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There are various the reason why I may not be capable of make investments as a lot as I hope to subsequent yr. There could be loads of shares within the FTSE to purchase, however I may not have a lot cash. Or I might need an excessive amount of publicity to the inventory market and want to avoid wasting money as an alternative. Regardless of the cause, if I may solely choose one inventory to purchase, I believe I do know what it might be.
Good momentum
The corporate is Greggs (LSE:GRG). The corporate is within the FTSE 250 and went public again in 1984. Over the previous yr, the share value is up by a modest 6%.
One of many the reason why I’d choose this inventory is as a result of robust monetary efficiency over this yr. Take the Q3 buying and selling replace for instance.
Like-for-like gross sales for the quarter by means of to the top of September had been up 20.8% versus 2022. It is a massive bounce, particularly once we issue within the development trajectory over the previous few years. To have the ability to submit such a wholesome beat in figures regardless of 2022 additionally being a robust yr may be very spectacular.
2023 ought to end off with between 135 and 145 web retailer openings. This highlights that whereas some companies are pulling again from bodily places, Greggs is pushing ahead.
Nicely positioned for subsequent yr
One other issue to contemplate is the outlook for 2024. Let’s say that issues worsen within the UK and all of us must tighten our belts somewhat. I believe that Greggs will do properly out of this, with folks switching from costlier bakers and low retailers to go to Greggs as an alternative.
Alternatively, let’s say subsequent yr marks a monetary restoration for the economic system. In that case, I’d nonetheless anticipate Greggs to carry out strongly. It’s properly positioned with new shops to seize new prospects who all of a sudden really feel extra snug in spending extra on food-to-go.
After all, a danger is that prospects flip throughout good occasions and select to go to costlier choices. However even with this, I really feel Greggs is in a robust place no matter occurs right here within the UK subsequent yr.
Development primarily based on the long run
With a price-to-earnings ratio of 20.73, Greggs inventory is costlier than the FTSE 250 common. It’d properly be the case that I may discover a cheaper various to contemplate shopping for.
Nonetheless, like different development shares, I’d be shopping for Greggs shares for efficiency in 2024 and past. I anticipate earnings to proceed to develop (as they’ve finished in earlier years). On that foundation, I’m not too anxious concerning the share value in relation to present earnings. Quite, after I contemplate the potential improve in earnings down the road, I believe the inventory is a smart buy now anyway.
I hope to have the ability to purchase a number of shares subsequent yr, to additional diversify my portfolio. But if I needed to simply choose one proper now, I’d purchase Greggs inventory. I’m going to buy the inventory for my very own portfolio earlier than year-end.
