Saturday, January 14, 2012

Investor fickleness

Not that I've never been a fickle-minded investor myself ... but I thought it'd be interesting to put the latest Tesco saga into some perspective.

Looking over at the Morrisons board, I can't see many negative comments. Here's what someone said on 06-Dec-2011:
I'd agree with that around the heartland of Leeds / Bradford too, stores are notably more busy than usual with queues despite adequate amounts of checkouts being open.
I had to go back to 24-Nov-2011 to see anything especially negative:
I feel he will destroy rather than create shareholder value, in his pursuit of copying the worst bits of Tesco and Sainsbury
 Sainsbury's had no special comments on it either, so I'll skip that.

 Now look at the Tesco's boards. Although there are of course positive comments, there are many negative ones:
they have pushed, shoved and stamped on everyone in the way
 They're bad bast*rds and should all be hanged
 Another example of poor UK corporate and political governance
 has Mr Buffet got it wrong this time
they have been replacing well known brands with their own not much cheaper inferior brands
You get the idea. There are some positive posts, but they are almost all uniformly negative, pointing out it's a defensive company, and so on. There are also references to Anthony Worrall Thompson, but I'll regard those as an irrelevancy.

Rewind to August time, before the recent RNS which caused a massive decline in the stock, and people were talking about:
their real growth focus is overseas, particularly Asia, rather than in the UK.
and Citigroup notes:
A supermarket price war might be just over the horizon ... Tesco is now 30% more expensive than Aldi ... We believe the current situation is unsustainable.
This share is a dog
Well the jury is still out on the macro issue but, more specifically, TSCO is heading lower and the next question is whether it will breach the two year closing low of 360p which it touched a couple of weeks ago. In my view there are management questions, strategic developments and competitive issues which are current factors that are also impacting sentiment here too
 Tesco plc (LON:TSCO) shares are due a rebound
Goldmans and Nomura out this morning reiterating their 'buys' and 500p TP while Citi retaining 'sell' TP 385p
 Actually, the above comments surprised me. I had expected them to be more positive.

It's noteworthy that a clutch of analysts downgraded TSCO when it announced the UK LFL fall, and the share price has plummeted over 15%.

Also noteworthy is the fact that over the last 3 years, TSCO has declined 13%, whilst the Footsie has risen 27%. Patience isn't always rewarded.

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