1 FTSE 250 stock I’d buy right now

The cost-of-living crisis could be a disaster for restaurant chains, but this FTSE 250 stock might have a trick up its sleeve.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

White middle-aged woman in wheelchair shopping for food in delicatessen

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

FTSE 250 stock Greggs’ (LSE: GRG) share price is up 63% since September. That’s a stellar return compared to the rest of the FTSE 250 which is up around 13%. 

Created with Highcharts 11.4.3Greggs Plc PriceZoom1M3M6MYTD1Y5Y10YALL8 Jun 20228 Jun 2023Zoom ▾Jul '22Sep '22Nov '22Jan '23Mar '23May '23Jul '22Jul '22Oct '22Oct '22Jan '23Jan '23Apr '23Apr '23www.fool.co.uk

Here’s why the bakery chain’s stock grew at five times the pace of the index, and why I see still see it as a buy right now.

Five-year plan

Greggs has been a terrific company for growth in recent decades. Between 2013 and 2021, the shares shot up 719% to give investors eight times their money back in eight years. 

Should you invest £1,000 in Greggs Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Greggs Plc made the list?

See the 6 stocks

Long-term growth has been excellent too. In the last 30 years, shareholders netted a spectacular 4,592% increase. That would have turned £1,000 into £46,920.

Sadly, I didn’t own the shares to enjoy those returns. But the company is eyeing up further growth with its ambitious five-year growth plan.

Geared for growth

The firm’s plan starts by it continuing to grow its stores. Last year saw 147 open with a further 150 planned for the current financial year.

But the company is looking in other areas too. Over 500 of its bakeries are now open until 8pm, and its Late Trade Pizza Deal has been helping sales later on in the day. 

Healthier products like the new Sweet Potato Bhaji and Rice salad bowl could expand revenues as well. 

More left-field ideas come in the way of the firm’s partnerships. One with Primark to sell Greggs branded clothing and merchandise was such a success that two more collections are in the works. 

All this saw total sales shoot up 17.1% to £609m, it said in the May 16 trading update. 

The signs here are that this is a solid and well-managed business. One that’s geared for growth, and could be a great one to hold for another 10 years. 

It’s also well-placed to possibly join the FTSE 100 at some point with its current market cap at £2.8bn. The smallest companies on the index are around £3.1bn-£3.2bn at present. 

69% positive opinion

Zooming out a little, the big issue for food chains is the cost-of-living crisis. Is this growth sustainable as people have fewer pennies to eat out?

Well, I’d say Greggs might be ok here seeing as it’s one of the cheapest places from which to pick up a meal on a high street.

And the company is so well thought of that I can’t see customer numbers dropping too much. It received a 69% ‘positive opinion’ in this 2022 poll that made it the most-liked restaurant chain in Britain.

If I had spare cash

My biggest risk is that a price-to-earnings ratio of 22.9 isn’t cheap. So a certain amount of future growth is already in the price. 

But on balance, Greggs looks like a great stock to me. I’d buy it right now if I had spare cash at the moment.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Array of piggy banks in saturated colours on high colour contrast background
Growth Shares

Here’s what analysts expect for the Tesco share price in the coming year

Jon Smith runs through the outlook for the Tesco share price using both his own opinion (and research) and that…

Read more »

Night Takeoff Of The American Space Shuttle
Investing Articles

This ex-penny stock jumped 16% today! Should I buy it for my ISA?

Our writer revisits a small-cap UK stock that he passed up on last year for his Stocks and Shares ISA.…

Read more »

Two female adult friends walking through the city streets at Christmas. They are talking and smiling as they do some Christmas shopping.
Investing Articles

How much do you need in an ISA to target a £2,500 monthly income?

Harvey Jones thinks FTSE 100 shares are a brilliant way to generate a long-term second income stream, and names a…

Read more »

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

These ‘boring’ FTSE 100 dividend stocks just hit 52-week highs!

Who needs to be part of the AI-frenzy when certain dividend stocks are making an absolute packet for more conservative…

Read more »

Businesswoman calculating finances in an office
Investing Articles

This FTSE 100 stock is forecast to beat Rolls-Royce in the coming year — and it’s only £1!

Rolls-Royce has been the FTSE 100 star of 2025, but analysts think this £1 homebuilder could deliver over three times…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Growth Shares

Down 86% over five years, this FTSE stock could be nearing the bottom

Jon Smith points out a FTSE share that has been beaten up in recent years but could start to show…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

This is nuts. When’s the stock-market crash?

Share prices keep hitting record highs in 2025. The bad news for investors is that asset prices look inflated, which…

Read more »

Santa Clara offices of NVIDIA
Investing Articles

AI wars: is the Nvidia share price under threat from rival AMD?

Up 56% in a year, the Nvidia share price looks unstoppable. But a new AI chip from rival AMD threatens…

Read more »