Sainsbury (J) Live Discussion

jackdawsson 21 May 2019

Why 160p SaraRacano: Why? Why? Why? Do I keep thinking 160p? This baby is tanking! Sara, Most stocks across FTSE 100 fell over past few days. SBRY saw disappointing intraday lows of 197.80 yesterday, but volume not huge. Indicates big funds at least not bailing. SP only 202+ as I write, but it still makes utter bollards of your 160 call for any time soon. Frankly, you appear increasingly to be acting like a troll. If you’re shorting this, fair enough, even though you could say anything now as you never declared any live position previously. But if no positions here, maybe you’ll consider buzzing off back to TSCO’s BB. Latter request not meant nastily, but based on your increasing trolling, ie. not so much any balanced points made, but persistent bashing of this stock. - Cheers.

SaraRacano 21 May 2019

Talk about over priced Debt is 7x greater than pre-tax profit (& there is no problem). Sainsbury´s only just managed to increase its overall sales by a fairly measly 2.1%. But the bigger problem was the falls in profit before tax and earnings per share (despite Argos). The former fell by a massive 29%, the latter by 32%. Paying an 18+ p/e for this??? Crazy prices.

SaraRacano 20 May 2019

Why 160p Why? Why? Why? Do I keep thinking 160p? This baby is tanking!

jackdawsson 14 May 2019

Why are you here, Jackdawson? SaraRacano: Britexit, doesn´t matter it´s a complete side-show to the actual realities. The key issue is the ongoing restructuring of the US economy and how it enriches big businesses at the expense of ordinary people, whose jobs will continue to disappear. Sara, What I meant was Brexit as a catalyst that conceivably may eventually lead to a radical government in No 10. That’d certainly matter as far as UK markets go. It’d probably prompt huge cash outflows & see investment values hit on a scale not seen for over a decade. Indeed, many jobs will disappear in our lifetime, whilst new technologies will create new jobs. But mostly for the nimble & more able who can easily adapt to those advances. Increasingly, many menial jobs will be automated in future. What to do? It’s been trialled elsewhere with mixed results, but I’d welcome some form of “Citizen’s Basic Income”. Yes, it’ll cost. But I’d far rather pay more into the system if it means seeing less of our fellow citizens struggling in chronic poverty & suffering destitution in our cities & towns I’ll catch that video on BP’s BB later. - Cheers.

SaraRacano 14 May 2019

Why are you here, Jackdawson? Britexit, doesn´t matter it´s a complete side-show to the actual realities. The key issue is the ongoing restructuring of the US economy and how it enriches big businesses at the expense of ordinary people, whose jobs will continue to disappear. The financialization of the global economy is getting worse” and that unregulated markets are incapable of rescuing Main Street or averting the coming economic crisis. You need to focus on globalisation & the effects. Watch the video I put up on the BP board.

jackdawsson 13 May 2019

Why are you here, Jackdawson? SaraRacano: QE has propped up zombie companies such as Sainsbury´s (baa 3. Tesco & Sainsbury´s are no more than virtual junk. So we have lived through the biggest credit bubble & Sainsbury´s is struggling to survive, what happens when the going gets tough? You just have to use 1980´s & 90´s valuations for supermarkets to relise what effects QE has had on their SP´s. Sara, That’s taking huge liberties with interpretation of the wider picture regarding QE. There’s no evidence whatsoever that this sector, unlike others, has benefited at all from QE. Let’s not forget why we had QE in the first place &, for similar reasons, years of punitive austerity for ordinary citizens. Why no mention of the impact of austerity & how that’s directly significantly hit potential profits across this sector, not least for stocks like SBRY & TSCO? Hmm. SaraRacano: The correction will come, it´s just a game of waiting. This I agree with. If the Tories fail to deliver the kind of Brexit much of their core-support apparently voted for, many will probably switch to pro-Brexit parties come the next GE. In that climate of rising anger & ample protest votes, it’s far from inconceivable that we’ll see a Corbyn-SNP coalition in Number 10. I’m no Tory, but a more radical government alone should ensure a huge correction across the FTSE if we haven’t had one before then. - GL.

SaraRacano 13 May 2019

Why are you here, Jackdawson? Even Buffett, now is a poor performer. his M&A of Kraft-Heinz has been nothing short of a disaster. QE has propped up zombie companies such as Sainsbury´s (baa 3. Tesco & Sainsbury´s are no more than virtual junk. So we have lived through the biggest credit bubble & Sainsbury´s is struggling to survive, what happens when the going gets tough. You just have to use 1980´s & 90´s valuations for supermarkets to relise what effects this has had on their SP´s. The correction will come, it´s just a game of waiting.

SaraRacano 13 May 2019

A double blow off top This is something you need to be a careful with both individual stock & main indices especially after a failed M&A. Basically there is a lot of hot money that needs another home. Also it is possible we could be seeing a double blow off top after the events of December. This is another contender that needs to be added to the vaiables, how much hot money. Also the performance of stocks straight after a failed M&A. Be warry of the double blow off top, they can certainly catch the gulliable,

jackdawsson 13 May 2019

Why are you here, Jackdawson? SaraRacano: You make so many big sweeping statements: ongoing correction largely due to uncontrollable macro-factors & ructions between US & China. Nothing to do with excess money printing & year 29 of a credit bubble? You appear to write as the way you want things. As soon as external variables come into play you get nervous. Sara, Indeed, QE greatly helped some sectors. Not least banking. It’s also indirectly inflated asset prices. But in real terms it’s been of little-to-no benefit to wider economy &, by association, sectors like retail. As for credit bubbles: general view is that they’re manageable in a low-rates environment. No need for panic. That’s been the case for a while. Your unsubstantiated claims that I “get nervous” says more about you than about me. I try to buy low, sell higher. Mostly based on technicals over various timeframes. Occasionally, I pay higher than desired &, when needed, I generally sit tight, remaining unfazed. That’s been my modus operandi going back years. Despite errors, I’ve done okay with trading this sector, including TSCO & MRW. For eg. I ended up holding MRW’s for over a year in 2015/16 after a right mess-up, to still exit with good overall gains. That’s all in my posting history, though it’s not important. The present & future is what counts. SaraRacano: I am just trying to evaluate your trading risks, they look incredibly high, if it doesn´t work in banking try supermarkets, I am sure you´re going to have the same luck! No-one denies luck is a factor. That applies across the board. So what’s new? No offence meant, but I need no pointers from someone who seems so biased against this sector, it intimates that perhaps they themselves bought in here when these stocks were much higher & generally seen (wrongly as it turned out!) as “defensive stocks”. Hence your seeming pointed vendetta aimed at this sector specifically. Otherwise, why else the litany of bearish comments on TSCO, now switching to SBRY? In fairness, many investors got it badly wrong back then. Including Warren Buffett who exited TSCO at a hit, as sector got badly sold off due to rise of Aldi & Lidl. That was then. Even discounters can only do so much viable price-cutting. As it stands, this sector is forecast to grow over the next few years. SBRY as a big player, should be okay. But timeframe typically indeterminate as evidenced even by broker forecasts for SBRY, ranging from 310 highs to 180 lows. - GL. Hargreaves Lansdown Sainsbury (J) plc (SBRY) Ordinary 28,4/7p Share Price | SBRY The latest Sainsbury (J) plc share price (SBRY). View recent trades and share price information for Sainsbury (J) plc and other shares.

SaraRacano 13 May 2019

Why are you here, Jackdawson? You make so many big sweeping statements: ongoing correction largely due to uncontrollable macro-factors & ructions between US & China. Nothing to do with excess money printing & year 29 of a credit bubble? You appear to write as the way you want things. As soon as external variables come into play you get nervous. I am hung up about earnings & SP´s? Who needs fundamentals anymore? You can see just going on historic fundamentals what QE has done to the markets. It is heyday Tesco would trade at no more than 14x earnings. I am just trying to evaluate your trading risks, they look incredibly high, if it doesn´t work in banking try supermarkets, I am sure you´re going to have the same luck!

jackdawsson 13 May 2019

Why are you here, Jackdawson? SaraRacano: Seeing them at 280p does make you think how wild the price actually was. this was the irrationality far from your irrational argument it could be argued that the SP is starting to act rationally. The only thing stopping the shares going into a freefall is the dividend. Another credit downgrade would hurt the group too. Sara, Patently little can be ascertained in the current market climate. FTSE & most global markets are seeing an ongoing correction largely due to uncontrollable macro-factors & ructions between US & China. We’ve been here before a few times & recovered. There’s no apparent basis for seeing this at values of 60p to 80p max. You seem unduly hung up about P/E ratios, but that’s only one of a number of key factors that markets evaluate. PS: Kindly note, when quoting me in your posts, as you have in first 2 sentences of your last post, at least acknowledge it. If you run your mouse pressed-down over parts of anyone’s comment you wish to quote, the option to quote comes up automatically & it takes a simple mouse click. That way everyone knows who said what. PSS: Harking back to your thread title: I could well ask you the same question? I’m here as I bought this, then sold days later. I’ve re-bought since. But what are you doing here? You’ve no declared positions in SBRY, long or short, so no apparent stake. - GL.

