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lemoneater (58.46)

In the Pink, a Healthy Grocery Store



August 04, 2010 – Comments (6) | RELATED TICKERS: TSCDY , WMT

As a rule, I avoid investing in stocks. with a .pk suffix on the ticker. Pink isn't always a healthy color in the investing world. But as we all know, you shouldn't judge a stock by its ticker. I'm thrilled to have a position in TSCDY.PK more commonly known as Tesco. Where else can you stop for a scone and a pot of tea; buy your lemon curd, ginger beer, potato crisps, jaffa cakes, fresh bread and cheese; stock up on screenwash, and sign up for pet insurance for your moggy before you leave?

There are Walmarts in UK, but only a few. Tesco is a younger, more suave grocery giant than Walmart. And as such, I think Tesco is uniquely poised to do well in a country watching its wallet. Tesco isn't a transplanted company, and it has its best years ahead. Go Tesco!

(Disclaimer please kindly forgive any ineptitude in using terminology. I'm an American who loves the country that produced a Jane Austen, a Dorothy Sayers, a Beatrix Potter, and so forth.)

6 Comments – Post Your Own

#1) On August 04, 2010 at 11:10 AM, EnigmaDude (51.88) wrote:

Nice pitch.  I love it that you avoided discussing the P/E ratio or their book value.  This is what I like to call the "softer side" of investing.

Now as an American, what do ya think of Whole Foods (WFMI)?  Tesco could become their competitor - they already have stores open in some of the same locations in the US.

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#2) On August 04, 2010 at 11:30 AM, catoismymotor (< 20) wrote:

I agree with ED. 

+ 1 Rec.

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#3) On August 04, 2010 at 12:12 PM, lemoneater (58.46) wrote:

Enigma, speak about puzzling. CAPS lists the P/E as 95; but SA has it as 19; and yahoo says N/A. They can't all be right.

As for book value, I'm blushing to admit that I'm not totally certain what that term means. Is it a company's liquidation value?

While both Whole Foods and Tesco sell delicious exotic foods, I believe Tesco sells more home products and offers more services than Whole Foods which is why I compared Tesco to Walmart. Will they target the same demographic in the U.S? If so which one will get more customers?

The best article I found on Tesco was this.

Evidently Tesco is underfollowed. Thanks for the comment:)

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#4) On August 04, 2010 at 12:44 PM, EnigmaDude (51.88) wrote:

I use Scottrade and they seem to have decent data.  According to them, the current (trailing - meaning that its based on their latest earnings report) P/E is 13.7.  Not bad.  And did you know that Tesco is also in the banking business?

Here is how Scottrade defines Book Value:

Book value is the net asset value (NAV) of a company's stocks and bonds. Finding the NAV involves subtracting the company's short- and long-term liabilities from its assets to find net assets. Then you'd divide the net assets by the number of shares of common stock, preferred stock, or bonds to get the NAV per share or per bond.

So yes - basically what the company would be worth if they had to liquidate.

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#5) On August 04, 2010 at 1:58 PM, lemoneater (58.46) wrote:

Thanks for the helpful explanation on Book Value. It sounds as if a company had dangerous debt levels book value would show that--another helpful tool to use.

I wonder how much of its earnings come from banking. Tesco: so much more than a Mom & Pop grocery store.

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#6) On April 28, 2011 at 1:40 PM, lemoneater (58.46) wrote:

Update I've held TSCDY.PK since shortly before I wrote this blog. Currently it is at a 9.62% unrealized gain in my real life portifolio not counting the dividend.

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