J Sainsbury (LON:SBRY)
Sainsbury's (SBRY) is my favourite of the Listed supermarkets, simply because they seem to be executing better than the others. Also, it's intangible, but as a customer when shopping at Sainsbury's, I just somehow feel positive (maybe it's the colour scheme, store layouts, staff attitude, the product, who knows?). When I shop in Tesco, it feels the opposite - somehow more stressful and unpleasant. Can't explain it, but there has to be a reason for that.
With a positive Xmas trading update issued this morning, with LFL sales up 1.5%, it's put SBRY back on my shopping list at 329p, so have picked up a few. The forecast yield is almost 5%, and the PER 11, so those figures look attractive to me. Always the possibility that the Qataris, who own 26% might bid for the whole thing at some point, so I like SBRY as a nice each-way bet.
Ted Baker (LON:TED)
Fashion group Ted Baker (TED) once again shows how it's done, with an excellent trading update for the 8 weeks to 5 Jan. Retail sales rose 20.9% vs last year, and with sq footage up 13.9%, that means LFL sales are up roughly 7%, a remarkable performance in the current climate.
It just goes to prove what I've always said - if you get the product & the price right, it will sell, regardless of market conditions.
Profits at TED will be in line with expectations. The share price already reflects this strong performance, with a PER of just over 20. It's not for me, as it only takes one season's range to go wrong, and a profits warning, to trigger a 30% plunge in share price. So for me the potential reward does not justify the risk.
But I'll be the guy buying 30% lower if they do warn on profits at any point!
Market Makers
Today's rant has to be about market makers, and their ridiculous spreads again. Take Vianet (VNET), a share which I'm very keen on, as it's the ideal mix of value (fwd PER of 6.7 times next year's fc EPS of 17p, and 5% divi yield, with a sound balance sheet)…
