It’s grim, to be sure. However, I’m not selling a single thing. In fact, I’m looking to top up on some quality stocks that now look even better value and could bounce back strongly in 2023.

Almost 50% down!

Nearly halving in value year-to-date, shares in baked goods retailer Greggs (LSE: GRG) have fared far worse than the FTSE 250 index. That’s been sufficient to completely eradicate all my tasty paper profit and send me back underwater.

Could things get worse before they get better? Absolutely. The political shenanigans we saw last week look set to continue, leaving investors scratching their heads as to what to do next. And the one thing we can be absolutely sure about is that the stock market absolutely hates uncertainty.

But I’m looking for positives. Greggs has repeatedly shown itself to be a great business that’s survived many a period of market malaise. And while it certainly isn’t the only option for hungry shoppers and travellers, its value-focused offering is likely to appeal more than most in difficult times.

Trading well

Perhaps most importantly, the food-on-the-go retailer has been trading in line with expectations. Total sales were up almost 15% in Q3. The company also elected to keep its guidance on cost inflation steady at roughly 9%. So long as it can maintain this form, I’m increasingly confident that the Greggs share price could fly back over 3000p again in 2023.

In the meantime, there’s a secure 3.5% dividend yield for those holding the stock. As always, I fully intend to reinvest this back into the market, thus benefiting as much as I can from compound interest.

Quality going cheap

But Greggs isn’t the only FTSE 250 firm whose share price I think (hope) will bounce back to form in 2023.

Having made good money on the stock in the past, I’m also taking advantage of a huge dip in the company’s value to re-build a stake in fantasy figurine maker Games Workshop (LSE: GAW).

Again, this company’s stock has underperformed its index, dropping almost 40%. But, again, I’m looking at the fundamental business, not a constantly-moving valuation driven by near-term sentiment. And in my mind, there are few better UK firms.

While I do confess to not knowing an awful lot about its fantastical world, I do know that Games Workshop possesses a dominant presence in a niche market, a bulletproof balance sheet, and massive margins. All this makes a price-to-earnings (P/E) ratio of 16 — far below the five-year average of 23 — feel very reasonable indeed.

Don’t bottom-pick

Granted, there are still risks here. Even the most devoted followers of Warhammer 40,000 seem to be cutting back. Pre-tax profit in the most recent quarter fell to £39m (from £45m in 2021). Although expected by management, that’s not ideal.

But, paradoxically, it’s this temporary ‘pain’ that’s the Fool’s best friend. And when that recovery does arrive (and investors want to buy growth stocks again), I want to be on board rather than trying to pick the bottom and inevitably missing it.

The return of the high street?

One of the most recognisable high street names is Greggs (LSE:GRG). The bakery firm is looking to expand following impressive results. 

Despite this, its share price has fallen 28.5% in the past six months. It’s currently trading at 1,880p.

The business recently released results for the 13 weeks to 1 October. The report showed that sales were up 14.6%, year on year. 

Additionally, the company opened 90 new shops on a net basis. This is an indication that the firm has recovered to a position where it can once again focus on expansion, following a difficult period during the pandemic.

What’s more, it declared an interim dividend of 15p per share. This is consistent with last year, and it’s good to know that I could derive income from my investment. 

That said, I know this dividend policy may be subject to change in the future.

Greggs is facing inflationary pressures and expects inflation for the whole of 2022 to come in at 9%. However, the real number may be significantly higher.

Although this may be a problem, the business sought to act early and has forward purchased much of its food and energy. This gives me hope that it may not get hit too hard by rising costs.

Emerging markets recovery?

The second company that may be good value for my portfolio is Ashmore (LSE:ASHM). I already own shares in this emerging markets asset manager, but I suspect now may be a good time to add to my position.

The shares are down nearly 12% in the past six months and trade just above the £2 level.

The riskier emerging markets sector has been hit hardest by economic developments, like higher interest rates. 

It’s therefore no surprise that Ashmore reported a 32% decline in assets under management for the year ended 30 June. 

Furthermore, over the same period, operating profit fell from £192.9m to £119.2m. 

While this may seem disappointing, I always remember that Ashmore invests with a long-term mindset. 

