Dallas, Texas 11/15/2013 (Financialstrend) – The $46.42 billion market capped international retailer Tesco PLC (ADR)(OTCMKTS:TSCDY) with its operations centered around the Europe, Asia and U.S. Along the way, the firm also grew into a strong player in the consumer banking and insurance sector via its 100% owned subsidiary Tesco Bank.
Over the past few quarters the firm has been struggling to get back to its winning ways. Readers should note that in the early years of the decade 2000, many had predicted that this retailer could grow into a credible competitor for the likes of Wal-Mart. Convinced about the long term prospects of this U.K. based retailing giant, even the most toughest of investors, Warren Buffet had invested into the stock to the tune of close to 5% since 2006. It should not surprise readers that in the last week of October the holding company Berkshire Hathaway reduced its stake in the retailer by 1% and currently owns only 3.98% of the total stock.
Berkshire’s downgrading was quickly followed by downgrading by rating agency HSBC Securities on November 13. It has pegged the stock down from a overweight to neutral. Post the downgrade, the stock shed close to 2.5% of its market value during trading on November 14. Through the day’s trading yesterday, the stock was range bound between $17.16 and $17.36 and settled at $17.23 per share as of close of business. At current price points the stock is touching distance from its 52 week high price point of $18.51.
The downgrading of Tesco PLC (ADR)(OTCMKTS:TSCDY) by rating agencies and investors are being done since the famed retailer has been struggling to get its operations back in order. In 2001, the firm had announced a huge $1 billion revamp plan which included getting out of non profitable markets and concentration on getting back market share from its competition. It has suffered setbacks in its efforts to take on the likes of Wal-Mart in U.S and has struggled to make money from its China operations.