Should Tesco's Dave Lewis Stay Put?

The Week: Morningstar columnist Rodney Hobson says the market has overreacted to Gregg's results and wonders why Tesco boss Dave Lewis is jumping ship

Rodney Hobson 4 October, 2019 | 9:38AM

greggs

Even the fabled vegan sausage roll couldn’t save Greggs (GRG) shares from an ignominious collapse after the food retailer’s latest update. There were lessons for investors in spotting buying opportunities and the difficulty of trying to catch the bottom of the market.

An Overreaction

On the surface it was another great set of trading figures, with total sales up 12.4% in the 13 weeks to 28 September and company managed shops up 7.4% on a like-for-like basis. However, although most retailers would die for such growth, this actually represented a slowdown from the first half of the year and feeshares promptly slumped 8%, which I felt was a gross overreaction. The third quarter was up against particularly strong comparatives in the same period last year so the latest figures were not at all bad.

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About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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