UK supermarkets vs German discounters: Morrisons gets tough as Buffett attacks Tesco October 2, 2014 Britain’s embattled supermarkets have finally begun their fight back against German discounters Aldi and Lidl who have been eating their lunch in recent months with double-digit growth in the sector. Morrison, the UK’s fourth biggest supermarket, will launch its first customer loyalty card today, along with a price-matching scheme that its chief executive has labelled [...]
Sports Direct now owns 11 per cent of Debenhams October 2, 2014 Sports Direct has just upped its exposure to underperforming department store chain Debenhams, buying a further £33m-worth of shares. The move comes months after the Mike Ashley-owned retailer took its original punt on the high street business, which was ultimately converted into a put option valued at £64m. The new investment equates to a 4.6 [...]
Warren Buffett admits he made “a huge mistake” on Tesco as share price tumbles again October 2, 2014 Warren Buffett has admitted making a “huge mistake” by investing in Tesco, as the supermarket's share price continued to fall today. The legendary investor, and second richest man in the world, is currently the third largest shareholder in Tesco, through his venture Berkshire Hathaway, which owns a 4.1 per cent stake. He first [...]
Best of the Brokers for 02 October 2014 October 1, 2014 To appear in Best of the Brokers, email your research to notes@cityam.com ROYAL MAIL UBS has upgraded to “neutral” from “sell”, but cut the target price to 400p from 450p. The broker believes Royal Mail is no longer significantly overvalued now, with near-term earnings estimates more realistic, but cautioned on modernising challenges and tough trading [...]
Tesco, Sainsbury’s and Morrisons: Have investors given up on supermarkets? October 1, 2014 Tesco's share price has fallen 3.4 per cent today. Wm Morrison's has declined by 5 per cent. Sainsbury's share price tumbled 6.6 per cent. Although they operate in the same sector, each of these three supermarkets is suffering its own problem. So what is happening? Tesco's well documented £250m black hole in its [...]
HMV returns to profit as Hilco rescue pays off September 28, 2014 HMV IS set to announce nearly £17m in operating profits during the 11 months after it fell into administration last year. Between 29 January and 28 December 2013 the music and DVD retailer saw sales of £311.2m, with its owner Hilco reporting every one of HMV’s stores is now profitable due to its restructuring programme. [...]
Tesco’s week from hell: £250m black hole, 16 per cent fall in share price since Friday September 26, 2014 Was this the week Tesco hit rock bottom? Having discovered a huge black hole in its finances, shares have fallen from Friday's closing price of 229.6p, to a low of 191.23p in early morning trading today. That's a fall of almost 17 per cent. Here's a handy, cut-out-and-keep guide to Tesco's week from hell Monday [...]
Sports Direct’s share price tumbles after Tesco investment September 26, 2014 Shares in Sports Direct were down again this morning, following founder Mike Ashley's decision to take out a put option on Tesco yesterday. The retailer's share price has reached a low of 610p, having opened at 636.5p. It continued a tumble that started yesterday, when shares reached a high of 670p. Is it [...]
Sports Direct makes bet with stake in Tesco September 25, 2014 MIKE ASHLEY has made a £43m bet that shares in ailing supermarket Tesco will bounce back after the discovery of a £250m black hole in its accounts sent shares tumbling 16 per cent this week. The billionaire’s retail empire Sports Direct has entered into a put option agreement with Goldman Sachs over 23m shares in [...]
What is a put option and how is Mike Ashley using it to bet on Tesco? September 25, 2014 Mike Ashley's Sports Direct has taken a punt on Tesco by entering into a put option agreement with Goldman Sachs. But what exactly is a put option and how is he using it to make money? In short, Sports Direct is selling the option to Goldman, meaning that if the share price goes up, [...]