SaraRacano 13 May 2019

Why are you here, Jackdawson? Of course no-one knows for sure if SBRY’s current SP offers fair value. I think it does. I go by long-term historical SP levels & more recent comparisons, mindful that SBRY’s made new lows largely on recent news finally confirming the failed Asda-merge Jesus christ, does this stock really deserves a p/e of 18+? Fair value would be a p/e 6-7 “Long-term historical”, these are in no shape or form cheap when you equate to earnings. This is why I keep pulling you up, huge sweeping statements without any real basis. These shares should only be worth 60p-70p-80p max. Seeing them at 280p does make you think how wild the price actually was. this was the irrationality far from your irrational argument it could be argued that the SP is starting to act rationally. The only thing stopping the shares going into a freefall is the dividend. Another credit downgrade would hurt the group too. This is an extreme high risk game your playing. People need to understand.

jackdawsson 12 May 2019

Why are you here, Jackdawson? SaraRacano: How do you know that the market isn’t behaving rationally to the Sainsbury’s SP? The Sainsbury´s SP is where it is for a reason. Also if you’re behaving rationally why go into any market & pay historically high valuations for stock? Apart from the debt paid dividend. this share looks fundamentally very expensive, paying 23 p/e with a stock that has virtually no growth, who´s profit margins are coming seriously under attack. Sainsbury should have a p/e valuation of no more than 7/8. this stock is grotesquely over-priced! Sara, Why use my comments quoted from another SBRY thread in block letters to start a new one? Or why even start another thread? I’ve mentioned this before. It’s as if you’re motivated more so by mere intellectual jousting for its own sake & troll-like fishing for bites, than taking anything well-considered replies on board. Kindly note, this will be my final response here for a while. Probably until I take further profits. Not least as I need to justify nothing more to anyone on top of comments I’ve already given. But also, I’ve far bigger interests elsewhere this week. Re above quote: we know sentiment is usually a driver & often irrational. Here no less. Consider the sharp rise to 237+ on 1st May, then the sell-off to 208+ lows a week later? What much had changed? Little. Ditto SP highs to 340+ last August during the hoped for ASDA-merger. Sentiment typically includes hope, euphoria, greed, then its opposites, fear, panic, etc. Of course no-one knows for sure if SBRY’s current SP offers fair value. I think it does. I go by long-term historical SP levels & more recent comparisons, mindful that SBRY’s made new lows largely on recent news finally confirming the failed Asda-merger. The scale of selling seems another overreaction. What you claim about SBRY having “virtually no growth, whose profit margins are coming seriously under attack” isn’t borne out by SBRY’s results. That’s despite their bottom line being severely diminished by one-off costs from Argos integration & failed ASDA-merger. This from SBRY’s recent results: Screen Shot 2019-05-12 at 13.23.53.png943x162 14.8 KB

SaraRacano 12 May 2019

Why are you here, Jackdawson? to better understand markets & to what degree sentiment & irrational emotions (like fear, panic, greed, euphoria) drives them, one also needs to understand people. You patently seem to struggle with that aspect. How do you know that the market isn’t behaving rationally to the Sainsbury’s SP? The Sainsbury´s SP is where it is for a reason. Also if you’re behaving rationally why go into any market & pay historically high valuations for stock? Apart from the debt paid dividend. this share looks fundamentally very expensive, paying 23 p/e with a stock that has virtually no growth, who´s profit margins are coming seriously under attack. Sainsbury should have a p/e valuation of no more than 7/8. this stock is grotesquely over-priced!

jackdawsson 10 May 2019

Putting it another way, Jackdawson Sara, No need to patronise anyone here. Also, why not post such questions in existing SBRY threads you’ve already created? If I buy a stock, it’s tagged. That includes notifications about new posts. SaraRacano: The only way supermarkets can grow is by debt but Sainsbury´s cannot afford to pay off loans & pay dividends so it has to sell property increasing the debt. Look what happened to Tesco when it slashed its payments. Where would the floor be for the Sainsbury´s SP, should it be forced to slash dividend? This again seems to ignore reality. SBRY recently announced they cut their debt by £222m. That allowed an unexpected increase in dividends. So no divi-cut is likely anytime soon. They target a further reduction in debt of £600m over 3 years. That’s in their report. [link] Some recent increase in debt was down to huge one-off expenses. For eg. buying & absorbing Argos. Argos cost £1.4 billion. Existing debt is about £1.6 billion. But that needs perspective. TSCO’s debt is far higher. Then compare it with the debt of other FTSE 100 stocks like VOD. In November, VOD’s was stated as £32.1 billion In fact, most FTSE stocks hold debt as a matter of course. Revenues & profits also have to be factored in. So significant debt, whilst never ideal, is hardly a reason not to invest, as long as it’s manageable & we’ve a low interest environment. Latter likely to remain for years. You’re asking me where SBRY’s SP would find a floor if they slashed divi payments? Hard to be sure. But let’s assume a huge divi-cut was necessary in future. That can send SP in a downward spiral. But it depends on other fundamentals. There are also many examples where cancelled dividend plans have actually boosted SPs. Why so? Because market can view it as a proactive positive in reducing debt much quicker. For eg. when TSCO scrapped its dividend altogether on 8th January, 2015, markets were buoyed by what they saw as an impressive turnaround plan. TSCO’s SP closed 209.25. On 7th January it was a dismal 182. A gain of over 27p on cancelling dividends. Like I say, hard to make calls based on theoretical situations that may not even come to pass. - GL.