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Why I’m Optimistic About J Sainsbury plc

As I’m sure my fellow Fools will agree, one of the key facets of investing is being in the right place at the right time.

Indeed, this belief can be applied to subjects beyond investing, from business to romance, from sport to pretty much anything else.

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However, for private investors like me, the idea of being in the right place at the right time can perhaps best be thought of as being exposed to the best asset classes in the best regions at the right time. In other words, allocate capital to the right countries, sectors and companies, and your portfolio should perform pretty well.

So, I was very pleased to read that UK retailers are adding jobs at the fastest rate since May 2002, as some kind of optimism sweeps across the country, boosting sales according to a recent CBI survey.

Indeed, the CBI said that sales increased at their fastest pace since November, with recreational goods, clothing and food being in particularly high demand. Furthermore, for the first time since January 2011, total sales were above average for the time of year thus improving expectations for the rest of 2013.

Reading this information made me wonder how best I could take advantage of the encouraging news. How best could I be in the right place at the right time to profit from this?

With food and clothing being two of the most in-demand items and the UK being the focus of the data, Sainsbury’s (LSE: SBRY) (NASDAQOTH: JSAIY.US) seems to be the most obvious choice.

Not only is it solely focused on the UK, the vast majority of its sales are from food and clothing. Therefore, it should benefit from increased sales in the short term, as the data highlighted.

Furthermore, it has been steadily increasing market share over the past few years, with like-for-like sales being positive for just under three years. The likes of Tesco and Morrisons, although I am also bullish on their prospects, have been unable to string anything like such a run together over the same time period.

Of course, Sainsbury’s also offers an impressive yield of 4.2% and, when you consider that shares trade on a price-to-earnings (P/E) ratio of just 12.9, they seem good value as well. This value is perhaps best highlighted by comparing Sainsbury’s to its industry group and to the FTSE 100, which trade on P/Es of 17.4 and 15 respectively.

Of course, you may already hold Sainsbury’s or be looking for other potential yield plays. If you are, I would recommend you take a look at this exclusive report that details The Motley Fool’s Top Income Share.

It is completely free and without obligation to view the report and it could be just what your portfolio needs. Click here to take a look.

> Peter owns shares in Sainsbury’s. The Motley Fool owns shares in Tesco and has recommended shares in Morrisons.

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