1 of my best stocks to buy now has dipped! Is now an opportunity to buy shares?

Jabran Khan details one of his best stocks to buy now, which has seen its share price drop. Is this a good opportunity to buy cheaper shares?

| 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.

Lady researching stocks

Image source: Getty Images.

Greggs (LSE:GRG) is one of my best stocks to buy now. In 2022 to date, and after a trading update, the share price has dropped. Could this present an opportunity to buy shares for my portfolio cheaper than usual? Let’s take a look.

Share price drop

I think Greggs is a quality business. It is the largest bakery chain in the UK, with approximately 2,000 locations. Greggs specialises in savoury products such as bakes, sausage rolls, and sandwiches, as well as sweet treats. I must admit I am a long-term customer and admirer of Greggs products.

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!

As I write, shares in Greggs are trading for 2,936p per share. At this time last year, the shares were trading for 1,816p, which is a 61% increase. Greggs has seen its shares soar since the market crash. The shares have actually dipped since the turn of the year, however. At the end of 2021, the shares closed at 3,337p. So what’s happened and why? Do I still rate Greggs as one of my best stocks to buy now?

Trading update and outlook ahead

Greggs released a Q4 trading update last week which made for positive reading overall. It reported that FY 21 sales surpassed 2019 pre-pandemic levels. It also said two-year sales growth for FY21 was 5.3%. An announcement of full-year results would be ahead of expectations. Q4 itself saw a like-for-like growth figure of only 0.8% compared to 2019 and down 3.3% for the full year. From an operational perspective, Greggs has opened 131 new stores and closed 28 stores.

The outlook ahead for Greggs seems positive too. It has a healthy balance sheet with close to £200m in cash and is looking to continue its expansion and growth journey through new stores in new locations.

I believe the Greggs share price has dipped due to ongoing economic pressures as well as the reported lack of like-for-like growth sales reported. The sales figures are nothing to worry about for me personally. I am also not concerned by the share price drop longer term too.

Macroeconomic figures are more of a worry and risk, however. The well documented supply chain crisis, shortage of HGV drivers affecting operations, and rising costs have put many businesses under pressure. Greggs is no different. These are factors that could affect its future progress too.

Still one of my best stocks to buy now

There are challenges ahead for Greggs in the shape of some of the factors mentioned above but I think it can navigate them successfully and continue performing well. It has a good track record of performance. Although past performance is not a guarantee of the future, I use it as a gauge when assessing investment viability. In addition to this, it has a healthy balance sheet should it be faced with stormy waters. Furthermore, it wants to continue to expand and grow which is pleasing to see.

I still think Greggs is a quality business and one of my best stocks to buy now. At current levels the shares look even more attractive to me and I would add shares to my portfolio.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you'll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.

Jabran Khan 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

Social media and digital online concept, woman using smartphone
Investing Articles

Apple stock: Buffett is long, Burry is short. What should I do?

Our author thinks about whether following Warren Buffet into Apple stock might be a good addition to his portfolio –…

Read more »

Close-up of British bank notes
Investing Articles

5 ‘no-brainer’ dividend shares to buy today

Is there an easy way to narrow down the list of FTSE 100 dividend shares? I try one approach, with…

Read more »

Close-up of British bank notes
Investing Articles

£5,000 to invest? 2 dividend-paying penny stocks I’d hold to 2030

I think these high-yielding penny stocks could help cushion the impact of high inflation on my returns. Here's why I'd…

Read more »

Renewable energies concept collage
Investing Articles

2 green stocks that I think are no-brainer buys for the future

Jon Smith explains two of his favourite green stocks at the moment, one for growth and the other for income…

Read more »

An airplane on a runway
Investing Articles

The Rolls-Royce Share price may be set for take-off!

After an upbeat Civil Aerospace Investor Day, here's why I think the Rolls-Royce share price could be set for take-off…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 beaten-down growth stocks to buy as inflation rises

Despite inflationary pressures and recession concerns, I am looking at some top growth stocks to solidify my portfolio over the…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Is the IAG share price too good to miss at current levels?

Jabran Khan delves deeper into the current state of play with the IAG share price and decides if now is…

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

5 of the highest-paying income stocks compared! Which one is best for my portfolio?

Income stocks are certainly in vogue right now amid sky-high inflation. But which of these big dividend payers is the…

Read more »