Overlook your normal New Yr’s resolutions like getting extra train, studying extra books, or lastly sorting the storage out. They’re essential, however proper now my thoughts is on one thing else: shopping for extra dirt-cheap Greggs (LSE:GRG) shares for my Self-Invested Private Pension (SIPP).

Following heavy share price weak point, I opened a place within the FTSE 250 baker again in November. And it nonetheless seems to be grime low-cost to me, making me assume that I ought to snap up extra of its shares.

Traditionally low-cost

At £28.02 per share, the Greggs share price presently instructions a ahead price-to-earnings (P/E) ratio of 19.4 occasions.

That’s a long way above the FTSE 250 common of 14.2 occasions. Nevertheless, it’s effectively under the five-year common of 23.4 occasions for Greggs shares (excluding 2020, when the pandemic battered earnings).

I’d been contemplating shopping for Greggs shares for a while. Early October’s price drop — which was prompted by a cold market response to newest financials — inspired me to lastly press the Purchase button.

Stable Q3 numbers

Third-quarter numbers on 1 October confirmed like-for-like gross sales development (from Greggs’ company-owned shops) of 5% between July and September.

On the draw back, this was decrease than the 7.4% rise within the first half of 2024. Nevertheless, third-quarter numbers had been nonetheless stable sufficient in my opinion, contemplating the sturdy comparables of the yr earlier than. In the course of the three months to September 2023, corresponding like-for-like gross sales rocketed 14.2% yr on yr.

Moreover, the baker stated that September was “the strongest month of the quarter“, suggesting that gross sales had been choosing up steam once more.

With Greggs additionally reducing its value inflation estimates, I discover its share price drop laborious to fathom. The enterprise stated that full-year inflation would possible be “in direction of the decrease finish of the 4-5% vary beforehand communicated“.

Glorious returns

Since 2014, Greggs shares have delivered a mean annual return of round 19%. This contains capital good points alongside dividend revenue.

That’s much better than what the FTSE 100 and FTSE 250 have delivered in that point. Complete returns from each these UK indexes are round 6%.

And I count on Greggs to maintain serving up market-beating returns. One purpose is that it plans to proceed its profitable retailer growth programme.

Up from round 1,650 retailers simply 10 years in the past, the corporate had 2,559 on its books as of the final depend in September. And it’s constructing capability to boost the quantity to three,500 over the following few years, which can embrace bettering its footprint in doubtlessly profitable journey areas like practice stations.

I’m additionally liking the baker’s rising deal with franchise retailers, serving to it hold management on prices.

I count on Greggs’ share price to renew its sturdy momentum sooner somewhat than later. In truth, I believe a rebound might occur as quickly as subsequent week (9 January) when the baker releases fourth-quarter buying and selling numbers.

Market competitors, value inflation, and potential execution issues because it expands all pose threats to future returns. However on steadiness, I believe Greggs might be the very best development inventory for me to purchase in early 2025.