Archive for the ‘Tesco’ Category

Tesco Turmoil continues…

Posted: October 24, 2014 in General, Tesco

It seems a very fortunate decision that I sold out of Tesco (TSCO:LN) while still in profit (albeit for personal reasons other than investment prospects).  Admittedly things were choppy even back then, but I’m sure nobody apart from those involved could have second guessed the sheer scale of events and pace of decline in recent months. I was prior to these recent revelations, even optimistic over longer term prospects.

That for me however has all changed anyway. Partly due to a few years of UK economic tightening, and partly due to the efforts by the budget chains to lure a broader spectrum of customers in, with keen pricing, and premium budget offerings.

While Tesco remain an economic gargantuan, I think we may be in for a long period of decline in market share for all the big three. Why? Well in my opinion it is now clear that the UK supermarket sector has evolved fundamentally. The  previous habitual shoppers, faithful to a single store and doing a weekly shop are all but gone, and replaced with nomadic grazers, favouring to spend at the budget chains for the majority everyday items, and visiting premium supermarkets for what remains.  In my opinion this trend is noticeable in the re-balancing seemingly taking place in market share, between the big three and the rapid rise of the budgeteers like Aldi and Lidl. This trend I think will remain set for years to come I believe.

How this will translate in future sales and the bottom-line for the likes of Tesco in the next few years will be critical.  Certainly I’m going to watch with interest, a turnaround I think is an incorrect terminology, we are surely talking in terms of halting a decline.

From an investors perspective,  opportunities will surely present themselves during this transition. I’m just not sure I’m going to be rushing back anytime soon.

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After having started the year with the intention of adding to the portfolio rapidly, specifically to broaden my risk I added Beazley (BEZ:LN) Lloyds (LLOY:LN) and Monitise (MON:LN). Have been happy with at least two of these purchases, and this years’ experience (so far) has only been soured by a stalled price for Lloyds (LLOY:LN) meaning I am carrying a small loss.

However since then I have almost had to have a Fire Sale type situation and have had to sell a percentage of the portfolio for home improvements. So out have gone my holdings in Legal & General (LGEN:LN) Barclay’s (BARC:LN) and Tesco(TSCO:LN) had to go as it crossed the Stop-Loss threshold. Fortunately on this occasion it was a smart move, as Tesco is languishing at just below 300 at time of writing. Longer term I may yet buy back-in but with the falling profits I can’t see how the generous dividends can continue much longer.

Looking at the year ahead for my personal investing journey I have the prospect of having to purchase a new car this year, and funding two overseas holidays, so my stock market ambitions are likely to be limited to one or two further additions this year. Sometimes life just gets in the way.

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Tesco Turmoil…

Posted: October 3, 2013 in RusPetro, Tesco

The headlines may seem bad, but if you dig deeper into the latest results there are no big surprises in Tesco’s (TSCO:LN) release of the latest quarter’s results.  In fact they are more or less on the median of analyst expectations.

Judging by the investor’s reactions to the new release that day. Which aside from a kneejerk fire sale, fast stabilised and clawed back most of the lost ground. There is little reason to overly be concerned at this moment I think.

I am not convinced that the £1bn investment on UK stores is having as big an impact as many would have liked (flat like-like sales), this has to however be considered against the economic background, and I don’t think the competitors results (not including the small players) have been particularly spectacular either.

While I really don’t see any major issue looming, I equally don’t see any kind of overreaction and a reason to stock up on Tesco. The jury on the recovery plan could be said to be firmly still “out”.

For now I think I will sit fast and observe.

On a separate note, I notice that Ruspetro (RPO.L) has finally clawed back some of its losses on my porfolio’s balance.  Still a long long way to go before I can jump off with any kind of profit though.  If indeed that day will ever come.  My ever present reminder of why a stop-loss is vital (along with the discipline to follow it through).

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