With a 30% share of the UK grocery market, investors could be forgiven for thinking that Tesco’s growth days are behind it. However, Tesco still has a strong long-term growth story to tell.

Domestically the forthcoming launch of Tesco Bank looks like a canny move to capitalise on the current distrust of UK banks and capitalise on its strong brand and store network.

Internationally Tesco offers significant exposure to emerging markets particularly in Asia which is forecast to grow to form 60% of the world’s GDP.

Despite this defensive-growth profile, an attractive combination in today’s uncertain economic environment that is unrivalled by its UK supermarket peers, it is the lowest rated trading on a PE ratio of 13.9x, compared with Sainsbury’s 15x and Morrison’s 16x.

With a well covered 3% dividend yield to boot that looks unwarranted and we believe the stock should form a core part of any investor’s shopping basket.