The FTSE 250, as I write, is trading strongly at near all-time highs of 23,568.19, showing a strong recovery since lows of 13,592.64 in March 2020. Within the index, its constituents are constantly moving around. Among today’s risers are easyjet and Wizz Air, which are currently up 6.89% and 4.60% respectively. Indeed, these shares were trading at discounts last week and our commentators were quick to spot that in recent posts. As ever, I am always on the hunt for new value picks. And I believe I’ve found one of the best stocks for me to buy now: J D Wetherspoon (LSE: JDW).
Why do I see value in Wetherspoons at the moment?
Wetherspoons, the famous haunt of students in search of the UK’s cheapest pints, is enduring a tough year on the market. With strict lockdown measures causing pub closures and limited venue capacities, supply chain issues preventing access to certain beer brands, and the planned return to 20% VAT cutting into profits, it is understandable that the pub and restaurant chain has struggled massively. Its share price is down over 25% since March, and as I write, trading at 1,022p – far below its five-year average. While its price remains depressed, I see for myself a fantastic opportunity to buy this share before it recovers.
I see one key factor to suggest an impending rise of Wetherspoons stock: the return of students to universities. Never before have they been so influential; after 18 months out, the kids are ready to party. Universities are holding bumper freshers’ weeks for both first and second years (who missed out in 2020), so it’s likely that the ‘Spoons in your nearest city will be teeming with young people throughout September and October. That’s good news for owner Tim Martin, who, despite his outspoken nature, does supply the most affordable drinks in the country. For cash-shy students this is a godsend, as Wetherspoons is often the only pub where undergraduates can revel without breaking the bank. The affordability of bars has also not been aided by the rise in menu costs that has become increasingly noticeable since inflation worries started to take shape.
Wetherspoons has another attractive quality that I believe makes it one of the best shares to buy today. The company pays its staff a bonus each year, and has often given away free shares to its employees too. In the last five years it has paid a greater percentage of profits to employees than John Lewis, which is famously employee-owned. This is reassuring news to those sceptical of Martin’s employee treatment. If performance recovers to its 52-week high of 1,452p, then best believe that the lion’s share of profits will be paid to hardworking staff.
For these reasons, I believe Wetherspoons shares are one of the best for me to buy now.