How to buy Tesco shares (TSCO)
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This page takes you through the history of Tesco, its latest market performance, and the best online brokers to use if you decide to get involved.
Compare the best Tesco trading platforms
If you are looking for the best place to buy Tesco stock online, look no further. The below options are all excellent candidates and have been tested extensively by our team of analysts. If you’re not ready to get started yet, keep reading for more information on the shopping giant.
77% of retail CFD accounts lose money.
How to buy Tesco stock, a step-by-step guide
Getting shares in Tesco is a simple process, even for the most inexperienced investor. The following list explains the steps you need to take to complete your investment.
- Choose a broker. As far as where to buy Tesco shares in the UK or elsewhere, you need to use an online brokerage platform. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Tesco shares.
- Place an order for TSCO stock. Now navigate to the stocks section of your chosen broker’s interface. Here, you can search for Tesco’s ticker symbol (TSCO) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to purchase and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Tesco shares will be listed in your account. Congratulations, you’ve just bought shares in Tesco! For more information on stocks and shares, explore the Invezz website.
What is Tesco? And should I invest?
Tesco (LON: TSCO) is a British supermarket chain that operates in 7 countries around the world. It is one of the largest companies in the world by revenue and the market leader in groceries in the UK.
Tesco experienced almost constant growth under the leadership of Sir Terry Leahy, from 1997 until 2011. Since then its performance has been more mixed, with a significant downturn reaching its nadir in 2014-2015 as Tesco lost market share and battled to maintain profits amidst ever-increasing competition. Since then, it has consolidated its position as the supermarket with the largest market share in the UK.
Groceries have been reliable investments in the past. Similarly, Tesco’s price can provide opportunities for more technical investors to benefit from short term trends. If this aligns with your investment goals, you can keep reading to find out more about Tesco’s position and recent past.
How has the company performed in recent years?
After its 2015 lows, Tesco stabilised and clawed back some of its value. As of the end of 2020 it was up over 50% in value from 144p five years earlier.
Over that five year period it sold off its operations in Malaysia and Thailand and raised billions that it was able to use to solidify its financial position. Amidst the coronavirus pandemic and a difficult economic environment, Tesco increased its dividend by 20%. Its stronger balance sheet even included covering for the poor performance of Tesco Bank, which had to include more provisions for bad loans and suffered along with the rest of the economy.
Extra costs that came with a surge in demand for its wares during the pandemic limited its raw revenue boost, along with drag from Tesco Bank. A minimal change in stock value over the course of 2020 was still a good performance in comparison to many other industries. The pandemic also helped it speed up Tesco’s transition towards more online sales and it is working on improving the efficiency of its online operation, which could bode well for the future.
Is it a good time to buy Tesco shares now?
Supermarket chains can be a defensive, steady investment and Tesco offers a good dividend yield. It is one of the few industries to have not been hit too badly by the coronavirus pandemic, with a big jump in demand making up for increased costs. It’s also possible that the pandemic has sped up Tesco’s modernisation towards a more online, UK-focused brand, which could be good news for investors. As is the fact it has been able to increase its dividend and plan a share buyback scheme to offer a larger return to shareholders.
Tesco remains the dominant player in UK groceries. The fact remains however that groceries is an especially competitive industry. In the UK, low-price supermarket chains like Aldi and Lidl offer an alternative to the big four of Asda, Morrisons, Sainsbury and Tesco. The industry operates on thin margins already and it’s worth keeping an eye out for any signs of a new price war, which would erode these even further and put Tesco under pressure.
Before investing you should consider your goals as an investor. You might want to explore the competitive landscape and carry out fundamental analysis of Tesco’s performance. You can keep up to date with all the latest news and analysis below. We regularly publish analysis about particular stocks and markets to help our users find the best opportunities. You can find our most recent bits of market analysis below.
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What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Tesco shares.
- Research the company. You should always examine the fundamentals of a company before investing. What is Tesco? How did the company get its start? How did it grow? Is Tesco’s revenue and profit growth picking up? Is the company innovating? The more you know about Tesco, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it all works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the key fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our reviews of brokers can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our stock news page can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Tesco shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for Tesco stock, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Tesco shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for an extended period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Tesco’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Tesco shares outright or use CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors with an eye on the long-term tending to go for share dealing, and those looking for gains in the short-term pursuing an aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from consistently rewarding dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will provide an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into TSCO shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in TSCO stock on this page. If, however, you’re ready to get involved now, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to purchase the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to invest using a specific payment method, such as PayPal. Not all brokers accept every payment method, but by using our comparisons, you can search for the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >