Sainsbury (J) Discussion Board http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion http://www.iii.co.uk/icons/logos/uk_logo.gif http://www.iii.co.uk tag:iii.co.uk,2003:tst.9666401
I had always looked at Market cap, Divi yield, cover, share price (technical analysis for when to buy) and glanced at net debt. I hadn't thought of it like that.

btw I own all three, and have been trading all three for the past year or so. They all seem pretty range bound - excellent!
By The_VIX ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9666401&action=detail Mon, 21 May 2012 17:30:00 GMT The_VIX tag:iii.co.uk,2003:tst.9646413 http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9646413&action=detail Wed, 16 May 2012 08:31:00 GMT foglight tag:iii.co.uk,2003:tst.9641996
It is indeed normally pretty pointless to compare share prices, for all the reasons covered - HOWEVER, given where recent history has taken the Big 3 (TSCO crashing down through 330p, MRW getting up there then falling back, SBRY having been there not long ago and now pressing to get back), it is actually now a fairly interesting and quick snapshot of relative prosperity - and probably will be for the forseeable. If only by chance.

Moreover, market cap - as with any other single metric - is potentially misleading as a benchmark. Much better to look at total capital, including total net debt (ie. EV), as a much more accurate measure of relative business size and market position / power. Currently we have (using latest reported figures) SBRY £8.3bn, MRW £8.5bn, TSCO £34.0bn - here, the SBRY vs. MRW contest will remain relatively interesting for this next period (for me, anyway!).

EPS is rarely relevant as an absolute number, and it certainly isn't in this sector. Divi yield is of course much more pertinent, but again, dangerous to rely on purely in isolation - you have to consider variance in capital structure and, in particular, cover levels. You can adjust for this in any basic valuation analysis - eg. if you put them all on 2x cover, current (historic) yields would be SBRY 4.5%, MRW 4.6%, TSCO 5.8% - rather different from the current headline yield picture.

What all this tells us is up for debate. I would merely point out, again, that in the current climate and economic outlook, and given generally fairly full valuations for many other defensive, stable, cash generative blue-chips, I feel any sensible investor would need a very good reason NOT to have at least one of these in their portfolio.

And you can actually make a pretty decent current case for all of the three, albeit for differing reasons. Personally I hold SBRY and MRW and am happy with that position going forward - though I am significantly poorer than nice old Mr Buffett so I have to accept that his position on the other side of the fence must have at least something going for it.
By Bill1703 ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9641996&action=detail Tue, 15 May 2012 10:10:00 GMT Bill1703 tag:iii.co.uk,2003:tst.9641493
Personally EPS is even more psychologically enticing, along with dividend yield.

SP is only driven by city traders and slickers, divi puts ££ in my bank account!!

Just my tuppen'orth! By Sickson Dread Squid ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9641493&action=detail Tue, 15 May 2012 08:40:00 GMT Sickson Dread Squid tag:iii.co.uk,2003:tst.9641377
I remember a few years ago that the Sainsbury's share price was always ahead in pure numerical terms. When Tesco started taking over the world, it went the other way round.

Now that Sainsbury is charging ahead with good results (and heopefully many more to come), it's great to see the price re-balancing. By JollyNiceChap ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9641377&action=detail Tue, 15 May 2012 08:18:00 GMT JollyNiceChap tag:iii.co.uk,2003:tst.9641258 http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9641258&action=detail Tue, 15 May 2012 07:58:00 GMT mistermr tag:iii.co.uk,2003:tst.9638070 http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9638070&action=detail Mon, 14 May 2012 12:03:00 GMT turkey10 tag:iii.co.uk,2003:tst.9637718 Currently SBRY=315.70p, TSCO=319.20. Any thoughts? By FizzyPop ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9637718&action=detail Mon, 14 May 2012 11:07:00 GMT FizzyPop tag:iii.co.uk,2003:tst.9631230 However they have gotten so much worse over last 2 years that they can only get better, so I would say TSCO out of favour but much future potential.

