GSK (LSE: GSK) shares have become popular recently, rising over 16% in 2026 so far (and 59% in the last 12 months). Not only is this a far better return than the FTSE 100 as a whole, it also represents a shift in sentiment for a company that’s arguably been unloved for a over a decade.

But what’s behind this momentum? And is there more to come?

What’s going on with GSK shares?

I don’t think GSK’s purple patch of form is down to one thing. But let’s begin with good, old-fashioned earnings.

Full-year results for 2025 beat expectations. Revenue increased 7% to £32.7bn, helped by a 17% rise at its Speciality Medicines division (HIV, Oncology and Respiratory/Immunology). Core operating profit hit £9.8bn — an 11% uplift on the previous year.

Having been in top-tier peer AstraZeneca‘s shadow for so long, GSK’s pipeline is now starting to look more promising as well. No less than 13 new cancer drugs are currently in development, for example.

One could also argue that the market has now adjusted to the Brentford-based business’s decision spin off its consumer arm (Haleon) a few years ago and become a pure-play biopharma company. This implies a more growth-focused strategy — something that should appeal to a new audience of investors.

Still cheap

Despite it doing so well already, there are a few reasons for thinking the party might continue.

Q1 numbers are due on 29 April. Unless there are any nasties lurking, I don’t see why this stock can’t carry on rising in value. A positive sign has been the spate of director buying seen last month. We’re not talking small change either. If those who know the company best are willing to put their own money to work, I take that as very encouraging.

Second, the valuation remains reasonable. A price-to-earnings (P/E) ratio of 12 is still cheap relative to other companies in the healthcare sector. GSK also boasts above-average operating margins and returns on capital (essentially, what it gets back for the money it puts in the business), at least relative to other UK stocks.

The stock yields 3.4% too. Sure, it would be a mistake for investors to assume that any dividends are guaranteed. But GSK’s cash distributions look like they will easily be covered by expected profit. This assumes, of course, that analyst projections are on the money.

This is not to say that the £86bn cap is devoid of risk. An ongoing problem for pharmaceutical firms is that the patents on some of their drugs are set to expire. This includes GSK. On top of this, some/all of those aforementioned new drugs in development might fail.

Great option

As I type, GSK shares are the most popular buy this week on AJ Bell‘s investment platform. Given how fickle investors can be, I don’t put much weight on this. Next week, there’ll be another ‘top of the stocks’. What’s more important from a Foolish perspective is whether this is a solid pick for the long term.

In my opinion, this is the case. While some of the recent momentum may be down to the valuation simply catching up with events, this remains a great defensive option to consider buying for uncertain times.

And I’d say that’s where we are right now.

The post Why is everyone buying GSK shares? appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Aj Bell Plc, AstraZeneca Plc, GSK, and Haleon Plc. 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.

When looking at some of the biggest main market losers in 2026 so far, easyJet (LSE: EZJ) shares undoubtedly stand out. But could now actually be a wonderful chance to pick up a slice of the budget airline?

Worse than expected

You don’t need to be Warren Buffet to understand why the Luton-based business is finding things so tough. The US-Iran conflict has pushed fuel prices skyward. Given that easyJet will have been gearing itself for the busiest time of its financial year, the timing couldn’t have been worse.

Based on the reaction, yesterday’s trading update was even more dire than the market had been expecting. CEO Kenton Jarvis and his team anticipate reporting a pre-tax loss of £540m-£560m for the first half of the financial year.

No wonder shares have now fallen almost 28% in 2026 alone.

This dramatic fall might be slightly easier for existing investors to take if other aviation stocks were suffering to a similar extent. But this isn’t the case. British Airways owner IAG, for example, is down ‘only’ 8% from where it stood at the beginning of 2026.

In sharp contrast, a stake of £10,000 invested in easyJet as markets opened up in January would now be worth roughly £7,200. There was 13.2p per share dividend paid at the end of March but that’s hardly likely to soothe the pain.

Reasons to consider easyJet shares today

As tough as the last few months have been, there’s an argument that new investors would be getting a great deal today.

A price-to-earnings (P/E) ratio of seven is certainly low (albeit IAG is still slightly cheaper). It suggests a lot of bad news is already priced in. With net cash of £434 million at the end of March, the balance sheet doesn’t look stressed either.

The company’s clearly popular with flyers too. The load factor in the first half rose to 90% and customer numbers for easyJet holidays climbed 22%. It also saw it’s “busiest Easter holiday period ever”.

Based on all this, I think the income stream looks safe. But the question is whether these things are enough to convince investors that this isn’t a value trap disguised as a beautiful bargain.

Feeling lucky?

I’m not sure it is. The way ‘negotiations’ are proceeding between the US and Iran, easyJet shares might continue to lose height in the weeks ahead. Indeed, the fact that the company’s currently receiving considerable interest from short sellers isn’t the best sign.

One thing I’m keeping in mind however, is that this isn’t anything to do with the company per se. So if there is a resolution of sorts, I think it’s perfectly possible that easyJet could recover. We know its shown itself able to navigate its way through tough times before, including the monumental shock to the system that was Covid-19.

But this feels like a binary bet, at least for now. And that doesn’t strike me as the sort of ‘investing’ I want to get involved in. As a Fool, I’m looking to grow my wealth steadily over the long term rather than take on extra risk.

I reckon there are far better opportunities for me to make money elsewhere.

The post £10,000 invested in easyJet shares at the start of 2026 is now worth… appeared first on The Motley Fool UK.

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Paul Summers 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.

It’s tempting to assume that income investors should always prioritise buying FTSE stocks with massive yields. However, there are times when shooting for a smaller payout could make more sense. An example would be if the company has shown great form when it comes growing dividends over many years.

Boring but brilliant

International distribution and services specialist Bunzl (LSE: BNZL) is one candidate to consider. The items it handles — think food packaging and cleaning supplies — won’t set the pulse racing. But it’s partly because these things are essential that management has been able to keep raising the dividend year after year.

That said, existing investors will be wanting to forget 2025. Weaker demand in its biggest market (North America) pushed many to the exits. By the end of December, the share price had fallen by 40% or so.

But if there’s one good thing to come from all this, it’s that Bunzl shares are currently cheaper than usual. A price-to-earnings (P/E) ratio of 13 is significantly below the firm’s five-year average P/E of 19. And those dividends? Unless trading falls through the floor, the 3.4% income looks safe for now.

This stock probably won’t recover in value quickly, especially if cost inflation keeps shrinking margins.

However, as a more-reliable-than-most source of passive income, I think it takes some beating.

Steady income

Getting exposure to a utility stock or two is also worth pondering. Yes, we know that cash distributions by any company can never be guaranteed. But the beauty of firms in this part of the market is that their business models are stable and earnings are relatively predictable.

This is why my second pick is water firm United Utilities (LSE: UU).

Like Bunzl, United has been raising its dividend for multiple years. We’re not talking explosive growth — an average of 4% every year, in line with inflation. But I reckon most income investors would prefer consistency over the former.

Right now, the forecast dividend yield for FY27 stands at 4.1%. That’s solid if not exactly flashy. It’s also more than someone would get from owning a FTSE 100 tracker. In direct contrast to Bunzl, United’s share price has also been rising very nicely in recent times (+24% in the last year).

Risks here include the tight leash of the regulator and high debt due to huge capital expenditure requirements. But these are par for the course in this space.

FTSE dividend growth star

A final example of a company with a great track record for raising dividends is wealth manager Rathbones (LSE: RAT).

Supported by high margins and the fairly recent merger with the UK arm of Investec, the growth rate here averages out at around 6%–7% per year. What’s more, analyst projections have it yielding 5.1% this year.

However, Rathbones isn’t a nailed-on winner. A market crash could see clients pulling their money out, leading to a reduction in fees and eventual profit. That could slow future dividend growth and might even lead to a cut. Even in good times, the £2.3bn cap operates in a competitive industry.

But that is precisely why I’ve made sure that all three mentioned here work in different sectors. In theory, spreading money around the market in this way makes it less likely that the income stream will ever dry up completely.

The post 3 FTSE shares with many years of consecutive dividend growth appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Bunzl Plc and Rathbones Group Plc. 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.

As recovery stories go, FTSE 100 star Rolls-Royce (LSE: RR.) has been incredible.

There was a time — not long after the beginning of the global pandemic — when no one would go near the company. Back then, this felt logical. In addition to drowning in debt, the engineer’s outlook was ominous considering air travel had pretty much ceased in an effort to contain Covid-19.

Of course, hindsight is a wonderful thing. We now know that this was precisely the time to load up on the shares. In a few years, CEO Tufan Erginbilgiç has managed to turn the company around through a combination of cost-cutting and streamlining. The share price has duly responded. And then some!

The question I’ve been asking is what will be the next brilliant turnaround stock in the UK market’s top tier?

FTSE 100 laggard

One potential candidate could be automotive marketplace provider Auto Trader (LSE: AUTO).

Yes, it’s true that this is a completely different entity to Rolls-Royce in many respects. Rolls-Royce earns its money from making engines and maintaining them and has a global reach. Auto Trader links UK buyers with sellers of vehicles and does it all online.

However, the latter is currently hated by the market, just as Rolls-Royce was back in 2020. Indeed, it features high up the list of most shorted shares among traders. In other words, many are betting its price — down nearly 40% in 12 months — has even further to fall.

They could well be right. In recent times, more and more investors have begun to question whether businesses such as this can withstand the onslaught of AI.

Elsewhere, the company has faced backlash from dealerships for new initiatives. Even the British competition regulator is now investigating Auto Trader as part of a crackdown on fake reviews.

It never rains but it pours.

Auto Trader isn’t broken

On a more optimistic note, I think there’s quite a lot to like here.

The £4bn cap still has a virtual monopoly in what it does. It still posts incredible margins that would turn most firms green with envy. Levels of debt are current negligible too thanks to its asset-light business model.

Then there’s the valuation. A forecast price-to-earnings (P/E) ratio of 14 practically screams ‘bargain’ if – and that’s a sizeable ‘if’ — relationships with dealerships can be repaired and the aforementioned AI threat proves overblown (it’s worth noting that the company is already integrating its own AI-infused tools into the site).

Worth a closer look

Notwithstanding this, I’m definitely not expecting a recovery like that of Rolls-Royce (if it comes). The latter’s revival has been epic, supported by a recovery in aviation and a boom in defence spending. It’s hard to see how Auto Trader could ever achieve the same levels of revenue growth.

Even so, I do think it might warrant attention from contrarian-minded long-term investors, particularly with the share price languishing where it is. With expectations so low, any chinks of light in the next set of full-year numbers — due 21 May — could be the catalyst value hunters have been waiting for.

But I would like to see some director buying before too long. Damningly, there’s been none of this for many years (and an awful lot of selling!).

The post Could this cheap FTSE 100 stock be the next Rolls-Royce? appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Autotrader Group Plc and Rolls-Royce Plc. 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.

When I first started investing many years ago, BAE Systems (LSE: BA.) shares were regarded as a fairly pedestrian holding. People tended to own them for the dividends and not much more. Capital growth wasn’t particularly easy to come by.

Fast-forward to 2026, however, and that perspective has completely changed. Even someone buying into BAE at the start of the year would still have done marvellously well in such a short period of time.

Top performer

As I type, the share price is up 26% since markets opened in January. For comparison, the FTSE 100 index in which BAE features is up around 6%. The tech-stuffed S&P 500 is barely in the black.

Put another way, a £10,000 investment would now be worth £12,600. I don’t know about you but I’d say that’s a pretty spectacular return. It’s also more evidence that your average retail investor — with a bit of luck and skill — can outperform the market without needing to back some obscure AI-related penny stock.

As things stand, there’s just one problem I have with all this: the current valuation. Based on analysts’ forecasts, the stock now changes hands for 27 times earnings. Back in the day, the price-to-earnings (P/E) ratio was below 10!

Another thing worth noting is the substantial director sells in March and April, including a multi-million pound dumping of stock by Chief Financial Officer Bradley Greve. This isn’t necessarily a cause for panic among owners. But it does imply that these very informed people were keen to take some profit off the table.

Strong outlook for BAE shares

Then again, there is still lots to like about BAE shares from my perspective.

In the short term, it doesn’t look like the US-Iran war is likely to end anytime soon. Even if it does, the unpredictability of President Trump will surely keep markets on tenterhooks for the remainder of his term. Remember — he’s not due to officially leave office until January 2029.

Looking further ahead, the geopolitical shenanigans of the last few years, combined with the Russian invasion of Ukraine, have sent shivers up the spines of governments around the world. As a result, defence spending has increased. On a human level, I’m not sure that’s comforting. From an investment perspective, it suggests owners of BAE Systems won’t need to worry about a significant dip in trading.

On top of this, the aforementioned dividends remain attractive. While the yield stands at just 1.8% because of the incredible momentum seen in the share price, this cash distribution looks set to be easily covered by expected profit. The company also has a brilliant multi-decade track record of raising the total payout every year. Usual warnings aside, I expect BAE to maintain its status as a more-reliable-than-most source of passive income going forward.

So, in many ways, that valuation does make sense.

More gains ahead?

All told, I tip my Foolish hat to anyone who snapped up this stock recently. Even though further capital growth may be increasingly harder to achieve, I certainly don’t think those committed to holding for the long term would be making a catastrophic error.

BAE Systems is in a purple patch, no doubt. But this example shows that positive momentum in the stock market can last a lot longer than one might expect.

The post £10,000 invested in BAE shares at the beginning of 2026 is now worth… appeared first on The Motley Fool UK.

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The Motley Fool UK has recommended BAE Systems. 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.

With a fresh ISA allowance to play with, I’m on the hunt for quality dividend stocks. While the passive income they throw off can never be guaranteed, I love the idea of generating a bit of extra cash for simply owning slices of individual companies. And the beauty of holding my shares in this account is that it all comes free of tax.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Market darling

Tobacco giant Imperial Brands (LSE: IMB) is one stock I’ve got my eye on.

Sure, this business won’t be to all investors’ tastes, in much the same way that people might not want to back defence contractors or gambling firms. However, there can be no doubt that it’s performed marvellously for those willing to own a slice of it for the long term.

Anyone buying this stock five years ago would have pretty much doubled their money. Despite a stunning 2025, the FTSE 100 index in which the £24bn cap features is up ‘just’ 50% in the same period. Again, we have another example of how — with a bit of skill and luck — a regular, private investor can absolutely thrash the market return. Moreover, they don’t necessarily need to get involved in the murky world of penny shares to do so.

Dependable dividend stock

Imperial’s outperformance since the global pandemic has been down to a few factors. These include a successfully-executed turnaround strategy, consistent revenue growth, and the growing popularity of next-generation products including vapes, heated tobacco, and nicotine pouches.

But it’s not just these things that have attracted new investors. Put simply, it’s also been (and remains) a stellar source of income.

Right now, analysts have the company down to return 168p per share to investors in FY26. Using the current share price, that equates to a dividend yield of 5.5%. Again, this puts the index to shame. A FTSE 100 tracker offers around 3%.

An above-average yield can sometimes be the result of a company’s share price tanking, perhaps due to concerns on its outlook. However, we know that’s not the case here. In fact, it’s estimated that Imperial’s distributions will be covered twice by profit this year. Unless we get some news flow that truly shakes market confidence, I reckon investors will get their money.

All this, when combined with a forecast price-to-earnings (P/E) ratio of nine, suggests new owners will be getting quite a lot of bang for their buck. Imperial is also cheaper than its top-tier peer British American Tobacco (P/E of 12).

Just the start of my search

Of course, depending on just one company for passive income is still courting disaster. However reliable it has been in the past, Imperial could run out of puff going forward. I’m wary that traditional tobacco consumption is still falling. There’s no guarantee that its new products will be able to make up for this lost revenue in the long term. Even if they do, a business like this will always be a target for regulators.

With this in mind, I’m going to continue adding companies to my shortlist. With markets looking fragile as the US and Iran attempt to agree on a peace deal that will actually last, now could be a great opportunity to go bargain hunting.

The post 1 mighty FTSE dividend stock I’m considering for my ISA appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. and Imperial Brands Plc. 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.

When it comes to creating a passive income stream for retirement, a Stocks and Shares ISA is an excellent tool. After all, any profits made or dividends received in this sort of account are free from tax. That could make a huge difference when it’s time to ditch the office for good.

But how much would someone need to accumulate to aim for £1,500 every month (£18,000 a year) using the 4% ‘safe withdrawal’ rule?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Realistic goal

The answer to that question is £450,000. I know, that’s a huge number. But I reckon it’s achievable for someone willing to put their money to work in the stock market as early as possible and compound the value of what they own over time. Put £400 aside every month and — assuming an average annual return of 7% — our investor will have that massive pension pot in 30 years.

Now, I won’t shy away from the fact that this will all require a healthy dollop of discipline. But that’s always been the Foolish way. We invest for the long term. Think decades, not weeks, months or a year.

Then again, there’s no rule to say that an investor can’t target a higher average return and attempt to speed things up. To do this, they’ll need to take on more risk by owning a portfolio of individual company stocks. There’s no magic number but between 10 and 20 should give a good amount of diversification. This is important because there’s always a chance that a few in that group might seriously underperform.

Strong candidate

A company like Rio Tinto (LSE: RIO) could arguably make the cut. It’s one of the biggest miners around, digging up metals such as aluminium, lithium and copper from around the world. It’s also been pretty great source of dividends over time. Right now, the yield stands at 4.7% for the current financial year. That’s more than an investor would get from holding a FTSE 100 tracker fund (3%).

This is not to say that Rio is all about income. Far from it. The stock’s up almost 70% in the last 12 months off the back of strong earnings reports and rising commodity prices.

No sure thing

I rate Rio highly as a ‘buy and hold’ contender. But it’s far from a safe bet. Of course, no stock truly is. But the £120bn-cap makes its money from markets that are notoriously volatile. It has absolutely no say on the value of what it digs up. On top of this, mining is dangerous and unpredictable work.

For proof of just how tricky things can get, take a look at the behaviour of the share price in 2026 alone. At the beginning of the year, this stood at 6,000p, rising to almost 7,500p by the end of February. By mid-March, that gain was almost entirely wiped out as the USA-Iran war kicked off. It’s since recovered strongly.

Even so, the likely surge in demand for metals like copper over the next few decades as the world increasingly adopts clean energy, electric cars and other technologies suggests investors should at least consider having some exposure to companies like this.

Seen through this lens, any temporary drop might regarded as an opportunity to think about buying at a more attractive price.

The post How much does an investor need in an ISA to target £1,500 in monthly passive income? appeared first on The Motley Fool UK.

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Paul Summers 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.

Last year was undoubtedly one that owners of Diageo (LSE: DGE) shares will want to forget. But things haven’t exactly improved in 2026. Quite the opposite.

As I type, the price has fallen a little over 10% since the beginning of the year. And that’s after taking into account the relief rally we’ve seen since a ceasefire between the US and Iran was announced.

With a bog-standard FTSE 100 tracker up almost 7%, I don’t blame existing owners of the battered brewer from feeling rather hard done by.

Why Diageo shares remain unpopular

I think there could be a few reasons for this ongoing negative momentum.

First, there’s the fact that new CEO Dave Lewis is still settling in. Four months is simply not long enough to turn a juggernaut like Diageo around. Yes, a stock can sometimes ‘bounce’ on the belief that a new dawn is coming but this is usually temporary if nothing has changed to the business plan. And so far, nothing really has. February’s interim numbers were even worse than expected.