With a diverse portfolio, including exposure to many up and coming Asian economies, I think the business could produce improved results as the economic shock of the pandemic passes.

It also has an attractive dividend yield of 8.11%, which is one of the highest on the market. I have already benefited from dividend payments as an existing shareholder.

Overall, both of these companies could be in strong positions to grow over the long term. Although Ashmore’s share price has fallen far below my entry level, I will buy more shares soon to reduce my average weighted price. In addition, I’ll buy Greggs shares to gain exposure to the recovering high street.

Investing

For me, investing is about giving myself the ability to make money that I don’t have to work for. I can’t work all the time (and I don’t want to). 

Businesses, however, can do this. So by buying shares in a business, I can own something that will make money for me even when I’m not working.

According to its website, Coca Cola sells over 1.9bn servings of its drinks each day. That’s just under 22,000 every second of the day.

If I owned stock in Coca Cola, as Warren Buffett does, I’d have an asset that can make money for me 24 hours a day, 7 days a week, 365 days a year.

That’s what investing is about to me. It’s about owning assets that generate cash continuously without me having to work for it.

Consistent earners

The two stocks on my list are Greggs (LSE:GRG) and Premier Foods (LSE:PFD). I think that both of these are companies that can consistently make money for me.

Greggs is listed on the FTSE 100 and has fallen by more than 44% since the beginning of January. 

The company makes and sells more than two million sausage rolls every week. That’s more than three every second. 

I think that this qualifies it as a business that can earn money for me even when I’m too tired to work. So I’d buy the shares today if I were looking to start building an asset base.

Premier Foods is listed on the FTSE 250. Since the start of the year, the stock is down 15%. 

A few years ago I wouldn’t have gone anywhere near this stock. Its debt was too high and the company wasn’t in a good financial position.

Today, though, things look quite different. Total debt has reduced from £498m in 2019, to £339 today. 

As a result, I would buy shares in Premier Foods if I were starting to invest today. The company produces packaged foods that have been popular with customers recently.

Economic conditions

In my view, Greggs and Premier Foods both can fare well in a recession. Their products are cheap and I think that this means that demand will remain steady even as household budgets come under pressure.

The risk with these companies comes from inflation. Having a low price point to customers means that neither Greggs nor Premier Foods has much scope to pass on higher input costs. 

I think, however, that both businesses are demonstrating a degree of resilience. Both are maintaining operating margins above 10%, which I think is good for these types of businesses.

The macroeconomic situation in the UK will influence how well these businesses do. But if I were starting to invest in companies that can generate money for me consistently, I’d buy these UK stocks.

Food-on-the-go retailer Greggs (LSE: GRG) has been a steady ongoing growth story since joining the stock market in 1984.  And despite the many decades of success with its expansion, the company remains hugely ambitious. 

Why I’m holding Greggs shares

Greggs has a “strong” new shop-opening pipeline. And there’s also a “significant” opportunity to improve the quality of the store estate via relocations and shop refits. The company’s website declares a goal to expand to “at least” 3,000 shops as its next target. 

And to put that in perspective, today’s third-quarter trading update confirms the business has just over 2,200 retail outlets across the UK. Of that total, around 380 are franchise partners.

Meanwhile, I’m encouraged by the figures in the report. It leads with the headline: “Trading in line and full-year expectations unchanged.” And City analysts following the firm had pencilled in modest single-digit percentage advances in earnings for 2022 and 2023.

In the 13 weeks to 1 October, sales increased by just under 15% year on year. And like-for-like-sales in company-managed stores rose by just under 10%. It seems the business is in good health and that has surprised the market a little. The stock is playing catch-up this morning. And it’s up more than 9% as I write.

Over the past year, the general market malaise has pulled down Greggs shares. And the current share price close to 1,886p is around 33% lower than it was this time last year. However, the forward-looking earnings multiple for 2023 is just above 15. And I’d describe that valuation as fair rather than cheap.

Steady, profitable growth

Nevertheless, the absence of a bargain-basement valuation doesn’t dampen my enthusiasm for the long-term growth prospects of the business. So far this year, Greggs has opened a net 90 new shops. And the directors’ expectation of achieving 150 openings for 2022 is unchanged.