Holding both - but would like to see one winner draw ahead as the competition is good for the consumer, but bad for investors.

By Sickson Dread Squid ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9631230&action=detail Fri, 11 May 2012 11:30:00 GMT Sickson Dread Squid tag:iii.co.uk,2003:tst.9631214
(hopefully up to the price I bought in at in the first lace LOL)
SDS By Sickson Dread Squid ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9631214&action=detail Fri, 11 May 2012 11:27:00 GMT Sickson Dread Squid tag:iii.co.uk,2003:tst.9628523 Pleased to hear of Sainsbury expansion plans and the good dividend. By turkey10 ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9628523&action=detail Thu, 10 May 2012 16:40:00 GMT turkey10 tag:iii.co.uk,2003:tst.9627009
But cashfflow and earnings are two different things, and while both are important for underpinning dividend growth, their 2x target is an explicit earnings constraint. Yes, Sainsbury's are edging their rivals just at the moment, but they tend to take turns at this and with the economic backdrop, and with TSCO set to fight hard to recover lost ground (and reputation), you wouldn't want to rely on anything more than very slow growth in core EPS for a while (and there doesn't seem to be much hope of buy-backs which might help boost the latter). And while reducing debt may see lower interest costs, I would think that most debt is on fixed rate and this would only offer very minor medium-term relief.

As an illustration, if SBRY grow underlying EPS by 15% over the next, say, 3 years (and this may be a realistic result), increasing cover to 2x would leave DPS absolutely flat over this period. If they manage 25% EPS growth (or nearly 8% p.a., which sounds optimistic to me), then TOTAL DPS growth would be more like 9% - or less than 3% p.a. Which is better than nothing, but will be lucky to keep pace with inflation.

So maybe you can see my issue? Obviously, the current yield looks nice and dandy, but it quickly gets less compelling, relatively speaking, the further out you project.

FWIW, I too like Sainsbury's, most of the time, though very recent experiences have been underwhelming. Tesco has issues, largely disguised when they were all-powerful but the chink in their armour has been exposed. I dislike Asda, though they have a rich parent to keep them competitive.

For choice, I would go to Morrisons - though there is none near me (a common issue in many regions). I think their medium story could well be the best of the lot, though it does demand some skill in increasing their geographical footprint and, probably, in getting an online service up and running in some meaningful way. By Bill1703 ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9627009&action=detail Thu, 10 May 2012 11:56:00 GMT Bill1703 tag:iii.co.uk,2003:tst.9626715
"The company has undergone a significant growth spurt in recent times, with retail space growing by a quarter over the past four years. The supermarket group will now expand its floor space by about 5pc a year. This will allow a better focus on cash management that should reward shareholders through higher dividends." By Lupo di mare ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9626715&action=detail Thu, 10 May 2012 10:59:00 GMT Lupo di mare tag:iii.co.uk,2003:tst.9626701
I'm a big fan of SBRYs, but that might just be the stores I use. Our comparitively sized Tesco is inferior in terms of choice, quality, stock and service. They've also got a globally spread portfolio to finance. I'm not too keen on Waitrose at the other end, as their quality isn't so hot and seems to be relying on snob appeal, at least in our area. By Lupo di mare ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9626701&action=detail Thu, 10 May 2012 10:55:00 GMT Lupo di mare tag:iii.co.uk,2003:tst.9625514
Fair enough - good results, and they are clearly winning the 2011/12 Grocers League (so far). But they are basically admitting that divi growth will be constrained into the medium term - it would be different if they could promise strong growth in EPS, but they can't guarantee this any more than anyone else? By Bill1703 ]]> http://www.iii.co.uk/investment/detail?code=cotn:SBRY.L&display=discussion&id=9625514&action=detail Thu, 10 May 2012 07:28:00 GMT Bill1703