My Reasoning To Soon Be Purchasing Greggs Shares (£GRG)


(Scott) #1

Hi All,
I was one of the many, that over the last few months was championing the addition of having Greggs shares on the app.

A few of the reasons that I was hoping Greggs would be added are that the business has over the last few years moved away from the simple grab & go shop to more of an artisan-feel business with a whole new look to the retail shops, new dine-in seating available in most shops if not all.

Greggs has also recently opened up a drive-thru based in Irlam (Manchester) which has been a hit with customers as it is convenient and quicker, the business has plans to increase the number of drive-thru’s in the coming years, they also are opening new shops in high footfall locations whilst closing the underperforming shops at the same time to ultimately reopen them elsewhere, all information is readily available online.

The production sites are going through an expansion phase, with millions being spent on upgrading production at the sites, granted this expense may damage the profit for the year but for me personally over the next few years profits should increase over time once expansion has been completed in early 2019, all information is readily available online.

  • FromNewbieToPro

(Vladislav Kozub) #2

Great post! What a shame I could not add Greggs to my Freetrade Watchlist and keep track of its progress :sweat_smile:


#3

I’d buy Greggs because I’m a big fan, and buying a share in them is better for my belly than 10 sausage rolls which would be the equivalent price. Shame their international shops didn’t go well.

Interesting comparison in the FT yesterday - Greggs has a profit margin of 8% and Costa’s is 12% while Patisserie Valerie were reporting 18% prior to their ‘issues’.


(Aris David) #4

:smiley:


(Ryan) #5

Interesting analysis, @FromNewbieToPro!
I have never realised Greggs had a drive through store in Manchester :astonished:

From quickly looking at their numbers, Equity, Revenue are steadily increasing. Cash Flow from Operating Activities seem stable.
From a technical analysis viewpoint, the 50 MA has crossed the 150 MA, signalling an uptrend.

I would have to do some more research before buying though. But, what makes you think they would be able to survive a recession or the next recession? Do you think that sales would fall due to people cutting back on spending?
My other question would be, how will Brexit affect Greggs?

I am a big fan of Greggs myself and your post has definitely made me think!


#6

I bought yesterday. Happy days!


#7

Can someone point novices at something that explains technical analysis simply?


#8

Greggs was one of the first shares I bought on Freetrade. It’s up 26% for me as of this morning. But it wasn’t a measured buy. I just like the brand and thought it can continue doing well.

I like to think places like Greggs - low cost eating places - don’t suffer the worst during bad times. If you cut back spending you’re more likely to identify a restaurant meal as an overspend than a few £1 sausage rolls. Even compared to other fast food places they’re very competitive. Compare sandwich and coffee prices with Pret for example.

Surprisingly for a bakery chain it’s done well over the years to keep it at front of mind with the public. The pasty tax, Jesus modelled by a sausage roll, the vegan sausage roll have been good for them.

When I moved to London there were very few Greggs. Now on Cheapside and Lower Marsh there are queues out the door every lunch time.


(Ryan) #9

The problem with technical analysis is that there are so many indicators to look at. And usually, some are saying buy and some are not.

Ultimately, if you do some reading you may be able to find the indicators that most resonate with you.

  • Phil Town in Rule #1 talks about looking at MACD, MA and Stochastics.
  • Stan Weinstein in Secrets to Profiting in Bear and Bull Markets looks at the stock moving above a 30 day MA, and wants to see higher volume on the breakout above the 30 day MA.

I am still learning about technical analysis. I do not want to be a day-trader, but am learning to try to optimise my buy/entry points into stocks! One very important thing to know though, is that markets follow a trend, and generally speaking you don’t want to buy when theres a downtrend, as it could do lower.
Adam Khoo talks a lot about this, and uses a crossing - when the 50 day MA crosses above the 150 day MA, then we are back into an uptrend, the stock is bullish again, and that could be a good entry point!

I think the key is doing some reading/research and see which indicators make the most sense to you. There are some indicators which, may be helpful, seem very hard to understand for me personally, so I choose not to learn them, and try and stick to ones I can understand.

I would say try and watch some youtube videos, and try and make sense of some TA indicators. Adam Khoo is a good shout, who mixes fundamentals with technical analysis.


(Simran Cashyap) #10

I know some investors who swear by technical analysis, although I personally don’t use it. I think the best uses I’ve seen were using it as an initial screener or to try and time once a decision has been made.

It always makes me think of this though :smile:

B0kaVWnCYAAAZ2c


#11

Interesting thanks - I will take a look.

I must admit that I’ve always been a fan of the idea that markets are completely unpredictable (or certainly to m me and the average retail investor), and so I’ve always suspected that technical analysis is a bit… unscientific. I will read a bit.


(Aris David) #12

Quantitative Analysis and TA - to profile the share price

  • expected range,
  • expected volatility,
  • trend,
  • is volume higher when the price is up (sign of Institutions buying)?
  • is the volume higher when the price is down (sign of Institutions dumping)?

Qualitative Analysis and Fundamentals - to profile the company fundamentals (e.g. Greggs no long term debt was a big plus)


(Ryan) #13

Ultimately, the professional investors in the city have much more use for TA than us, small retail investors.

However, for us, it can be used well to try and time a good entry point.

For example, you like Stock XYZ and calculate its current value to be around £100, with a Margin of Safety.
However, you don’t necessarily buy at £100 because Stock XYZ carries on falling. But, when the trend turns around and an uptrend begins - that would be the entry point.

Just my thoughts on TA. For me, fundamentals and the long-term outlook are more important. Although I do find it interested looking at charts, to try and find the best entry point!


(Dave Smith) #14

The thing to remember about TA is it’s not a prediction, It’s a way to try and weigh up probabilities. It will never be right 100% of the time, but as long as your risk management is good it only needs to be right 51% of the time

Also certain market conditions do show up on the graphs, if the market is running out of buyers, certain patterns will emerge. That might signal that the top is near. That doesn’t mean a piece of news won’t come out that creates a load more buyers, But as long as you only treat it as a probability and not a prediction that’s OK


(Alex Sherwood) #15

Not yet anyway..:crossed_fingers:


#16

I don’t personally have a particular view on Greggs as an investment right now, but it interests me how much Greggs has become part of the fabric of UK society. Couple of stories here on Greggs as a sort of barometer of national culture.


(Aris David) #17

Google trend of Greggs.


#18

Greggs timed this well with Veganuary. Although they struggled to keep up with the demand.

The other fun fact about Greggs is they have their own diet ( minimiseme ), which consists of eating items purely from their menu.


(Andrew Clark) #19

My thesis was that, just like potatoes, as the economy sinks then Gregg’s shares would increase as people turn to cheaper lunches. Also up 26% and feeling like a stock-picking guru!


(Andrew Clark) #20

I’m not saying there is a link but I was wearing my Freetrade socks when I made that pick…