If done correctly, buying shares after gaining can be lucrative. Recent investors in Tesco (LSE: TSCO) Actions can confirm this. . FTSE 100 The seller of food products enjoyed an escalate in share prices by almost 20%, because year -round results were reported just over three weeks ago.

So why is the price of Tesco shares rapidly? Can a supermarket still provide sturdy phrases for investors this year and later?

Investment profits

Tesco shares beat the company before the day of April 10. For fear of intensification of the price war in the British food sector, shares fell by 17% within a month after a distance from immediate decline after the profit report was issued.

However, investors of Plucky, who put 5000 pounds in the supermarket on the day of earnings, would be able to buy 1,589 shares. Today, this item would have a market value of 5,976.23 GBP. It’s almost 1000 pounds of profit in a smaller month!

It is true that buying inventory on the day of earnings does not always succeed. That is why I focus on many years of investment possibilities, not miniature -term share prices. Despite this, Fortune would be conducive to the brave here.

Earnings and competition

Indeed, Tesco’s financial results had a lot of reaching, despite the initial negative market reaction. Special events included 10.9% of the improvement in operating profit to 3.1 billion GBP and a fresh program for buying shares worth 1.45 billion GBP until April 2026.

But the tips on the forward were cautious. At the basis of operational profits, 0.1 billion pounds will fall to 0.4 billion pounds this year. It seems that the management could be terrified of ASDY’s claim about “Quite a significant war gearbox“This would reduce prices and endure the years of penniless trade in the battle for market share.

Cruel competition is not fresh in the British food sector in a lean margin. However, ASDA price reductions almost 10,000 products suggest that the latest achievements should be taken seriously.

Tesco claims that a huge 28.3% market share, equipping it with significant benefits of scale and firepower to respond to rivals. After saying, the high network of net debt of 9.5 billion pounds is a problem because it can reduce the flexibility of the company.

Nevertheless, I think that Tesco forecasts are intentionally conservative, which gives the company a lot of freedom to ensure pleasant surprises. It seems that over time, the company’s results and competitive landscape agree, hence the recent escalate in Tesco stock price.

It is worth noting that Tesco was the second best supermarket in the latest Which? Customer satisfaction for shopping in the store, only following Marx and Spencer. ASDA, on the other hand, heals at the bottom of the table. This raises doubts as to his ability to attract customers from the largest grocery store in Great Britain, especially if the standards are falling in the escalation of the price war.

I keep my actions

In general, I think that Tesco actions are well prepared to ensure further growth. I want to keep the position I keep.

Risks about competition should not be omitted, but the price ratio of ahead to profit (P/E) of 12.84 suggests that it still has good value in the industry, which makes actions that are worth considering. In addition, there is a useful 3.7% dividend profitability to escalate the investment appeal.

Ultimately, cautious tips can be a clever move. I would not be surprised if Tesco overcame expectations.