Looking ahead, the company expects the full-year outcome to be in line with expectations. So, despite all the scary macroeconomic and geopolitical headlines, Greggs has been grinding on as normal. And to me, that means steady, profitable growth from a well-loved brand.

I’ve been impressed by the way it has evolved its expansion strategy to find new markets. It now has a thriving delivery and click-and-collect operation. And it’s been making huge strides penetrating suburban locations and places where people “travel, work and/or access by car”. 

These days, it seems we can find a Greggs almost anywhere. But I’m not worried that the company may be getting close to saturating its markets. And I don’t think it faces realistic competition from more upmarket brands. It has a good-value proposition and I reckon there will always be a strong market for that.

Despite my bullishness, it’s possible for the shares to disappoint me in the long term. Any business can face operational challenges from time to time. However, the business has just demonstrated its resilience during difficult times. And I’m optimistic the stock can turn out to be my investment of the decade.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Greggs 

What it does: Greggs makes and sells sweet and savoury foods through more than 2,000 stores across the UK.

By Royston Wild. Morning-goods retailer Greggs (LSE: GRG) might not be suitable for risk-averse investors. Even food specialists are suffering from weakening demand during the cost-of-living crisis. At the same time, worsening inflation is putting growing pressure on the baker’s bottom line. 

Having said that, I think it has the tools to continue growing earnings even as recession approaches. So do City analysts, who think the business will report earnings rises of 1% and 4% in 2022 and 2023 respectively. 

Sausage rolls, coffee, doughnuts, and the other goods Greggs is famous for sell well at all points of the economic cycle. What’s more, the bakery chain sells its products at low price points, giving its revenues column extra resilience when consumers feel the pinch. 

This is why like-for-like sales rocketed 22.4% during the first six months of 2022. I’m expecting another impressive report when third-quarter trading numbers are released on Tuesday, 4 October. This could give the Greggs share price a lift following recent heavy weakness. 

Royston Wild does not own shares in Greggs. 

Associated British Foods

What it does: Associated British Foods is a diversified collection of businesses that includes retail, grocery, sugar and agriculture.

By Andrew Mackie: In a worsening economic environment, it might seem strange that I would choose a company whose revenue is so heavily reliant on retail. However, with Associated British Foods (LSE: ABF) share price languishing at a 10-year low, I believe the market is missing a trick here.

UK sales at Primark have been performing well and are nearly back to pre-Covid levels. However, the same cannot be said across continental Europe where like-for-like sales are down 18%. As the cost-of-living crisis intensifies, ABF is starting to see signs of a consumer spending slow down across all markets.

Whilst retail is struggling, other parts of the business are thriving. Surging sugar prices has meant that revenues are well ahead of last year. In addition, UK sugar production is up 14%. It’s a similar story in grocery, which is benefiting from price increases across a range of branded products.

ABF’s share price is now trading 17% lower than during the pandemic. That is despite all its Primark stores being open, a successful launch of its UK website earlier in the year and an expected Christmas launch of a trial click and collect.

Opportunities to pick up cheap shares in high-quality companies with proven business models don’t come along very often. The fact that ABF is a family-run business provides me with added reassurance. That is why I have been buying more of its shares recently.

Andrew Mackie owns shares in Associated British Foods.

IG Group

What it does:  IG Group Holdings is a UK-based financial technology company providing an online platform for traders.

By Paul Summers: Given concerns over rapidly rising interest rates and a prolonged recession, I suspect global markets could remain choppy for a while. Should this be the case, spread-betting supremo IG Group (LSE: IGG) might be a great place to park my cash. 

In contrast to most listed companies, this high-quality outfit actually benefits from volatility. This may be one reason why the share price has held up fairly well (albeit still down) over 2022.   

While never guaranteed, the dividend stream also looks enticing. IG shares currently boast a forecast yield of 6%. As inflation continues to bite, that’s worth grabbing in my opinion.

Sure, there are risks here. The industry it operates in is often targeted by regulators. Competition for clients also remains fierce.

With sky-high margins and a robust balance sheet, however, I can think of a lot worse places to be invested in these tricky times.

