Private Investor: Every little helps but bigger is better

When it comes to Tesco, it would seem, for many people, it is far too big already. With 30 per cent of the groceries market, profits of over £2bn and a finger in every pie from pet insurance to broadband, Tesco is just too, well, big - too intrusive, too powerful. There is to be yet another Competition Commission inquiry into the supermarkets sector, and hardly a week goes by without another whinge about Tesco's vast corporate influence.

Most of Tesco's success has been to the benefit of its customers rather than its shareholders. No one makes the great British public do their shopping there, you know. They go because of its blend of value, quality and, above all, convenience. Indeed, the proof that Tesco doesn't have some divine right to an ever-increasing share of our spending is evidenced in last week's figures, which revealed a less than sparkling overall increase in sales. Thus the shares slipped.

The shares also fell, I suspect, because the market pretty quickly worked out that the supposed new emphasis on Tesco serving its shareholders as well as it treats its customers may not be much more than marketing flannel - two for the price of one you might say. The funds from the sale and leaseback of Tesco's huge property portfolio, for example, will be directed towards the company's equally formidable programme of capital expenditure here and abroad. The share buyback is also relatively modest for a firm of this size. The dividend increase of 14 per cent, meanwhile, is a genuine improvement, but follows a few years of much lower growth. Still, every little helps.

But even if the Competition Commission and Tesco's rivals together manage to stymie its progress in the groceries market, it can still make much more ground in non-food items - everything from books to homewares (and pet insurance and broadband, of course). Plus there's the international expansion of Tesco in places as diverse as Hungary and Thailand, with an increasingly cautious exposure to the United States. That, it would seem to me, will keep chief executive Sir Terry Leahy as busy as the anti-Tesco lobby. I'm happy to buy more shares in Tesco, then, and have done so, adding a few more at 321p. Investors are said to be only interested in a quick buck, but I'm happy to be patient and back a business that is happy to invest in itself.

Having said that, however, I'm quite interested in making another short-term gain, courtesy of a foreign company taking over one of our national institutions. In case you hadn't noticed, the Government has signalled that it might not have such a problem with Gazprom taking over Centrica, which owns the British Gas retail operation.

I can remember a time when there was such a thing as a national energy policy and the Government would give a guiding hand to the nationalised industries to ensure that British natural gas was a "premium fuel", far too precious just to be burned up making electricity and directed instead directly to industrial applications and domestic heating. Coal, not much good for anything else, and plenty of it, was to be devoted to powering the lights.

The idea of the Russians owning our gas supply was unthinkable. Then again, so was the notion of French and Germans owning bits of the electricity and water industries, let alone the Spanish running our banks. Nothing, it would seem, is sacred these days, even when there is no reciprocity from other countries. A lot of people, who got windfall shares from privatisations and demutualisations, will make a few quid from all this foreign M&A activity, but I wonder whether as a nation we'd be better off looking to the long term, Tesco-style.

Another long-term investor is Jim Cramer. Little known here, he is a huge influence in the States, where he has his own TV shows, website and the rest. A news item in The Independent mentioned him as one of the assets of TheStreet.com. That was one of the great dot.com boom stocks that crashed and fell - but survived. Only trouble is I can't find a broker who'll buy the shares for me.

s.ogrady@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Life and Style
Google celebrates the 126th anniversary of the Eiffel Tower opening its doors to the public for the first time
techGoogle celebrates Paris's iconic landmark, which opened to the public 126 years ago today
News
Cleopatra the tortoise suffers from a painful disease that causes her shell to disintegrate; her new prosthetic one has been custom-made for her using 3D printing technology
newsCleopatra had been suffering from 'pyramiding'
Life and Style
Baroness Lane-Fox warned that large companies such as have become so powerful that governments and regulators are left behind
techTech giants have left governments and regulators behind
News
people
Arts and Entertainment
Coachella and Lollapalooza festivals have both listed the selfie stick devices as “prohibited items”
music
Sport
Nigel Owens was targeted on Twitter because of his sexuality during the Six Nations finale between England and France earlier this month
rugbyReferee Nigel Owens on coming out, and homophobic Twitter abuse
Arts and Entertainment
Tracey Emin visits her 1990s work ‘My Bed’ at Tate Britain in London, where it is back on display from today
artsBut how does the iconic work stand up, 16 years on?
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Ashdown Group: Trainee Consultant - Surrey/ South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Recruitment Genius: Client Services Assistant

    £18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Day In a Page

    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat
    Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

    Saudi airstrikes are fuelling the Gulf's fire

    Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
    Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

    The only direction Zayn could go

    We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
    Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

    Spells like teen spirit

    A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
    Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

    If fashion is a cycle, this young man knows just how to ride it

    British designer Jonathan Anderson is putting his stamp on venerable house Loewe
    Number plates scheme could provide a licence to offend in the land of the free

    Licence to offend in the land of the free

    Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
    From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

    From farm to fork in Cornwall

    One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
    Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

    Robert Parker interview

    The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
    Don't believe the stereotype - or should you?

    Don't believe the stereotype - or should you?

    We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor