Tesco safety net

With the markets looking volatile and uncertain now is not the time for panic selling. It may be a good time to get into Tesco though.

I sold my Tesco holding earlier this year when the share price sailed through 440p. The share price is now down to just above 400p and the story is essentially unchanged.

Tesco is growing slowly in the UK (about 9%) and rapidly overseas (about 25%.) International sales are now about one quarter of total group sales.

In November this year Tesco are launching their US operation. I expect significant media interest and an associated share price uplift when this happens so now would be a good time to jump in, before people start talking about it.

Tesco's property portfolio is worth about 300p per share, and people always need to buy food, making them a popular defensive choice. I expect Tesco to outperform the market if it drops further and to do fine if the market rises.

The only problem with buying into Tesco is finding something to sell to make way for it! Now is not a good time to sell one of my bank holdings or British Land. Maybe I will take some profits on BHP Billiton and put the money in the safe hands of Terry Leahy.