Paul Summers has no position in IG Group

B&M European Value Retail

What it does: B&M is a leading staple & discretionary discount retailer with over 1,100 stores across the UK and France.

By Zaven Boyrazian. B&M European Value Retail (LSE:BME) is one of the UK’s leading discount retailers for both staple and discretionary items. The group operates 1,016 stores across the country under the B&M and Heron Foods brands, with a further 109 locations popping up in France.

Lately, the tailwinds from the pandemic have started dying down, causing revenue growth to seemingly stagnate. Unsurprisingly, its share price has followed, falling by a massive 50% courtesy of the stock market volatility.

However, as consumers seek to cut spending, the popularity of discount retailers is rising. And suppose the worst comes to pass and the UK falls into a recession. This could create ample opportunities for B&M to steal market share from its larger competitors.

Being a discount retailer obviously means that pricing power is basically non-existent. But with positive trends already emerging in its latest results, paired with a P/E ratio of 7.6 and a dividend yield of 5.2%, I believe Now could be an excellent buying opportunity for my stocks and shares portfolio.

Zaven Boyrazian does not own shares in B&M European Value Retail.

Greggs

What it does: With around 2,300 outlets, Greggs is the UK’s leading fast food chain. It focuses primarily on baked goods.

By Stephen Wright. In an uncertain economic environment, I’m looking for something stable. That’s why Greggs is my Best British share to buy in October.

Peter Lynch famously said that his initial interest in Dunkin Donuts came from seeing the constant queues outside – even in a recession. I feel the same way about Greggs.

From what I can see, the current cost-of-living crisis appears to be making no difference to this company. It’s easy enough to see why. 

The company’s products are familiar and inexpensive. This means that they’re less likely to get cut from the budgets of price-conscious consumers.

At a price-to-earnings (P/E) ratio of under 16, I don’t think that the stock is particularly expensive. The company also generates solid returns on equity.

There’s a 3% dividend for investors looking for passive income and the company plans to expand to 3,000 stores in the future. I’d be willing to buy shares for my portfolio at today’s prices.

Stephen Wright does not own shares in Greggs.

BT 

What it does: BT is a UK-based telecommunications company with operations in over 180 countries.

By Charlie Keough. My top British stock for October is BT (LSE: BT-A). The BT share price has failed to take off in the last five years. And this decline has continued into 2022 due to inflationary pressures. However, I think its shares could be a strong long-term buy.  

Firstly, its attractive 5.7% dividend yield is a great way for me to put my money to work at a time when stagnant cash is losing value.  

Further, I like the large infrastructure that BT already has in place. This provides the firm with, to some extent, a higher degree of pricing power. It’s also on track with its Openreach rollout, while its 5G network now covers more than half of the UK.  

What does concern me is its £19bn of debt. With interest rates rising, this will only become more difficult to eradicate. 

However, I think its solid foundations will help BT overcome the challenges it will face in the foreseeable future. I’d buy some shares this month.  

Charlie Keough does not own shares in BT.  

BAE Systems

What it does: BAE Systems is a leading defence, aerospace, and security company that serves both the UK and US governments.

By Edward Sheldon, CFA. BAE Systems (LSE: BA) strikes me as a relatively safe pick in the current environment. Given the high level of geopolitical uncertainty arising from the Russia-Ukraine crisis and the tension between China and Taiwan, governments are unlikely to reduce their defence spending any time soon.

Aside from the supportive backdrop, one thing I like about BAE Systems is the attractive dividend yield on offer. At present, analysts expect the company to pay out 26.3p per share for 2022. That equates to a yield of over 3% at the current share price. The company is also buying back its own shares – an extra reward for shareholders.  

It’s worth pointing out that if the Russia-Ukraine crisis was to come to an abrupt end, sentiment towards defence stocks could deteriorate. This could have a negative impact on BAE Systems’ share price. Overall, however, I think BAE is a good stock to own right now.

Edward Sheldon has no position in BAE Systems.

InterContinental Hotels Group

What it does: InterContinental Hotels Group operates a number of different hotel brands across the globe, including Regent Hotels, Crowne Plaza, and Holiday Inn. 

By Andrew Woods. My top British share for October is InterContinental Group (LSE:IHG). This hotel operator was battered during the pandemic, as virtually all of its hotels were forced to close. As a result, it slumped to a $280m pre-tax loss for 2020. By 2021, however, when many restrictions subsided, the business reported a pre-tax profit of $361m.

For the six months to 30 June, the firm stated that operating profits doubled to $377m. Furthermore, it announced that it was reinstating its dividend for the first time since 2019. It paid an interim dividend of ¢43.9 per share, a 10% increase compared to the same period in 2019. Moreover, it’s embarking on a $500m share buyback scheme. This is a signal that the company is in a strong financial position, although I’m always aware of the threat of further pandemic variants.

The business also offers geographical diversity, with established operations in the US and Europe, and a growing presence in China.

Andrew Woods has no position in InterContinental Hotels Group.

Reckitt

What it does: Reckitt is a consumer goods company. It primarily produces health, hygiene, and nutritional products, and is famously known for brands such as Dettol, Strepsils, and Durex.

By John Choong. As the UK heads into a recession, discretionary spending is expected to decline. However, demand for products from Reckitt (LSE: RKT) isn’t likely to wane due to its inelasticity as consumer staples, thus making it a contender for a position in my portfolio this October.

Although inflation can’t be ignored, the superiority of its brand appeal is unmatched across many of its product categories. This has allowed the group to raise the prices of its products while maintaining healthy profit margins of 22.5% in its latest half-year results, with management expecting better growth in the second half of the year. The fact that Reckitt earns the bulk of its revenue from outside the UK also makes it a safer investment due to the geographical diversity of its income steam.

Nonetheless, it’s worth noting that Reckitt’s balance sheet isn’t the healthiest. Having quite a high debt-to-equity ratio (107%) isn’t ideal in a high interest rate environment, and is something I should definitely take note of.

John Choong has no position in Reckitt.

Analysts in the UK don’t always publish earnings previews for quarterly or half-year periods. Therefore, the upcoming figures can only serve as an indication as to whether the companies’ full-year forecasts can be met.

Tesco (H1 earnings)

Tesco (LSE: TSCO) is the UK’s biggest supermarket. Apart from selling groceries, the retailer also has businesses in fuel, banking services, and mobile phone plans. It also has operations in several European countries. Tesco is set to reveal its H1 numbers for its six months performance ending August on 5 October.

The earnings preview for the FTSE 100 giant indicates a decline in the bottom line number for its full-year forecast. This is most likely due to the worsening cost-of-living crisis that will undoubtedly impact margins.

Excluding fuel, overall revenue saw a year-on-year decline in Q1. With fuel prices cooling since the last quarter and discounted grocers such as Aldi and Lidl taking market share, Tesco may see negative growth in this half. As such, expectations for earnings numbers on Wednesday are relatively modest. Tesco will have to surprise investors with better-than-expected numbers and margins for its share price to see any respite to its recent decline given the current market climate. This is unlikely to happen, so the supermarket will have to announce something revolutionary to sway investor sentiment.

Greggs (Q3 trading update)

Greggs (LSE: GRG) is a British bakery chain. The bakery is best known for its savoury products such as bakes, sausage rolls, sandwiches, and for sweet items that include doughnuts and vanilla slices. The Newcastle-based firm is expected to unveil its Q3 numbers for its three months performance ending September on 4 October.

Greggs doesn’t disclose revenue or earnings figures for its quarterly updates, so a direct comparison can’t be drawn this October. Rather, the pastry maker discloses metrics such as like-for-like sales and shops opened, which are useful indicators too. These can serve as an earnings preview for investors to determine whether the FTSE firm is on track to hit its ambitious growth targets by the end of the year.

Throughout the year, Greggs has acknowledged the impact of price pressures. Because of this, the board’s expectations for the full-year outcome remain unchanged as they do not expect material profit progression in the year ahead. That being said, investors will definitely be paying close attention to the outlook on Tuesday. Any downward revisions to earnings expectations could see the Greggs share price drop further as investor sentiment remains fragile after the most recent market turmoil last week.

