first_img Our 6 ‘Best Buys Now’ Shares The Tesco share price has outperformed the FTSE 100 in 2020 Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Tesco (LSE: TSCO) looks set to end the year ahead of the FTSE 100. The supermarket giant’s share price is down 12.5%, just three points ahead of the Footsie’s 15.5% loss. But if Tesco isn’t ahead by 31 December, the chances are it’s going to be very close.I really thought Tesco’s year-end position would be significantly better than this. Supermarkets were among the essential traders that didn’t have to close during the Covid-19 lockdowns. Shopping practices were restricted though. And a lot of people will have held back on their spending while focusing on essentials.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But Tesco has been very flexible with opening hours in response. Still, analysts expect full-year revenue to drop around 9% for the current year. And earnings look set to fall by around a third. Tesco’s profit margins have been squeezed by the extra costs caused by the pandemic. And that has to hurt the Tesco share price.Tesco share price lagging?But there’s a rebound forecast for next year, which would take Tesco back close to pre-Covid earnings. It would put the shares on a P/E of only around 12. For the leader in the UK’s FTSE 100 supermarket sector, I think that’s cheap. And when I look at the predicted 2021-22 dividend yield of 5%, I reckon it’s even cheaper. So why the lack of investor enthusiasm?We can’t ignore the longer-term decline in Tesco’s market share. The most recent Kantar figures put Tesco’s share of the UK’s grocery market at 27%. That’s significantly ahead of second-placed Sainsbury’s on 15.7%. But Tesco used to command more than 30% of the market, and relative newcomers are slowly chipping away. Every chip puts extra pressure on the Tesco share price.Aldi’s market share has already reached 7.7%, and it’s closing in on Morrisons‘ 10.3%. I wouldn’t be surprised to see those two positions reversed before too much longer, putting Aldi fourth (behind Asda). Lidl  is also climbing the rankings, now with 6.2% of the market.Still, despite the growing encroachment from these newcomers, I reckon Tesco has one key advantage. And it’s a big one. I’m talking about its home deliveries service, which has come to the fore in 2020. Despite their reasonable performance, I don’t think Tesco shares have caught up with the potential.Shopping paradigm shiftOnline groceries shopping boomed in 2020, due to the pandemic. But I really don’t see it as a one-off switch in the UK’s shopping habits. Many have been forced to overcome the inertia and get online to do their shopping this year. And you know what I’ve been hearing from people I’ve spoken to? Things like “Oh, that was quite easy really,” and “I’ll do that again” and I think we’re in the midst of a permanent shift.Tesco was the big early mover in the online groceries business. And though Ocado might be capturing the imagination, that relative newcomer only accounts for 1.7% of the market. Tesco has it all in place, and enjoys the cumulative expertise built from its experience. I reckon that gives Tesco a significant competitive advantage over the competition, and I envisage a growing share of the online groceries market.The share price puts Tesco on my 2021 buy list.center_img Alan Oscroft | Monday, 21st December, 2020 | More on: TSCO Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesco. 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. See all posts by Alan Oscroftlast_img

The Tesco share price has outperformed the FTSE 100 in 2020

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