Global Investing Roundup

Tesco Gets a Boost From Global Business; AgFeed Buys the Farm; Marshall & Ilsley Banks a Profit; Hypo Shares Down a Third

  • Tesco PLC (TSCD), the largest retailer in Britain, bucked the recent trend of poor sales among U.K. retailers when it announced its holiday sales results, AFP reported. Sales were up 12.8% overall for the six weeks ended Jan. 5, the company reported. However, most of that growth was from its international divisions, which were up 26.9%. Growth domestically for the company was only 3.1% on a comparable stores basis. Currently, almost 75% of sales are in the United Kingdom, but the international business is growing much quicker than domestic operations. The company highlighted the 30% sales growth in Europe as well some of the countries it recently entered - sales in Turkey were up more than 80%, and Malaysian sales were up more than 60%. In a separate announcement, Tesco announced that it had bought back 5.5 million shares from Lehman Brothers Holdings Inc. (LEH) as part of the brokerage firm's sell off.
  • China-based AgFeed Industries, Inc. (FEED) announced yesterday [Tuesday] that it had purchased a controlling interest in five hog farms in the Jiangxi province for $5.5 million, the company said in a statement. In each case, the original owners kept a minority ownership and have agreed to stay on as operational management. Under the terms of the deal AgFeed is paying $1.06 million at closing, with the balance paid in two installments in February and March of this year. In addition, the company will pay $4.75 per hog sold to the original owners as lease payments for the underlying land. AgFeed is primarily in the premixed animal nutrition business and just entered into hog farming in 2007. AgFeed President Songyan Li said that the farms are the latest step in the company's plans to grow its hog farming operations. He feels that as long as hog prices remain high and demand for pork remains high - which they should - AgFeed is positioned to benefit greatly.
  • While all eyes were on the disastrous earnings report from Citigroup Inc. (C), U.S. bank Marshall & Ilsley Corp. (MI) reported fourth-quarter results that contained a $526 million gain from the spin-off of Metavante Technologies, Inc. (MV). Without the gain, continuing operations showed a loss of  $24.5 million compared to a $151 million profit the prior year, Reuters reported. Marshall and Ilsley also had continuing credit problems in the fourth quarter, with provisions for loan losses leaping to $235.1 million compared to just $18.3 million in 2006. Another bright spot in the report was strong growth in the wealth management business, where division revenues were up 21% to reach $70.1 million. The company also reported that it bought back 4.5 million shares of common stock under its authorized buyback plan that allows for the repurchase of up to 12 million shares annually.
  • Shares of German commercial lender Hypo Real Estate Holdings AG (PINK: HREHF) dropped more than 30% yesterday (Tuesday), as its stock prices plummeted on news that full-year profits for 2007 dropped 27%, the Financial Times reported. The company said it may cut its dividend by one-third to rebuff the damage from the nearly $594 million in charges for losses on credit investments.