Tesco 🛒 (TSCO) Share Chat

Interesting. Is it worth the long term investment?

Looks like basically free money at this point at 50p a share. Might load up £2k on isa.

Would appreciate any discussion points.

Well this dividend is coming from them selling their Asian businesses yes? You can find articles from all the way back in 2015 explaining how they failed to even do their research on adapting and integrating into the Asian markets - China in particular, apparently has some serious culture clashes. (and they failed in Japan in 2011 as well, so this is a long-term issue they’ve had.)

So, negatives?

It is a company that tried breaking into new markets and completely failed, multiple times.

The failure was down to their arrogance in failing to do due diligence and to adapt to new cultural divides.

This isn’t a new problem - they failed in the USA of all places before they jogged onto Asia.

It is unlikely they’ll try expanding there again in the near-term or even the long term tbh.

So you’re getting a predominantly British stock in a predominantly British market, where it could be argued the bigger future players may well be Aldi/Lidl (as usual) and they may be the bigger beneficiaries post-Brexit and post-COVID as furlough ends, people tighten their belts and head for bargain shopping rather than Tesco’s fairly overpriced offerings (IMO, I know they price cheapest in comparison sites etc).

Really, I’d put money into them if I think they’ll corner the British market for the forseeable future, which is probably likely, but I would be keeping an eye on Aldi/Lidl, and you would steer clear of them if you’re expecting them to grow into a global brand, as they’ve failed on those counts. (They do have some holdings in Eastern Europe, but they withdrew from France for yet another failure, so who knows how long this venture will last?)

That’s my very bad five minute research blurb, as always disclaimer; Not advice, do your own research, I may be wrong and biased and so on. :stuck_out_tongue:

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Rob, now I understand what kind of things I should look out for!

Thank you very much for your contribution! :relaxed:

You have to be careful here!

It is most assuredly not free money since the spec div is immediately followed by 19/15 consolidation.

This means that roughly the value you earn in dividends will be lost to the consolidated shares. Supply demand non withstanding afterwards and who knows what happens to share price but please consider this point.

As for Rob’s assessment of the company as a whole
I disagree both with the points made and with the tone but the end game here isn’t so much to find truth but value.

We know the following

  • tSCO is a company that is profitable and distributing. (Self evident)
  • Their price is not that volatile.
  • they are covering future liabilities (part of the Asian sale is bolstering pensions)

We can reasonably infer the following

-Their network is expanding. (Recent shop openings)

  • Their employee base is expanding. (Recent hires)
  • They are coming out of areas that don’t make sense for them (Asian sale, banking etc)

and in my view their current price is below fair value.

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Perfect. I understand the 19/15 consolidation. Thank you.

My statement was mostly on the consideration that the price will increase. At least in their earnings disclosure in April? April isn’t it?

Also, This concept of fair value… Is there a way to assess this please? any websites / blogs works on this for various companies?

Thanks :slight_smile:

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So “fair value”… literally encyclopaedia sized tomes have been written on the subject. And just about every
findata site or
analyst or
advisor or
punter or
Academic or
Book or
Accountant
you come across will have a different formula to calculate same.

It boils down to what you know and what you believe will happen but I am more and more convinced these days that there is too much distortion in the way instruments are traded to make it a “holy grail”.

For me it’s more about what I want to pay versus what I’m receiving (dividends volatility etc) so I am making an assumption that “price x” is over or under my personal target based on where I think the price should be. Make sense?

As for Tesco’s reporting have a look at the following link

https://www.tescoplc.com/investors/financial-calendar/

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Disagree. Tesco has been very successful in several international markets. It’s exit from the Asia follows an investment that began with an £110m acquisition in 1997. Cashing out now for £7.8bn as arguably the price is simply too good to turn down seems like good business for shareholders. It also still has profitable businesses in Eastern Europe.

Much has been made about Tesco’s failure in the USA - a corporate mis-step without doubt and the leadership at the time we’re caught trying to spin too many plates but in the scheme of things Tesco cut and ran before it became a bigger enough drain to undermine the entire business.

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Thank you :relaxed:

Walking into a Tesco store, I avoid at least 15 entire isles of ‘food’ and other junk as though they do not actually exist.

Would love to see Tesco’s business model profits - minus the isles of absolute processed junk used to create growth.

What gets me even more is the absolute amount of hundreds if not thousands of consumer products in plastic bottles with ‘chemical this’ & ‘chemical that’. Isle’s upon isle’s of 400 different shampoos. It’s so unsustainable.

This is interesting from their investors:

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A reminder as I’m sure there will be more threads on this

https://www.tescoplc.com/investors/shareholder-centre/shareholder-meetings/

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When will the share soli be reflected in my portfolio?

Read all this with interest and thought I might as well go grab some shares, only to find out this isn’t even listed on the app :frowning:

Edit: I now see that this just isn’t available to today due to the consolidation, oh well no nice dividend for me, need to come on here frequently from now on.

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It should hopefully be re-enabled very soon (as I’m today/this morning if freetrade are on the ball)

Cool, will keep an eye out, as long as I buy today would I still be that higher dividend or did I need to own coming into today?

You needed to have already bought in

Oh well, maybe next time then, thanks for clarifying.

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Consolidation now updated on Freetrade.

Anyone showing an incorrect price movement for today? Im not sure the % change is being calculated correctly.

Looks like it’s being skewed by the consolidation but the price per se hasn’t changed the one it seems to be showing for me int the app

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You aren’t missing anything. The value of everyone’s share holding will reduce by the amount of dividend. The consolidation is just so that the share price stays approximately the same despite the overall value dropping.

If you did buy before the dividend then you’d be paying stamp duty just to have a proportion of your money returned to you.

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Oh right, good job I missed out then cos I clearly hadn’t been paying enough attention.

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