I was right about the Greggs share price (LSE: GRG) soaring!

The Greggs share price has leapt by a quarter in just four months. But after a great Q3 trading update, would I buy this pricey share today?

| 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.

Greggs (LSE: GRG) is a wonderful British success story. The bakery chain has grown to become one of the UK’s biggest providers of ‘food to go’. Before it was a household name, Greggs started out from humble origins. But the group — and the Greggs share price — have grown to be a huge triumph.

The Greggs share price explodes

The Greggs story dates back 82 years to 1939, when John ‘Jack’ Gregg started selling baked goods in Gosforth, Tyneside. Today, despite staffing disruptions caused by Covid-19, Greggs employs close to 20,000 people across 2,146 shops. As a go-go growth business, Greggs increased its yearly sales every year from 2011 to 2019. But then came the coronavirus, which forced the chain to close outlets during lockdowns. As a results, sales — and the Greggs share price — slumped in 2020.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

From mid-2018 to mid-2019, the Greggs share price more than doubled, catapulting the firm up the FTSE 250 index. However, as Covid-19 went global in early 2020, the stock collapsed, more than halving in value. This would have been a wonderful opportunity to buy into the Newcastle upon Tyne-based business. On 2 November last year, the stock traded at a 52-week low of 1,201.92p. How I’d have loved to have bought into this great company at this rock-bottom price. Five days later came ‘Vaccine Monday’ (7 November 2020), when news of effective vaccines sent UK shares soaring — GRG included.

More great results from Greggs

On Tuesday, the Greggs share price closed at 3,192p, up 319p on the day. That’s a leap of a ninth (+11.1%) in a single day, following a smashing trading update from the Geordie firm. Greggs’ sales of sausage rolls, steak bakes, sandwiches, and doughnuts boomed this summer. Like-for-like sales growth in the third quarter was +3.5% on Q3 2019. Also, Greggs opened a net 68 new shops, plus 943 shops now deliver customers’ orders. The group expects to open 100 net new shops in 2021.

On 4 June, with the Greggs share price at 2,573.6p, I said, “If I had Greggs’ current market value of £2.6bn at hand, I would happily buy the entire group as a recovery play”. The Greggs share price has since leapt by almost 620p, a return of almost a quarter (+24.0%) in just four months. I’m very pleased with my call, but I think the future is bright for Greggs and its shareholders.

I’d buy Greggs today

Greggs is a great British growth story, but the group still has new chapters to write. It plans to accelerate shop openings to 150 a year, aiming for at least 3,000 shops by 2026. It will also extend evening trading to more shops, expand online and delivery options, and broaden its food and drink ranges. All this leads to an ambitious target to double turnover over five years to £2.4bn in 2026.

As a working-class lad from the North East myself, I’m proud of Greggs. I don’t own the shares today, but I’d happily buy at the current Greggs share price of 3,192p. Greggs shares are not cheap: they trade on 37.3 times earnings and offer a modest dividend yield of 0.5% a year. But £3.2bn firm Greggs seems to have strong growth baked in, which is why I’d keep buying today. Of course, I could be wrong, especially if Covid-19 makes a comeback and Greggs’ sales slump again. But, for now, it’s “Howay the Greggs” from me!

Our #1 North American Stock For The ‘New-Age Space Race’

Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason…

…because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040.

But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors.

Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation

for now.

That’s why I want to urge you to check out our premium research on this top North American space stock ASAP.

Simply click here to see find out how you can grab your copy today

Cliffdarcy 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

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here’s a FTSE 250 stock to buy to benefit from the construction boom!

Jabran Khan details a FTSE 250 stock that could be primed to benefit from the infrastructure and construction boom.

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Is the Royal Mail share price a buying opportunity?

With a 6% dividend yield and a price-to-earnings ratio of 3, is the Royal Mail share price in buying territory?…

Read more »

Scene depicting the City of London, home of the FTSE 100
Investing Articles

3 FTSE 100 shares! Should I buy them?

I'm searching for the best FTSE 100 stocks to buy following recent market volatility. Are these blue-chip UK shares too…

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Should I buy one of the cheapest shares on the FTSE 100 index?

This Fool explores one of the cheapest stocks on the FTSE 100 index by share price and decides if he…

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

With trading suspended, where could the Eurasia Mining (LON:EUA) share price go next?

This morning, the EUA share price was suspended pending an announcement - so could improving sales send the share price…

Read more »

Hand holding pound notes
Investing Articles

Are the FTSE 100’s top income stocks a bargain?

The FTSE 100 is renowned for its value and dividend stocks. So, are the index's top income stocks worth a…

Read more »

Compass pointing towards 'best price'
Investing Articles

Scottish Mortgage shares have slumped 40%. Time to buy now?

Scottish Mortgage Investment Trust (LON: SMT) shares have rewarded shareholders well in recent years. I'm thinking of buying now they're…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

3 recession stocks I’d buy in a hurry

With the economic outlook getting worse, our writer highlights a trio of recession stocks he would consider buying for his…

Read more »