Thought provoking post - and I thought the problem was all about the price of fish!
http://seekingalpha.com/article/2463035-tesco-aggr...
But don't let it spoil your weekend.
Bonitabeach
The referenced article is about Tesco. Do you have anything useful or insightful to say on Quindell or Globo? Bit confused as to why they are in the title for no apparent reason
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The Tesco question is full of cyclicality - while I think the article is a bit overdone, he does make a good point about leases being effectively a form of debt, and the company employing relatively flattering accounting (though it makes a small difference in the grand scheme of things).
I'm still of the opinion that the barrage of negativity on Tesco tells you more about the likely long-term direction of the share price than any of the new forensic insights into their accounts - which have been treated more or less the same for the last few years.. :)
Hi all,
Amidst all the hindsight wisdom re Tesco, it appears that Terry Smith, at least, was ahead of the curve....
http://www.ft.com/cms/s/0/8f866d16-3280-11e4-93c6-00144feabdc0.html?siteedition=uk#axzz3CQMDRqiW
As to the association of Tesco with Globo and QPP, this seems to be mostly an (admittedly eye-catching) bit of provocative journalese ! I suppose the 'common thread' is an 'aggressive' approach to accounting, adhering to the letter rather than the spirit of insufficiently comprehensive/unambiguous rules.
ATB
I think as others have touched on the crux of the investment case is the extent to which the performance and thus value of Hyper/Supermarkets is being undercut by the pace of migration to online for bulky items and more frequent local top ups from smaller locations.
I know our usage is now purely local and online but I'm less clear as to how widespread the trend is nationally
My gut feel is that in 15 years time we'll look back in bemusement at just how much time and fuel we used to expend to go through the thoroughly mind numbing experience of "the weekly shop"
..so I'm steering clear of the sector .
rhomboid1,
If what you say is true - how do you explain the rise of Aldi and Lidil. No on-line and no convenience stores?
That article is shocking. Title is aggressive accounting but nowhere does it back that up.
They also state : "Tesco has high levels of debt, most of which is off-balance sheet in the form of lease commitments"
That's quite normal - operating leases are held as a note - see annual report page 120 :
http://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf
