Company News

Tesco and why ShareSoc members should not have been surprised

After we published some previous comments on Tesco, Warren Buffett publicly admitted that his investment was a "huge mistake". He currently has about a 4% stake in the company, and may have lost over $800 million at the current share price after first buying it in 2007. It's perhaps worth reminding ShareSoc members and others of the fact they could have read a report on the Tesco 2013 Annual General Meeting in June 2013 which spelled out some of the problems the ...

Sainsbury and Tesco (do they need a pressure group?)

Following on from the debacle at Tesco, Sainsbury produced some quite awful trading figures yesterday (1/10/2014). Here's a review of some of the news on those and other retailers. Tesco The Financial Conduct Authority (FCA) are undertaking an investigation into Tesco's "overstatement of expected profit". Making misleading statements to the market is potentially a criminal offence. How long that will take to reach any conclusions is anyone's guess. The result of such investigations are often reported to investors so late in the day ...

Globo Interims and evaluating software companies

Globo issued some Interim Results this morning (29/9/2014). The announcement created quite a debate on some bulletin boards because of varying interpretation of the results. It only merits some comments from me because ShareSoc has published articles on this company before, particularly after it came under attack from shorters who primarily questioned the poor cash flow, capitalisation of development costs and several other aspects of the company's operations (see our November 2013 newsletter). That caused the share price to collapse from ...

The Tesco Board – fit for purpose?

There was a very good article in the Financial Times today by Luke Johnson. It covers the problems at Tesco and suggests that "the stewardship at Tesco has been woeful".  A particular focus is on the experience of board members, of which only one is executive (recently appointed Dave Lewis). It says "Like every single other director on the main board, he has no executive experience as a retailer whatsoever". Luke suggests they might have a wide and impressive set of ...

Barclays, Tesco and MoPowered

Barclays, Tesco and MoPowered - two big companies and one a typical new AIM company which has yet to show it can make a profit - but all three are under the weather in the last couple of days. Barclays have today (23/9/2014) been fined £38m by the Financial Conduct Authority for failing to ensure that clients money in the investment bank was kept separate from the banks own assets. When I joked in my local Barclays Bank this morning that I ...

The dangers of share tips – Naibu (NBU) and Monitise (MONI)

Well respected stock picker Simon Thompson had to admit defeat with Naibu in the Investors Chronicle on Friday (19/9/2014). This Chinese maker of sportswear has, on an earnings basis, been ridiculously cheap for a long time, but some investors liked the high dividend yield. Simon picked the company for his share pick of 2014 in the Investors Chronicle - he tipped it at 58p in February with these words: "It's not often you have the chance to buy shares in a ...

Diageo AGM and Scottish Independence Postscript

Yesterday I attended the Annual General Meeting of Diageo Plc. Being the day of the Scottish Independence vote, there were some questions on that issue for the board, but all the CEO said was that you can be assured we will fiercely fight for free trade, currency stability and no more tax and regulation. The Chairman said it was for the people of Scotland to decide, even though Diageo is headquartered in Scotland. You know the outcome by now and I ...

Oxford Technology VCTs and Scottish Independence

Today the two Oxford Technology VCTs that were threatened with withdrawal of VCT status have announced that the changes required by HMRC to enable them to retain VCT status have been achieved and accepted by HMRC. Presumably that has required the disposal of some of the Scancell shares that were the source of the difficulty and that has been confirmed in the announcements. This therefore probably concludes the campaign on these VCTs that ShareSoc mounted as there has been an almost complete ...

Quindell judgement

Yesterday (9/9/2014), Quindell announced that the company had won a judgement for libel against Gotham City Research LLP in the London High Court. Gotham simply failed to defend the action or even acknowledge the claim. Gotham had published a 74 page document earlier this year effectively claiming the company was fraudulent but Quindell immediately issued an announcement rejecting the allegations as being “highly defamatory” and “deliberately misrepresentative”.  Gotham also made it clear that they had a short financial interest in Quindell ...

Terry Smith demolishes Tesco

Terry Smith, CEO of Fundsmith, did a great job of demolishing the business of Tesco yesterday in the Financial Times (FT Money 6/9/2014). He explained why he won't be buying Tesco even though the shares have fallen to a level that equals what it was in 2003 and investors have been imploring him to buy it. Even though Warren Buffet has owned some shares in Tesco of late, he quotes from Mr Buffet's 1979 letter to shareholders thus: "The primary test of ...