ukdaytrader
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I've just performed some analysis both companies and thought I would share it with the group.
It appears that either Sainsbury is undervalued or Marks and Spencer is overvalued. Not sure which it is.
My rationale for this is looking at both market capitalisation and turnover. M&S has proportionally higher market cap if you compare turnover to Sainsbury.
That is fine in so far as M&S margin is greater.....at least it used to be, but not anymore.
It has started introducing branded products as its market shares has been decreasing. Therefore the valuation of the company cannot be on the basis of higher margins in comparison to its peer group. Its margins will now be the same as Tesco / Sainsbury.
One other point to note is that M&S long term strategy overseas has not been great and its management lack the expertise in geography outside of the UK, Sainsbury is however much better place for this overseas strategy.
You will probably need to hold this position for around a month. There has already been overperformance on Sainsbury compared to M&S for the last month, however I think there is still someway to go.
I have done a much fuller report which you can have access to for £5,000.
Note : I know nothing about spread-betting, I only use CFD's.
It appears that either Sainsbury is undervalued or Marks and Spencer is overvalued. Not sure which it is.
My rationale for this is looking at both market capitalisation and turnover. M&S has proportionally higher market cap if you compare turnover to Sainsbury.
That is fine in so far as M&S margin is greater.....at least it used to be, but not anymore.
It has started introducing branded products as its market shares has been decreasing. Therefore the valuation of the company cannot be on the basis of higher margins in comparison to its peer group. Its margins will now be the same as Tesco / Sainsbury.
One other point to note is that M&S long term strategy overseas has not been great and its management lack the expertise in geography outside of the UK, Sainsbury is however much better place for this overseas strategy.
You will probably need to hold this position for around a month. There has already been overperformance on Sainsbury compared to M&S for the last month, however I think there is still someway to go.
I have done a much fuller report which you can have access to for £5,000.
Note : I know nothing about spread-betting, I only use CFD's.
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