Over the long run, Greggs (LSE: GRG) has been a good inventory market performer. Up to now 5 years, Greggs shares have moved up 18%. Over 10 years, the share price is up 69%.

Extra just lately, although, issues have appeared far much less rosy – one thing I see as a chance.

Poor one-year efficiency

Take the previous yr for instance. Throughout that point, Greggs shares have misplaced 31% of their worth.

So, somebody who invested £10,000 within the bakery chain a yr in the past would now be nursing a paper lack of round £3,100. Ouch.

Now, there would have been dividends alongside the best way too. The present yield is 3.6%, though the upper share price a yr in the past signifies that somebody who invested then can be incomes round 2.4%.

That will nonetheless have added up to roughly £240 over the course of yr. That doesn’t a lot assist the general efficiency, although, provided that £3,100 paper loss.

What has gone incorrect? Metropolis worries about weak progress mixed with increased prices resulting from elevated workers wage payments have harm buyers’ confidence within the inventory.

Enterprise is doing simply tremendous

These fears have some grounding in actuality, I reckon. They’re dangers. However I believe the fear has been overdone.

Final month, the corporate introduced that gross sales grew within the first 20 weeks of the yr.

Not solely did complete gross sales develop, however even stripping out new store openings and simply wanting on the like-for-like gross sales, there was progress of two.9%. That sounds modest however doesn’t point out an organization sick to me.

The sausage roll maker has not modified its expectation for price inflation and saved its full-year outlook the identical as earlier than.

In different phrases, issues sound like they’re ticking over just about tremendous.

I see a shopping for alternative!

Mixed with bold store opening plans, that might imply that Greggs has important medium- and long-term progress alternatives forward of it.

It has a confirmed enterprise mannequin, robust model, and a capability to create shopper buzz about what are basically mundane merchandise. That provides it pricing energy.

Nonetheless, whereas I’m upbeat in regards to the outlook, the price fall in Greggs shares signifies that they now promote for 13 occasions earnings. That strikes me as low-cost for an organization like this one, that I believe may very well be much more worthwhile in future than it’s now.

So I purchased some Greggs shares a number of months in the past. Final week, I then purchased some extra. I made a decision to behave, not wait, as I don’t count on the present price to be round in the long run. It is because I believe the share seems to be undervalued.

I’m glad I didn’t make investments a yr in the past, as I might now be nursing a big paper loss. At as we speak’s price, although, I reckon Greggs shares appear to be good worth, so I used to be completely happy to speculate.