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Looking to buy FTSE 250 shares for the recovery? I like these two stocks

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The stock market crash has thrown up plenty of opportunities for investors looking to buy FTSE 250 shares. WH Smith Group (LSE: SMWH) is just one that catches the eye.

Last time I looked at the retailer in January, it was flying high due to its booming global travel business. Since Covid-19, the WH Smith share price has crashed by around two thirds, from around 2,500p to today’s 906p. This pushes it deep into bargain territory. While risky, I think it looks a tempting long-term buy-and-hold.

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Today’s half-year results only ran to 29 February, and show little impact from the pandemic. Group revenue rose 7%, but fell 1% on a like-for-like basis. Travel revenue rose 19%, following the takeovers of US retailers InMotion and MRG, or 2% like-for-like. That’s ancient history though.

I’d buy FTSE 250 shares

In April, group total revenue unsurprisingly fell 85%. Travel revenue crashed 91% and high street revenue dropped 74%, despite continuing to trade in 130 hospitals and many post offices. The closure of its airport stores will continue to hurt, until the world starts flying again.

The one bright spot is that online revenues have grown, with book sales up 400% in April. After recent fundraising, its liquidity reserves stand at around £400m, giving it some security.

The crashing WH Smith’s share price may be an opportunity for investors who baulked at its shabby high-street outlets and overlooked its whizzy travel business. Management has the funds to sit out the slump, but the big question now is when does the recovery come?

That’s out of management’s hands of course. The hope is that people will start travelling, as soon as they’re free to do so. Some will be nervous, others will be desperate to get away. Train station outlets should see some pickup, as people edge nervously back to work. When the recovery comes, WH Smith could fly again. This could prove a tempting contrarian buy for brave, long-haul investors. Just remember there’s no dividend right now.

Tasty but pricey

High street baker Greggs (LSE: GRG) is still closed for business, which is bad news for fans of its sausage rolls and Steak Bakes. It had planned to open multiple stores in the first half of this month, but shelved them over fears of crowding.

Greggs is trialling reopenings as customers creep out of lockdown and they’ll be hungry for they’re old favourites.

The Greggs share price has roughly halved since January, although it picked up during the recent stock market rebound. This suggests investors haven’t lost faith. Obviously, the pandemic is a disaster and the after-effects could rumble on. Sales could take a double hit from job losses, as incomes fall and commuter numbers shrink.

I’ve almost stopped looking at P/E values because the crisis has rendered so many meaningless, but I’m worried to see Greggs trading at a pricey 16 times earnings. Those earnings will take time to recover. It’s a long-term buy, but possibly an even braver one.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended WH Smith. 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.