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FTSE 100 watch: is the Tesco (LON:TSCO) share price cheap at 216p?

13th Aug by Jack Brumby

Tesco (LON:TSCO) is the UK's leading grocer. After a tough few years that has seen it grapple with food deflation and market gains from overseas discounters such as Aldi and Lidl, the group now appears to be turning around its fortunes.

Right now the Tesco share price appears to represent solid value, as shown in the group's Value Rank of 57. That might not sound great now, but, with profitability showing signs of growth, this could improve in the future. 

Let's explore Tesco's Value Rank in more detail.


Digging into Tesco's Value Rank

Looking at Tesco's StockReport, we can see that the group has a:

  • Rolling price to book value of 1.43,
  • Trailing twelve month price to earnings ratio of 13.4
  • Trailing twelve month price to free cashflow of 31.5
  • Rolling dividend yield of 3.19%
  • Trailing twelve-month price to sales ratio of 0.33

This combination of financial traits suggests that, while Tesco stock is not the cheapest, it is far from expensive at these levels and is worth considering - especially if it is exposed to other positive stock market factors as well.

Studies indicate that combining factors such as Value, Quality and Momentum is a more effective way of outperforming the market over longer time frames. That's why we have constructed our StockReports to give an instant impression of how well exposed Tesco (LON:TSCO) is to these three factors. We go into greater detail on factor investing in this video

Stockopedia helps you to identify return-enhancing factors such as Quality, Value and Momentum by analysing thousands of data points every day. To find out more about you find investment opportunities and analyse your portfolios then take one of our two-week free trials and have a look around.

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