS of a snip from a news article) click the quote button above the editor. You can either type the text first, highlight it then click 'quote', or click 'quote' first then fill in the text in between the quote tags.

[idpickering]

Can someone please remind me how the quote feature works?
Thanks

to quote from a post, hit the 'reply with quote' button top right of the post. It will open the editor with the quote already filled in like this...

Code: Select all

[quote="their username"] the full test of their post appears here. [/quote]

You may want to cut out most of their text to just leave in the bit you are replying to.

I get it now. Thank you.

Ian

[Dod1010]

All very difficult subjects and I never find the answers as clear cut a you do. Overthinking, perhaps.

I don't find any of this particularly clear cut but I am certainly clear about retailers at the moment, and very clear about M & S. It does not have patches of poor trading and then gets back to normal; it has patches of decent trading, but its norm is poor trading and then relaunching itself.

Sainsbury's self imposed restriction to its dividend does not make it attractive and in all the retail sector is very difficult/impossible to judge at the moment.

Dod

[Arborbridge]

it has patches of decent trading, but its norm is poor trading and then relaunching itself.

Or you might say, not patches but a steady downhill since it was the first retailer to hit £1bn in a year. Not surprising that even a HYP devotees such as myself is beginning to lose faith.

Sainsbury's self imposed restriction to its dividend does not make it attractive

It might, OTOH make it the right time to buy in if you have faith that the management is fundamentally doing the right thing.
I remember that even the mighty Unilever was trashed at one time - before Bart Simpson or Berthold Brecht or whatever his name was, took ever.

And as you pointed out Morrison's is one of the best of the bunch now, but the time to invest in that was a year or so ago when all seemed blackest.

[Dod1010]

Arb

Not to prolong this discussion but I would say you could be right about Sainsbury but I do not think so because the whole retailing sector is in trouble and undergoing such a fundamental change that I do not think any of us can really know where it is going. As you know I am well clear of the entire sector.

Dod