Tesco PLC (ADR) (NASDAQOTH:TSCDY)

CAPS Rating: 5 out of 5

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Player Avatar valuemoneygreen (81.88) Submitted: 7/11/2012 3:55:11 AM : Outperform Start Price: $13.22 TSCDY Score: -75.16

Basically the Walmart of Europe and expanding in other countries.... if you don't understand how awesome of a company Walmart has been you should not invest money on your own......... ever. This is a pick were I am not looking @ short term earnings growth because there will be none. This is a market leader pick.....brand name also. You have a huge dividend while u wait. I am confident this company will be making a lot more money 5 to 10 years from now and the stock price will be way higher also.

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Member Avatar tomlongrpv (76.76) Submitted: 1/6/2013 3:05:44 PM
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Somehow you and I are picking similar stocks, but I have to admit I am not going through your thoughtful analysis. I am doing it more on gut feel and a vague sense after looking at numbers that I am getting good value for the money. I also tend to prefer companies I like (but not entirely, after all I have LO, GS and BP). My thought on Tesco was that it was a conservative play for dividend income and long term growth. I am a little more doubtful about the long term growth given how things ikn the US are working out for Tesco. Your thoughts on that?

Member Avatar valuemoneygreen (81.88) Submitted: 1/11/2013 4:43:19 AM
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Yup Tesco sucks for some reason in the U.S. But overseas it is a different story. Plus you don't need a lot of growth with this particular kind of equity. It is a market leader in the UK. It is expanding in other countries besides the U.S. Plus the price you pay is the most important thing. The price I picked it at it was trading at a PE of 10 which = a bond equity yeild of 10% if you were to buy the company outright. When you purchase a stock always think of your purchase as buying the whole company outright. Read my SYY pitch and read what I explained to JohnCLeven. In terms of TSCDY it is a stable company with some growth and rock solid earnings power even in a recession. You only need 5.5% growth when a stock pays a dividend yeild of 4.5% to make 10% each year on your money. And 2% of that growth could be a result of inflation. Since it is the market leader they usually tend to be able to pass on the cost of inflation. Think of KO. A bottle of COKE used to be like 10 cents now it is like $1.75. KO grows volume wise because of population grow and the rise in middle class but it also grows because of inflation. See it grows but it don't. It keeps up with inflation is what I am trying to say. Back to TSCDY and its growth. Look at a simple 10 year summary of sales growth from 02/03 to 02/12 of their income statement. Sales went from 42 billion to 104 billion. Same thing for income. Now growth might slow a little from time to time and the law of large numbers sets in to a degree but if I were a betting man I would say with their business model......in 5 to 10 years sales will be higher and so will income. Price does follow if that is true. It has too. If it didn't you would have one heck of a dividend. I personally bought TSCDY and just sold it Tuesday or Wednesday to buy WFC. My plan was to hold it until it went back to $20 and collect those juicy dividends while I waited but couldn't justify it when WFC, my favorite company, was trading at such a discount to the market. I also sold BRK.B and NSC to make my stake in WFC make up 100% of my portfolio. I would not recomend doing the same. Diversify. I would say the average person should hold at least 10 equities in his or her portfolio. I have never held more than ten personally. I like to keep things concentrated. Their are only 2 companies I am 100% confident in and they are Berkshire and Wells Fargo. I would feel comfortable of both making up 50% of my holdings right now and never selling either one of them. Well I have to sleep. If you have any more ?'s feel free to ask.

Member Avatar valuemoneygreen (81.88) Submitted: 1/11/2013 4:55:01 AM
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And sorry sometimes I can get a little windy. My cost basis for WFC was $34.87. Guess I will find out this year how it does compared to the market from this point on. I would consider selling @ $43.2 if I found a better deal out there. I hated parting with Berkshire though. I am always scared Buffett will retire and the stock will plunge for a while. I would like to be out of it then and when it goes down get it for under book value and never sell it again. Or wait until it got to 1.5 times book. The $43 and change sell point on WFC is 12 times this years (2013) estimated earnings. I would say those estimates will be too low though ( $3.60 average estimate).....or I hope anyway!

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