BUZZ-View from the buyside: S&W closes Tesco short as co likely to win trolley fight

** Tesco (Xetra: 852647 - news) 's sheer size and ongoing turnaround could see it nudge ahead of other large UK supermarkets getting squeezed by up-market chains and hard discounters, according to Smith & Williamson fund manager Mark Swain

** Swain, a co-manager of firm's long/short Enterprise fund, closed short position in Tesco (earlier this yr), still short Morrisons & Sainsbury's

** UK's Big Four grocers (including Wal-Mart's Asda ) battling over mid-tier mkt which is being squeezed by Waitrose & Marks & Spencer (Other OTC: MAKSF - news) at top & Aldi & Lidl at bottom

** While Swain reckons Tesco probably can't fight top or bottom tier, as market leader has best chance vs mid-tier (can be price leader & squeeze others)

** In sign Tesco's turnaround under new CEO gathering pace, co recently posted strongest sales performance in 18 mths, & impacted Asda, Kantar said (market awaits info on how price war affecting margins in April FY)

** Tesco down 16 pct yr-on-yr but up about a third over past 3 mths (vs >10 pct YTD gains from Morrisons & Sainsbury's)

** Morrisons, late to move into better-performing parts of mkt -- convenience stores & online -- most borrowed stock on FTSE 100, followed by Sainsbury's, Markit (NasdaqGS: MRKT - news) data shows (RM (LSE: RM.L - news) : tricia.wright1.thomsonreuters.com@reuters.net)