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I believe this FTSE 100 pick is one of the best stocks to buy now!

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Many FTSE 100 stocks are on my personal best stocks to buy now list. JD Sports (LSE:JD) is high on that list. Here’s why I’m thinking about adding it to my portfolio now.

FTSE 100 growth phenomenon

In 2019, JD Sports was promoted to the FTSE 100. Its journey started as a sole store which opened in 1981 in Bury, Greater Manchester. As I write, it has over 3,300 stores across the world and a group of companies with an envious portfolio. This includes fashion, sports and outdoor and its recent foray into the gym market.

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In approximately seven years, the JD Sports share price has increased over 1,000%! More recently, the JD Sports share price is up over 50% compared to this time last year. As I write, shares are trading for 924p per share. It is also up 8% in 2021 to date. Its share price rise is not the only reason I class it as one of my best stocks to buy now though.

The best stocks to buy now perform consistently

JD Sports has a track record of success, profitability, and acquisitions. I know past performance is not an indicator of future performance but it can be a good gauge to learn about a business in my opinion. In addition to that, I am buoyed when I hear a business is swallowing up its competitors and incorporating their offering.

JD Sports has been recording increasing revenue for the past four years consistently. It has also reported an increase in gross profit for the same period of time as well cash flow.

Despite the obvious effects of Covid-19 on JD Sports’ physical presence on the high street, it is confident it can bounce back. Earnings took a hit due to restrictions, from stores being closed, but JD has an excellent online presence.

For the year ended 1 February 2020, pre-tax profit totalled £349m. In its latest trading update, JD confirmed it is on track to deliver pre-tax profit of approximately £550m. I think this forecast by JD Sports is wholly achievable if restrictions don’t come back into force and pent-up demand continues.

Risk and reward

There are risks involved with all FTSE 100 stocks. JD is no different, despite its impressive story to date. Currently, it is trading at all-time highs with a price-to-earnings ratio of close to 40. This could be considered expensive and any negative news could result in a sharp share price fall.

Furthermore, JD possesses a good online presence but its physical stores perform well and can be considered its bread and butter. If further restrictions were to come into force due to a rise in Covid-19 cases, this could affect its bottom line once more.

Despite these risks, JD Sports is very much one of the best stocks to buy now in my opinion. Even though it is trading at all-time highs I am tempted to buy for my portfolio. If its share price were to dip a bit, I would snap up shares as quickly as possible, as I believe JD’s growth and success will continue.

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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.

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