Is Morrison's CRE Undervalued?

Grand Metropolitan's P/E ratio is noticeably lower when compared to the other companies within its segmented segments. We found that these low P/E ratios combined with increased profits made Grand Metropolitan a potential target for corporate raiders, i.e. takeover risk.

The purpose of this report is to critically analyse the financial ratio results of Morrison 2008 and 2009 as an equity analyst and compare it with like for like by using Tesco supermarket.

Profitability and liquidity ratios are impressive and continue to reflect the company’s ability to succeed and compete with archrival and industry powerhouse Home Depot. The stock market ratios have fluctuated throughout the period analyzed, largely due in part to world events beyond management’s scope of control and the American public’s uncertainty in the market as a whole. All in all Lowe’s is forecasted to continue its growth and upward trend in all indicative areas and remain a power in the retail hardware, special orders and home improvement market, trespassing on territory once clearly dominated by Home Depot, the worlds largest hardware retailer. Lowe’s is a favorite amongst institutional investors as their holdings make up 80.80% of common stock issued.

Another strength might have been its slightly odd, socialist structure. John Lewis Partnership is owned by its employees who share out a bonus pot every year. All decisions are made by the partners and on the partner’s behalf. This structure of the Partnership that might be a hindrance to growth in the good times, appears to have galvanised employees in the bad times, since staff turnover – the percentage of staff who leave every year – was 12pc, compared with a retail average of

To begin with it is important exactly how far and quick Morrison has fallen. What it calls fundamental benefits was £901m two years back. That tumbled to £785m a year ago, and it is gauge to be in the middle of £325m and £375 in the present year.

Individual store owners could also be considered as buyers - buyers of a tenancy from the areas landlords. Our analysis showed that there were very few empty shops in the area (less than 5). Nearby areas such as the Glenferrie shopping

profit from disposal of properties in 2010 was £27m and £108m in 2011 which shows a dramatic

Sarah Newell’s company Newell Manufacturing & Distribution is currently valued to an amount of $132,508,608 through the use of discounted cash flow models. It is suggested that she sells the company as a whole. The reasoning for selling of the design division is based off of the positive correlation between the equity valuation of a company in the industry and its ability to generate sales. Consequently, there is no direct relationship between the amount of sales and the number of households a company has in its mailing list. Esteban Armijo’s need for a design company with over 3 million households in its mailing list will provide the Sarah an opportunity to sell the division at a price which reflects revenues and an additional premium that

A number of papers have argued that equities with high book value to share price ratios and/or high earnings to

* In the UK, several forces at play are making life difficult for those who want to promote high streets, not least the continued growth of online sales, plus the total costs of high street property compared with footfall and sales densities. (RW 2012, P.58)

To test the correlation between underpricing using first day return as dependent variable and all other variables as independent variables, we have run a pair-wise correlation. The matrix shows that only auditor dummy and ebitda before have a positive correlation with the first day return. However, with the p-value to test the significant level of the result, all independent variables generated have relatively large p-values. In this case, they are tested to be statistically insignificant to explain the underpricing except share outstanding has weaker correlation to the underpricing.

Growth plans and opportunities. Presently, IKEA aims to open 10-20 new retail outlets annually, with forecast of double sales target in a timeframe of five years. These targets can be accomplished through strict control functions and monitoring of inventories to ensure keeping costs at the minimum (Kelly, 2010, p. 3). In fact, in spite of inflation rate and rising cost of raw materials and fuel, IKEA has managed to reduce its average costs by 0.8% in FY2012 (“IKEA Group,” cited in “Strategic Supply,” 2013, p. 4).

1. How effective is Morrison’s business and financial strategy over the three year period under review?

Economic Factors are the usually the most concerning for Tesco as these have the most

Furthermore, given the challenging market conditions in 2008 and 2009, it would be interesting to analyze how Harvey Norman responded to the economic downturn. The company observed “a significant improvement in net profit from underlying business operations during the last 6 months of FY2009”, according to Harvey Norman’s 2009 Annual Report. It would be insightful to see what strategies and tactics were used by Harvey Norman to achieve this result, especially in the integrated, franchise and property system sectors since these were reported by the company to be “resilient in achieving strong results and growing market share in all key product categories.”