Tesco is one of the worlds leading international retailers. Since the company first the trading name of Tesco, in the mid 1920s, the group has expanded into different formats, different markets and different sectors. The UKs leading retailer Tesco was floated on the stock exchange in 1947 and in 1995 took over rival Sainsburys position as the UK number one. The principal activity of the group is food retailing, with over 2,000 stores worldwide. Tesco has a long term strategy for growth, based on four key parts: growth in the Core UK business, to expand by growing internationally, to be as strong in non-food as in food and to follow customers into new retailing services. The company launched a home shopping service in 2000, allowing customers to order their shopping online. Tesco is now expanding its convenience stores and overseas into areas such as Taiwan, Malaysia, Poland, the US and Ireland.

Upper graph = 12 month share price with 6 month moving average
Lower graph = 12 month volume (red line = volume average).

Market buzz -Food & drug retailers were also sent packing after Exane BNP downgraded its recommendations on shares of Tesco and Sainsbury.

The bank cut Tesco to 'underperform' from 'neutral' and pushed the target price down to 175p from 200p pointing to a high risk of de-rating given a building risk that inflation isn't fully passed through to the shopper, a tougher industry volume outlook and nothing in its recent consumer survey to prove volume growth is a given.

It cut Sainsbury to 'neutral' from 'outperform', keeping the price target at 255p.

"With our target price now a little below the current share price and a building risk cost inflation isn't passed through to the shopper smoothly, we cut our rating," it said.

Mystery hedge fund targets Tesco as other short-sellers fold

Marion Dakers, financial services editor
21 JANUARY 2017 • 7:29PM
Tesco has become the target of a new large bet against its shares, going against the grain of many hedge funds that are cashing out their downbeat positions in British supermarkets.

Delores Holdings appeared on the register of major short positions for the first time ever this week, after establishing a bet against Tesco worth 0.7pc of the company, or around £114m at the current share price.

Little known is known about Delores, which is one of just four hedge funds shorting Tesco stock, joining established names Lone Pine, Marshall Wace and Pelham.
Tesco was once beset by short-sellers, who piled in to borrow stock as the share price plunged nearly a third in the early months of chief executive Dave Lewis’ tenure.

Short-sellers currently have positions worth about 4.1pc of Tesco, down from 7pc early last year, according to data from IHS Markit.

The shares have risen 30pc over the past year, buoyed by a return to like-for-like sales growth and progress on Mr Lewis’ cost-cutting programme.

Last week, the firm described its Christmas quarter as a “sustained, strong performance”, although the turnaround still has further to go, with no return to a dividend in sight.

Short positions are established by borrowing stock from a big investor before selling it on, in the hope of buying shares more cheaply when unwinding the trade.
After the financial crisis, the Financial Conduct Authority has required all short-sellers to disclose any trades larger than 0.5pc of the target company.

A number of funds have cashed in their bets against the supermarkets in recent months as the sector showed signs of renewed health. AQR and Discovery are among those to have dismantled their Tesco bets, while the Canadian Pension Plan and GLG have cleared their Sainsbury’s positions.

Some have closed their positions against fellow retailer Morrisons, which at one point had around a fifth of its stock on loan to short-sellers. The Bradford-based grocer’s surprise return to profit over the last few quarters has confounded the sceptics and left many short-sellers losing money on their trades.

Little is known about Delores, which is not registered at the UK Companies House. The name has also appeared on the short-selling list for the Spanish supermarket chain DIA.

The similarly-named Delores Limited, a small investment company owned by the Cooper insurance family, is not thought to be related. Tesco declined to comment.

Cannot see they are large enough on their own ? Food inflation is Tesco's greatest fear, do they absorb it (which they certainly cannot afford to do) or pass it on to the customer ( which is fine as long as all supermarkets and mainly the discounters also pass on the rises). Cannot see the German stores doing this freely. Due to far less overheads).
Delores Holdings may just see problems down the road and if others join in, well the game can soon change. Would think their will be an early board meeting called on Monday by Tesco. Quite a worry for Dave Lewis, with the sp already dropping.

Doomed I Tell Ye Doomed Capt Manwareing!! :0)

Tesco or the shorters. :-))

Well certainly not betting against that gap being filled dc.

Gap filled.

Reuters - Britain's biggest retailer Tesco PLC (TSCO.L) is facing a new claim for damages from an investor about its 2014 profit overstatement, the company said on Tuesday.

A spokesman for the supermarket group said it was aware of a claim filed by Manning & Napier, the U.S. fund manager, and would be filing a defence shortly.

Manning & Napier declined to comment. However, the Financial Times reported that the fund manager said it suffered losses of $212 million because of Tesco's accounting irregularities.

Tesco is already defending a more than 100 million pounds claim from a group of 125 institutional investors that was filed last October.

Tesco issued a statement to the Stock Exchange on Sept. 22,2014, saying that during its final preparations for an interim results announcement it had identified a 250 million pound overstatement of first-half profit, mainly because it booked commercial deals with suppliers too early.

The discovery led to the suspension of eight senior members of staff, sent Tesco's shares tumbling and plunged the company into the worst crisis in its near 100-year history.

Three former senior executives of Tesco accused of fraud and false accounting are due to stand trial in September.

Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, were charged by the Serious Fraud Office (SFO) last September with one count of fraud by abuse of position and one count of false accounting.

Late last year it emerged that Philip Clarke, the former chief executive of Tesco and Kevin Grace, its former group commercial director, would not face charges.

The SFO's more than two-year-long investigation into Tesco remains active.

Very odd, perhaps almost desperate actions by Tesco. Cannot see any benefits. Trying a different direction almost tells you they are running out of ideas how to turn Tesco around.


Tesco and Booker announce merger

Tesco shareholders will be delighted, not sure Booker shareholders will be.

Surprised by Tesco buying them.

30 Jan Shore Capital N/A Hold
30 Jan Beaufort... 220.00 Hold
30 Jan Goldman Sachs 150.00 Sell
30 Jan HSBC 260.00 Buy
30 Jan Exane BNP... 180.00 Underperform
30 Jan Bryan Garnier 170.00 Sell
30 Jan Deutsche Bank N/A Hold

A consensus then - not!

I think the merger/takeover of booker was plan B as plan A is stumbling. Time will tell.
It has still got to be given the ok yet.

Surely the monopolies committee won't allow this merger.

50/50 Tesco will not be buying the food shops in the Booker group. If they get the ok, they will just be supplying them. Certainly going to gain massive clout in the buying department.

Proactive investor - The FTSE 100 ended down by 0.9% at 7,118.

The losers were led by Tesco (LON:TSCO) down 4.2% at 197.8p, giving up some of Friday's gains when the stock surged in the wake of news of its planned tie-up with food wholesaler Booker (LON:BOK).

Booker, which owns cash n carry outlets Makro also fell, by 3.5% to 204.86p in the FTSE 250 midcaps index.

Over the weekend, press reports suggested the deal faced a lengthy investigation from competition regulators.

31 Jan S&P Global 200.00 Sell