One thing that Lewis has done, however, is cut the dividend. To be fair, this was always on the cards. When the chips are down, those distributions are often the first to go. But it’s definitely not something investors would have cheered.

On top of this, the more long-term concerns remain. The popularity of weight-loss drugs shows no signs of slowing down. The growing obsession with fitness among younger generations – while no bad thing in itself – also means that many are spurning alcohol in favour of gym memberships.

The prospect of a rise in inflation as a result of the conflict in the Middle East was never going to improve sentiment either, especially as the company already has a hefty amount of debt on its books.

Better times ahead?

Taking the above into account, it’s reasonable to think Diageo shares will continue falling from here. But I’m also not convinced it’s nailed on.

By far the most compelling reason to at least consider investing today is the valuation. A price-to-earnings (P/E) ratio of 12 for the current financial year (ending in June) is already seriously low, especially for a company with a bumper portfolio of brands and global reach.

When expectations are on the floor, it’s remarkable how even the slightest bit of good news can bring out the buyers. Perhaps this might come mid-May when the firm is down to release its next statement on trading. Regardless, the forthcoming World Cup surely won’t be bad for business, especially if the weather behaves.

Get your wallet out, Dave!

Notwithstanding this, I would like to see a bit of director buying. To me, there’s nothing more encouraging than seeing those who know the company better than anyone else backing it with their own cash. So far into the new leader’s tenure, there’s been very little.

There is, of course, no guarantee that any company will recapture its former glory. This is why spreading money around the market is so important. But it’s telling that Tesco‘s share price also continued falling when Lewis took over in 2014 before stabilising and then rising.

I still reckon we could see the same thing happen with Diageo shares.

The post Why is everyone still selling Diageo shares? appeared first on The Motley Fool UK.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo Plc. 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.

A couple of years ago, investors couldn’t get enough of Greggs‘ (LSE: GRG) shares. Since then, it’s been the complete opposite. After initially tumbling in value as a result of slowing growth, the stock has continued to slip in price in 2026 so far.

Why isn’t anyone interested in buying this one-time stock market star?

Perfect storm

I don’t think the reasons are particularly deep. The FTSE 250 member’s plight is because people aren’t seeing much in the way of upside, at least in the near term.

For a humble sausage roll seller, Greggs finds itself in a pickle. The cost-of-living crisis has pushed consumers to cut back on spending, even when it comes to relatively small treats. Increased costs – such a higher National Insurance Contributions (NICs) — have played a role too. Greggs has also arguably been impacted by the surge in popularity of weight loss drugs and the ongoing fitness/health trends in younger people.

In my opinion, none of the above show any sign of going away anytime soon. Even the weather could make things difficult for Greggs going forward. Who wants to munch down on a boiling hot pasty if we have a long, hot summer?

Taking all this into account, it’s not surprising that short-sellers are showing interest in Greggs. As I type, it’s the third most ‘popular’ UK stock among those trying to make money by betting a company’s share price has further to fall. Since these people tend to be very well informed, that isn’t exactly an encouraging sign for any prospective retail investor.

Greggs’ shares: a bargain in plain sight?

Of course, short sellers can be wrong. If Greggs were to surprise the market in some way, the price could conceivably rocket as these traders rush to close their positions. Even just an indication that sales growth was stabilising might be enough.

A nice bit of director buying might have a similar effect. The valuation is certainly far from demanding right now. A price-to-earnings (P/E) ratio of 13 is significantly lower than the five-year average of 23 for this stock.

Sure, we need to be careful of placing too much weight on a single metric. But this does at least suggest that a lot of fear is already baked in. And short-term fear is just what long-term Foolish investors like me should want!

It’s also worth remembering that this company isn’t being singled out by consumers. Currently, just about every retailer with a high street presence is struggling to meet higher costs and keep the tills ringing.

