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Why I’d buy this FTSE 100 stock right now

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I’m on the lookout for solid investments within the FTSE 100 for my portfolio and JD Sports (LSE: JD) is a standout stock for me. Up 31% year-to-date, the sports and fashion retailer has trumped the FTSE 100, which is up 10% in the same period. JD has performed strongly since March last year when the pandemic saw markets come crashing down. The FTSE 100 stock is up 180% since. Here, I’m going to explain why I’d add JD Sports to my portfolio today.

Global portfolio

What really stands out to me with JD is its recent acquisitions. Not only do I think its expansion strategy will provide long-term value, but it also seems to be providing the firm with an instant boost. Shoe Palace and DTLR, acquired in December 2020 and March 2021, respectively, generated £72.9m for the firm, according to its half-year results. For me, that’s an attractive factor when considering adding the FTSE 100 stock to my portfolio. Should returns like this continue, I would expect to see a further rise in the share price.

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The £70m injection is only a slither of the impressive half-year results. Revenues were at nearly £3.9bn for the period, over a 50% increase from 2020, while operating profit excluding exceptional items was up by almost 400% at £471.7m. Profit before tax and exceptional items also rose to £170.8m in its core market (the UK and Republic of Ireland), a 225% increase from 2020 and 48% from 2019. For a potential investor like myself, these are appealing figures.

What also attracts me is the size of its portfolio. Globally, it has over 3,300 stores in 29 territories under its umbrella. This opens up an array of opportunities. And as the business continues to expand, I think shareholders will begin to see greater benefits. Yet this large exposure can also be a risk as we have seen so evidently with the pandemic over the past 18 months as sores were forced to close.

JD concerns

What does concern me, and as my fellow Fool Royston Roche highlighted, is suppliers/competitors such as Nike and Adidas. The fact they’re selling directly to customers may allow them to benefit from better margins, although JD does have exceptionally good relationships with both of these brands. Also, direct rival Sports Direct (owned by Frasers Group) is expanding and elevating its offer, and boss Mike Ashley may now be more determined to do so after the recent sale of Newcastle United. The firm’s plan to expand into Europe could damage JD’s market share. This is a major issue for me as it could negatively impact the JD share price.

Why I would buy

Although I’ve raised concerns, I do have a bullish outlook on JD. The latest set of results provided will no doubt give shareholders a confidence boost, but what most impresses me is the return from its two latest acquisitions. With such a large portfolio, I think the business could see real benefits from its global presence. As such, I would add JD to my portfolio today.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Nike. 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.

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