Started a position in Greggs Plc

That was quick.

I started a position in Greggs Plc. I bought 200 shares at £3.99 each and paid £3 in commissions.

I was struck by the ease with which I completed the transaction. Sometimes even when you know how things work, you are amazed at it nevertheless. I did not own Greggs 20 minutes ago and now I own a part of the business.

Greggs is the largest bakery chain in the UK and has more than 1,500 outlets across the country. It has more outlets than MacDonalds ! It is a fantastic business with good cash flows. On an FCF basis the company is not cheap i.e., sells for 40 times FCF but it has no debt, pays 5% dividend and has been buying back shares by the loads.

I hope the stock keeps falling and the position grows. At current prices, it does not cross by 30% return hurdle rate. For a fantastic business like this, with an average RoIC of 20% over the last decade, I don’t expect that the market will reward me so. But one hopes.

Greggs is going to be where I am parking the money I got from my Roche sale.

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