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Tesco PLC, Wm. Morrison Supermarkets plc And J Sainsbury plc All Crash To 52-Week Lows

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Now, we know things aren’t going too well for our supermarkets, especially as we have just heard that the hole in first-half accounts at Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US) is bigger than expected and that chairman Sir Richard Broadbent is leaving.

And that news may well justify Tesco’s share price having fallen to a 52-week low. It slipped as far as 164p on 24 October, for a devastating 54% fall over 12 months. But it’s not just Tesco.

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They’re all falling

morrisonsWm Morrison Supermarkets (LSE: MRW) (NASDAQOTH: MRWSY.US) shares fell to 150.8p on the same day, which is only a smidgen above their 52-week low of 150.6p set on 16 October.

Morrison’s woes are well documented — as the last of the big supermarkets to latch on to the importance of online trading, and tardy to notice how well smaller multi-format stores were doing for its competitors, the company saw its shares shaken out as the weakest of the bunch when crunch time came for the sector.

Over 12 months, Morrison shares are down 46%.

But what has J Sainsbury (LSE: SBRY) done wrong? It recently won five awards at the Retail Industry Awards, and got the in-store bakery of the year nod at the Bakery Industry Awards, and that doesn’t seem so bad.

But it’s been 52-week low time again, caused by the necessity of entering into the current price war, and Sainsbury shares scraped 209.5p towards the end of September. The price has perked up a little so far in October to 239p, but it’s still down 40% over 12 months. It’s the smallest fall of the three, but still a big crunch.

Is this the bottom?

One of these days, we really will hit the bottom for the sector, and this 52-week triple-whammy suggests we might be getting very close.

Tesco is on a forward P/E of only 9.1, and that would only makes sense if there’s not going to be any recovery for a few more years — and new boss Dave Lewis strikes me as an impressive figure who will take no nonsense and is determined to turn things round.

Where Morrison’s recovery is going to come from is anybody’s guess right now, and the shares are on a higher P/E of 12. Forecast dividends are high, but lack of cover leaves me unconvinced.

The best?

Sainsbury is on a forward P/E of under 9, and its forecast dividend yield of 5.5% would be adequately covered — I suspect there might be a small cut, and there is a fall forecast for 2016, but there’s plenty of room to accommodate that.

But why do Sainsbury shares deserve to be so lowly-valued? I just don’t think they do.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of Tesco. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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