If I’d bought £10k worth of Tesco shares 3 months ago, here’s how much I’d have now

Tesco shares have risen significantly over the last three months. Here’s how much a £10,000 investment three months ago would be worth today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Mature friends at a dinner party

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

When I covered Tesco (LSE: TSCO) shares in October, I said that they looked attractive. At the time, the shares had just had a big pullback and they appeared to offer some value.

Fast forward to today, and I’m kicking myself for not buying a few. Since that article, Tesco’s share price has soared. Here’s a look at how much I’d have today if I’d bought £10k worth of shares three months ago.

Created with Highcharts 11.4.3Tesco Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

22% share price gain

On 14 October, Tesco shares ended the day at 202p. So, let’s say I bought them at that price. A £10k investment would have got me 4,950 shares (ignoring trading commissions).

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Since then, the shares have risen to around 246p — roughly 22% higher.

This means that my £10k investment in Tesco would now be worth around £12.2k. That’s an excellent return in just three months.

It’s worth noting that I would not be eligible for the dividend that Tesco is set to pay out on 25 November (3.85p per share) if I’d bought the shares on 14 October.

That’s because the ‘ex-dividend date’ for that particular dividend payout was 13 October. This means that I needed to own the stock on 12 October to be eligible to receive that dividend.

I wouldn’t be complaining though. I’d be pretty happy with a £2.2k profit in just three months.

It pays to buy shares when the market is down

One key takeaway here, to my mind, is that it can pay to buy shares when the market is having a bit of a wobble.

Three months ago, global stock markets were experiencing some turbulence due to concerns over inflation and interest rate hikes.

At the time, the UK’s FTSE 100 index was below 7,000 points (it’s now above 7,800 points). And Tesco’s share price was depressed.

By following the advice of legendary investor Warren Buffett, and buying some shares while others were panicking, I could have generated some decent gains.

Is it too late to buy?

Do Tesco shares still offer a bargain today?

Well, at today’s share price, the forward-looking price-to-earnings (P/E) ratio here is just under 12.

At that multiple, I think the stock is pretty close to being fully valued. In other words, I wouldn’t expect to see big gains from here, unless earnings rocket higher in the years ahead (which I think is unlikely due to inflation).

I still think the shares could play a valuable role in my portfolio from a defensive perspective. The dividend yield here is currently over 4%, which is attractive.

However, I’d prefer to buy them at a slightly lower multiple in order to give myself the best chance of generating a profit.

So, I’m going to keep them on my watch list for now.

All things considered, I think there are a few other UK stocks that offer a bit more value than Tesco at the moment.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesco Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

Down 26% with a 7% yield! Could this little-known FTSE 250 gem make a comeback?

Mark Hartley considers the long-term prospects of FTSE 250 recruiter Page Group. Weak results have sent the price tumbling but…

Read more »

Investing Articles

Analysts are calling Diageo shares a strong buy! Are they mad?

Analysts still have faith in Diageo shares, with 10 of them giving it the highest possible stock rating. Harvey Jones…

Read more »

Investing Articles

Up 17% in 2 days! At last, some good news for those interested in the JD Sports share price

The JD Sports share price jumped after the company said trading was in line with expectations. Our writer considers what…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Is this FTSE 250 retailer a falling knife or a bargain buy?

Our writer Ken Hall has an under-pressure FTSE 250 retailer on his radar. Is it a bargain hiding in plain…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

Building a second income stream in 2025 is now more important than ever

With the backdrop of today's economic landscape, Mark Hartley investigates the importance of a second income and how to build…

Read more »

Google office headquarters
Investing Articles

Down 29% and 26%, these ‘Magnificent 7’ growth stocks are still on sale!

Both of these mega-cap growth stocks are more than 25% off their highs right now. And Edward Sheldon believes they…

Read more »

Investing Articles

My favourite UK stock is up 365% in 5 years and analysts still say it’s a strong buy!

Harvey Jones loves this top UK stock but was wondering whether it would finally run out of steam. Its response…

Read more »

Investing Articles

Is the stock market going to crash when the tariff window expires?

The stock market’s rallied on news of a 90-day pause to some US tariffs. But could it be set to…

Read more »