Inflation’s back on the menu

Greggs has been on my watchlist ever since I sold my entire position around September 2024. I see no reason to change that. In my mind, this is still a great business trying to navigate its way through choppy waters. It’s also planning for the future by investing in new facilities and opening new stores.

Even so, I wouldn’t be surprised if the next few months prove to be difficult for CEO Roisin Currie and Co as the full economic impact of President Trump’s war with Iran becomes apparent. And this is based on the ceasefire lasting.

The next trading update on May 12 — and particularly the outlook statement — will be an absolute must-read.

The post Why aren’t people buying Greggs shares by the bucketload? appeared first on The Motley Fool UK.

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• £5,000 invested in Greggs shares in October 2024 is now worth…
• At 12.9x, are Greggs shares cheap enough yet?
• 5 years ago, £5,000 bought 218 Greggs shares. How many would it buy now?
• Buying £20k of Greggs shares could give me an £860 income this year!
• 3 risks to Greggs shares that could hamper a recovery

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Greggs Plc. 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.

While the FTSE 100 has been relatively steady in these uncertain times, some of its members can’t stop falling in value. This group includes businesses that still dominate their respective industries and boast some of the best fundamentals around.

As a long-term Fool, this gets me salivating. To quote stock market legend Warren Buffett, what could be better than ‘buying quality merchandise when it’s marked down’?

Fallen star

One top-tier company that’s caught my eye more than any other is property portal Rightmove (LSE: RMV).

As you probably already know, the £3.3bn cap has a virtual monopoly when it comes to connecting estate agents, developers, and landlords with buyers and renters in the UK. For years, this has allowed it to post incredible margins of around 70%.

But recent share price performance has been woeful. As I type, the company has lost a third of its value in the last 12 months.

To be clear, Rightmove’s business model hasn’t suddenly broken. It’s still doing what it’s always done.

However, there have been developments – both within and outside of its control – that have caused serious concerns among investors.

What’s gone so wrong?

Perhaps the most prominent of the former has been management’s decision to invest heavily in AI. This caused the share price to plummet when the announcement was made last November.

It’s not just that investors didn’t like the idea of profit being lower for a while; it’s the possibility that this move might not work and that Rightmove will eventually lose its crown to a competitor. And the market doesn’t like that sort of uncertainty.

Recent events have only added to owners’ pain. At the start of April, the company was named in a £1.5bn lawsuit after estate agents claimed it had been charging excessive subscription fees. The news sent the shares to a six-year low.

Now throw in the prospect of interest rates staying higher for longer as a result of President Trump’s war in Iran. Given the impact this might have on an already-flagging property market, I think Rightmove’s plight makes some sense.

Time to make a move?

Then again, one could argue that an awful lot of negativity is priced in. After all, the forecast price-to-earnings (P/E) ratio of just 14 is already significantly below Rightmove’s five-year average of 28.

Although not a favourite among those looking to generate passive income, the dividend yield now stands at 2.6% too. Those cash distributions look set to be easily covered by expected profit. So, a cut seems unlikely as things stand.

There’s also been some director buying. According to records, four different directors snapped up stock in February and March. Prior to this, the last recorded buy by anyone on the board was in June 2023! This shouldn’t taken as a guarantee that Rightmove is about to stage an almighty recovery. Even so, I do like to see those who know the company best putting their own money to work.

Whether these arguments indicate that Rightmove is the best value proposition in the FTSE 100 right now is, of course, open to debate.

But I do think this is one stock that’s worth a closer look.

The post Is this household name now the FTSE 100’s best bargain stock? appeared first on The Motley Fool UK.

More reading

• I sense a potential opportunity if the FTSE 100 loses this quality growth stock…
• Why building a million-pound SIPP gets easier after £100k
• This FTSE 100 stock has fallen 50% and directors are loading up on shares
• £20,000 invested in a Stocks and Shares ISA 5 years ago could now be worth…
• A once-in-a-lifetime chance to buy a top FTSE 100 stock at a bargain price?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove Plc. 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.