The Motley Fool

A FTSE 100 growth stock I’d add to my Stocks and Shares ISA today

Yesterday, FTSE 100 company Just Eat Takeaway.com (LSE:JET) confirmed via news release that it is set to combine with America’s Grubhub. Just Eat will obtain 100% of the shares in the U.S. company in a $7.3bn deal. This will create a leading global online food delivery service. Prior to this announcement, Grubhub was in talks with global taxi group Uber, but antitrust concerns caused this potential partnership plan to dissolve.

Meals on wheels

Just Eat Takeaway is a European meal delivery service founded in Amsterdam. Originally two separate companies, it has been a constituent of the FTSE 100 Index since Takeaway.com acquired Just Eat for $7.8bn in February this year. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

The merger between Just Eat Takeaway and Grubhub will strengthen its existing position and extend its reach throughout North America. It will also create the world’s largest online food delivery company outside of China. The combined group will serve customers in 25 countries.

Share price volatility

The all-stock deal values Grubhub at $75 a share. Earlier this month Just Eat Takeaway saw a share price high reach over £90, whereas today it is around £77. The Just Eat share price is up 2% as I type, but that is after a 13% fall on the news. There is no doubt this is a volatile time for share prices, and with the restaurant industry hard hit by the coronavirus pandemic this volatility is likely to continue for some time.

In 2019 Just Eat processed around 593m orders and had a global customer base of over 70m. The company’s order book doubled in the first quarter of 2020. But cyber-attacks affected its orders in March, as did restaurants closing when the UK lockdown began. Overall, the business continues to show resilience as online orders prevail. The company share price is up 38.5% in three months, despite its recent decline, and it has a market cap of £4.6bn. 

Embracing technology

Just Eat has heavily invested in improving its delivery network and technology capabilities to make it a market leader. This has reduced its ability to create a profit, and earnings per share are negative. Analysts believe it should be profitable by the end of the year. As such, I believe it is a FTSE 100 stock with growth potential.

All together I see this as an exciting merger in an area that looks likely to remain in demand. As lockdown is eased and families and friends are gradually allowed to see each other again, takeaways could be a splendid way to enjoy time together. Equally, takeaways may become the favoured and cheaper alternative to dining out. Restaurants and cafes have already opened their doors to home delivery in an effort to drum up business in lockdown. I think the Just Eat Takeaway share price is a good addition to your Stocks and Shares ISA.

If you like to invest in stocks with growth potential, let us help you discover more ways to boost your wealth...

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has recommended Just Eat Takeaway.com N.V. 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.