RS (Q2 trading update)

RS (LSE: RS1) is a distributor of industrial and electronics products. Formerly known as Electrocomponents, the FTSE 100 company provides product and service solutions for designers, builders, and maintainers of industrial equipment and operations. RS is scheduled to report its Q2 numbers for its three months performance ending September on 6 October.

The distributor is only expected to release its full set of figures in its H1 earnings report on 3 November. For that reason, the upcoming trading update serves as an earnings preview for investors to get a couple of hints as to whether the FTSE company had a good first six months, and whether it’s able to hit analysts earnings estimates for the year ahead.

The UK’s favourite bakery chain

Greggs is the UK’s largest bakery chain, with close to 2,000 locations across high streets, retail parks, shopping centres, airports, and railway stations. It specialises in savoury products such as sandwiches, rolls, bakes, and sweet treats for those with a sweet tooth like me.

So what’s happening with Greggs shares currently? Well, as I write, they’re trading for 1,894p. At this time last year, the stock was trading for 2,892p, which is a 34% decline over a 12-month period.

Why I like Greggs shares

I always refer to the performance track record of a FTSE stock when considering them for my portfolio, although I am aware that past performance is not a guarantee of the future. Greggs’ recent half-year update for the six months ending July 2 made for good reading, in my opinion. Revenue, sales, profit, and earnings per share all increased compared to the same period last year. This is despite higher costs than before and the fact it had to raise prices. An interim dividend of 15p was also declared, the same as last year.

Next, Greggs possesses excellent brand recognition and pricing power. Through its profile and presence across the UK, it has become a staple for many, with its convenience, variety of products, and value for money too. In times of volatility, these aspects could serve it well, in my opinion. I believe this is shown by its recent trading update where it mentioned that despite increasing prices, it managed to perform well against tough economic conditions and headwinds.

Finally, Greggs shares would boost my passive income stream through dividend payments. At current levels, a dividend yield of just over 5% on offer is enticing. The FTSE 250 average is just under 2%. I am aware that dividends are never guaranteed, however. In times of economic volatility, dividends can be cancelled to conserve cash. If Greggs has to resort to this, I’d expect it to restart dividends as soon as possible.

FTSE stocks have risks

Despite my overall bullish stance on Greggs shares, I must note some bearish aspects to consider too. Firstly, the same macroeconomic factors that could cause a recession, would also have a material impact on Greggs performance and returns. Soaring inflation, the rising cost of materials, and the global supply chain crisis could all affect it. Rising costs could eat away at the profit margins that underpin growth and returns. Supply chain issues also affect operations and sales.

Next, the issues mentioned above have created a cost-of-living crisis. Although I believe Greggs has the brand and pricing power to overcome this, demand could be affected in the shorter term at the very least as consumers feel the pinch.

Conclusion

Overall I believe if a recession were to occur, and potentially another stock market dip, Greggs shares would be a great stock to have as part of my holdings for their defensive capability, brand power, strong balance sheet, as well as passive income opportunity. I would add the shares to my holdings.

This week, the National Institute of Economic and Social Research (NIESR) warned that the global economy is “fraying at the edges“. It reduced its global growth forecasts for the next two years — which stood at 3.3% and 3.2% for 2022 and 2023 respectively — to 2.8%.

The NIESR added that “there are increased recession risks in a number of countries” as inflation continues to soar.

Pleasingly however, there are many stocks on the London Stock Exchange where trading should remain robust — or perhaps even thrive — in the event of a recession.

Here are three I think cautious investors like me should buy this August:

1. Begbies Traynor Group

Begbies Traynor (LSE: BEG) is a stock which thrives in tough times like these. It’s an insolvency practitioner and provides other services for companies in distress.

In fact, the business is already performing strongly as the United Kingdom economy flatlines. It’s why it said last month it already expects full-year trading to be towards the top end of expectations for the financial year beginning May.

Fresh Insolvency Service data this week suggests that profits forecasts could be steadily upgraded too. This showed the number of corporate insolvencies in England and Wales hit a seasonally-adjusted 5,629 in quarter two. This was up a whopping 81% year-on-year.

My only concern with Begbies Traynor is how a lack of suitable acquisitions could hit its long-term growth strategy.

