The Lemon Fool

Itsallaguess wrote:Is that level of yield an adequate reward for the strong and risky head-winds facing this sector?

I'm not convinced...

Cheers,

Itsallaguess

simoan wrote:You're asking the wrong person, unfortunately. Nothing would make me ever invest in such a business, even in good times the profitability is poor! It's no wonder the share price is pretty much where it was 20 years ago.

Itsallaguess wrote:Sorry Terry, but I think you've got the wrong end of the stick - the above outlook statement is forward looking (although again, any talk above of 'outperforming the market' gets me back to the best-looking dog in the ugly-dog competition...), but there are various analysts mentioning that Tesco didn't meet Q1 expectations with their RNS release yesterday, and one half of those like-for-like figures is shown in the Q1 statement linked above -

UK: Ongoing support for customers in challenging times; further improvement in market share

• Market share growth of +37bps(3), outperforming on both value and volume

• Overall distribution of Aldi Price Match and Low Everyday Prices products up c.19% YoY

• Maintaining largest improvement in quality & value perception of any food retailer in the market vs pre-pandemic

• YoY performance impacted by annualisation of lockdown last year, most notably in GM, clothing and online, partially offset by inflation

tjh290633 wrote:
I think that the point which you are missing is that there has been a lot of price cutting to maintain market share.

Consequently the turnover in Q1 is reduced, but they have held their share of the market.

The emphasis on Clubcard prices, and the 10% off 2 big shops each month retains custom. Their Price Match with Aldi also has an effect.

CliffEdge wrote:I've never bothered before but I recently got a Tesco club card. I got a box of roses chocolates for two pounds instead of three pounds.

CliffEdge wrote:
I've never bothered before but I recently got a Tesco club card.

I got a box of roses chocolates for two pounds instead of three pounds.

tjh290633 wrote:

Itsallaguess wrote:Sorry Terry, but I think you've got the wrong end of the stick - the above outlook statement is forward looking (although again, any talk above of 'outperforming the market' gets me back to the best-looking dog in the ugly-dog competition...), but there are various analysts mentioning that Tesco didn't meet Q1 expectations with their RNS release yesterday, and one half of those like-for-like figures is shown in the Q1 statement linked above -

I think that the point which you are missing is that there has been a lot of price cutting to maintain market share. Consequently the turnover in Q1 is reduced, but they have held their share of the market.

The emphasis on Clubcard prices, and the 10% off 2 big shops each month retains custom. Their Price Match with Aldi also has an effect. Read what they said:

UK: Ongoing support for customers in challenging times; further improvement in market share

• Market share growth of +37bps(3), outperforming on both value and volume

• Overall distribution of Aldi Price Match and Low Everyday Prices products up c.19% YoY

• Maintaining largest improvement in quality & value perception of any food retailer in the market vs pre-pandemic

• YoY performance impacted by annualisation of lockdown last year, most notably in GM, clothing and online, partially offset by inflation

TJH

simoan wrote:

MDW1954 wrote:Consensus estimates, in my view, are rarely an indicator upon which it is worth placing much reliance.

MDW1954

I take your point, but in deciding what the future may look like it's not something you can completely ignore either as the estimates are often based on information provided to those who have direct access to management, unlike us retail punters. To that end, please could you explain how you get a prospective yield for FY23 of 4.8%? That would imply a dividend increase of 10% over FY22. I believe the accuracy of this metric is kind of important for this forum! My own data source (Refinitiv) shows the consensus is not expecting much by way of a rise in the dividend. What data do you have that is better than the consensus dividend estimate?

BTW I found the trading statement hopeless. Sales are vanity, profit is sanity. And not one mention of margins or profits! Other than to state profit outlook is as previously advised, which is for a 13.7% fall in EPS.

All the best, Si

MrFoolish wrote:

MDW1954 wrote:But at least today's results means it is not on the "uninvestable" list, unlike (say) GSK or TATE.

MDW1954

Why do you say GSK and TATE are uninvestable?

Dod101 wrote:There is a lot of nonsense on these Boards.

Dod101 wrote:Apart from the fact that neither Tate nor GSK has got any relevance to Tesco, I would not say that the MDW comments indicate that either share is ‘uninvestsble’ There is a lot of nonsense on these Boards.

Dod

csearle wrote:

Dod101 wrote:There is a lot of nonsense on these Boards.

There is probably a lot of nonsense and a lot of sense spoken in general. Some of it on boards and some of it more privately. I feel that the advantage of saying things publicly on boards such as these is that healthy disagreements can be seen and explored, so adding much perspective for many to it all.

It it a testament to all contributors here that we can have these discussions in a wonderfully civilised manner regardless of our individual viewpoints.

Vivat in lemon!

Chris

MDW1954 wrote:

Dod101 wrote:Apart from the fact that neither Tate nor GSK has got any relevance to Tesco, I would not say that the MDW comments indicate that either share is ‘uninvestsble’ There is a lot of nonsense on these Boards.

Dod

Dod,

I was responding to a direct question that I had been asked by another poster. What would you rather have me do -- ignore it?

My reply made clear that my comment about "uninvestable" was in relation to income-seeking HYP investors, who have expectations of continuing and rising annual dividends.

Given that both companies have openly declared that dividends going forward are likely to be smaller than dividends today, what is it, precisely, that makes you feel that these two shares are now attractive to HYP investors?

MDW1954

Dod101 wrote:Uninvestable to me anyway means that we cannot value the share or at least find a common level for it. Most shares are investable one way or another.

Dod