Being a shareholder in Wm Morrison (MRW) has been marvellous, as discussed on Sunday HERE. I had to laugh when I read in The Times that one top 20 investor’s ‘view is 254p undervalues Morrisons, but with three private equity groups interested it is unlikely to be the final bid’. Clearly on the first point they should have bought more shares then! We will see on the latter point and my view is to hold onto the stock and see what happens. Even if all the other potential angles come to nothing, getting a 254p per share bid (including the dividend) is a pretty good return for those who followed the views on this website over the last few months. Tom and Steve have also been very smartly writing about Morrisons’ peer J Sainsbury (SBRY), recently observing that it is a FTSE “elephant and another dividend secured”.
That was HERE and the stock has performed well over the last year and, unsurprisingly, a few investors are now thinking that it will be the next target in the industry. After all, let us not forget that the company itself wanted to merge with Asda (before this was ludicrously blocked). Since then, WalMart has sold the majority of its Asda shares to EG Group (owned by the Issa brothers from Blackburn) and investment fund TDR Capital. Exciting times for core and sensible large cap UK businesses. To be fair to Sainsbury, recent results have been quite good. Naturally some of this is from Covid-19 angles, where we have all spent more time eating at home rather than going to restaurants and related. So whilst we read about better grocery sales, it also notes ‘general merchandise sales lower than last year’s elevated levels but ahead of expectations’. That is kind of workable and hence why it ‘now expect to achieve underlying profit before tax of at least £660m in FY21/22 with progress weighted towards the first half’. It also noted in its update presentation that it is ‘ahead of the market on a one-year and two-year basis’, which is certainly true versus Tesco, Morrison and Asda (but we will not mention the German names). If you pull it all together with an EV today of nicely under £8 billion, you can make a x12 EV:ebit multiple with a c.3.5% current dividend yield work (especially as the latter should increase a bit further when it next announces formal numbers).
Certainly an evolving UK economy will have some impacts over the next year, but it is hardly an expensive share...and that is why there is the scope for a Morrison-esque bidding game here. You can never predict it fully, but at worst you can keep picking up those dividends. And if you want to check it out, I suggest you rock up to one of its stores and use it online...Which actually makes me think about my next online shopping order. I tend to be more of a Morrisons (via Amazon) or Sainsbury's sort of guy but - I must admit - I have utilised Ocado (OCDO) a few times over recent months.
I have to say it is quite good. Obviously if you have owned the shares over the last five odd years, then you have made a great profit but you might have a different view over the last year even after it did the deal with M&S (MKS). I see Ocado came up with some numbers which showed a nice rise in sales...but only a discussion about EBITDA rather than proper profits. Nevertheless it did also announce a new service supply deal in Spain (which unsurprisingly has pushed the shares up). Time for me over the next few days to have another Ocado order and review the share price again (not that either - unlike Morrison and J Sainsbury a few months ago - are obviously cheap).
Filed under: J Sainsbury, Neill Ricketts, Zephyr Energy, Catenae Innovation, Ten Entertainment
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.