The stock market has enjoyed a bit of a rally these past few days as new data shows existing vaccines should be effective against the Omicron variant.
However, with infection rates trending to all-time highs, speculation is emerging of another round of UK lockdowns in January next year. If that were to happen, the recent stock market rally could quickly be reversed.
Early 2020 serves as a good preview of what 2022 lockdown restrictions could mean for investors. But assuming the worst comes to pass, which stocks are the best to buy now to protect my portfolio?
I’ve spotted one business that might not only be able to survive the storm but also thrive in it. Let’s take a look.
Takeaway ready and waiting
Despite being stuck at home last year, it seems a large portion of the British population weren’t too keen on cooking their own meals. This is evident when looking at the various food takeaway services which saw massive spikes in order volumes throughout 2020.
After restrictions started loosening, more people ventured back into pubs and restaurants. But the demand for takeout has remained elevated. And now that the probability of a January lockdown is on the rise, takeout may once again become the go-to dinner option.
One stock in particular that has caught my attention is Domino’s Pizza Group (LSE:DOM). This franchise chain profited from some significant tailwinds during the early days of the pandemic. While there were some initial disruptions, the company shifted its customers from collection-based ordering to delivery.
As a result, like-for-like system sales grew a respectable 10.3% by the end of the year, with net debt falling by around £61m and underlying profits also on the rise. Now with a Covid-ready operational structure in place, should the January lockdowns become a reality, Domino’s might be able to thrive even more than before. At least, that’s what I think. And it’s why Domino’s is on my best-stocks-to-buy list.
What could go wrong?
Even if a January lockdown doesn’t happen, Domino’s may still be able to thrive. Its continued strong performance throughout 2021 serves as evidence of that. However, just because it might be one of the best stocks to buy doesn’t mean it’s a risk-free investment.
The company is certainly not the only takeaway option. In fact, many restaurants deployed a takeaway service last year to get some revenue flowing when table dining was prohibited. And with more options available than before, Domino’s may struggle to attract a rapid rise in order volumes. Needless to say, this potential loss of market share would be bad news for its share price.
Best stock to buy for a January lockdown?
Despite the risks Domino’s faces, I remain optimistic about its share price potential. And having enjoyed its pizzas during last year’s lockdowns, I think it’s likely I’ll be doing the same in January, should restrictions return. Therefore, I am considering this business as a potential new addition to my portfolio.