2. Greggs

Greggs (LSE: GRG) is another top stock to buy for when times get tough. This is because Britons’ love of a hot drink and a sausage roll remains undimmed at all points of the economic cycle.

It’s also because the baker’s large ranges of low-cost foods are perfect products to sell when consumers feel the pinch. This explains why sales jumped 27.1% year-on-year in the first half of 2022.

There are other reasons why, as an investor, I like Greggs. Steps like introducing meat-free and healthier options to its menu have proved highly successful. So has its decision to embrace e-commerce and introduce services like click & collect and delivery.

I’d buy Greggs shares despite the rising threat of cost inflation to its profits.

3. Premier Foods

Finally, I’d also snap up shares in Premier Foods (LSE: PFD) today. That’s even though it operates in a highly-competitive marketplace.

Like Greggs, this stock benefits from the fact that our need for food remains constant, irrespective of broader conditions. And just like the baker, Premier Foods has a broad stable of foods that are cheap to buy and prepare. Products such as its Batchelors Super Noodles and Cup a Soup.

The strength of its popular brands like Mr Kipling also help profits remain stable during recessions. As robust recent results from Unilever and Reckitt show, shoppers continue to buy the brands they love in massive volumes, even when their purses are lighter. This enables companies like this to keep raising prices.

Now, it’s still uncertain when the stock market will fully recover. High inflation is the biggest challenge facing the world’s central banks. And their policy to tackle rising prices could cause a deeper recession.

But I’m looking further ahead. As a long-term investor, I want to know which shares to buy and hold that could thrive over the coming years.

Top shares to buy

At the top of my list is the most valuable company in the world, Apple (NASDAQ:AAPL). This is a high-quality business.

Even renowned investor Warren Buffett likes these shares. That’s despite having avoided technology stocks for many years.

So much so, more than 40% of Buffett’s Berkshire Hathaway (NYSE:BRK-B) portfolio is now composed of Apple shares. That is quite some conviction.

And I can see why. It has one of the strongest and most recognisable brands in the world. Apple also runs a closed ecosystem, making it very difficult to switch to competitors. That results in customers that remain for years, providing Apple with significant repeat business.

Buffett once said, “in business, I look for economic castles protected by unbreachable moats”. The moat he refers to is a solid competitive advantage. And for Apple, that’s brand loyalty, in my opinion.

A word of caution, however. Rising energy and food costs might lead to tighter pockets for many consumers. And some might think twice before upgrading their phones and laptops, or some customers might delay their purchases.

Overall though, this is a cash-heavy and resilient business. I already own some of these shares but I’d be more than happy to buy some again before the market rebounds.

From apple to bread

When looking for the best shares to buy, I like seeing businesses that have a strong customer proposition. Whereas Apple targets the premium end of smartphones, my next share targets the value end of baked goods.

I speak of England-based bakery chain Greggs (LSE:GRG). Like Apple, it has built a strong brand throughout the country, even gaining a cult-like following from parts.

Recent sales have been encouraging. For the six months to 2 July, pretax profit was higher than the year before. That’s despite higher operating costs.

Rising energy, staffing, and commodity prices has put pressure on many businesses. And Greggs is no exception.

That said, it was able to raise prices accordingly without seeing a drop-off in demand. That’s exactly the type of pricing power that I like to see.

As incomes get squeezed later in the year, many businesses could see a fall in demand. But Greggs offers low-value products. The average spend in a store is just £4, and I feel that customers are unlikely to alter their spending behaviour if Greggs needs to add a few more pence to their sausage rolls.

Greggs has a strong balance sheet and plenty of cash flow. It’s also planning to open around 150 new shops this year. Given its resilience, I reckon these are exactly the type of shares I’d buy for my Stocks and Shares ISA.

So let’s take a look at Greggs and see whether this stock is right for my portfolio?

Performance

On Tuesday, Greggs said that total sales for the 26 weeks to 2 July were up 27.1% year-on-year to £694.5m. However, pre-tax profits remained flat at £55.8m amid the re-introduction of business rates, an increase in VAT and rising inflation.

“We have worked hard to mitigate the impact of cost inflation on customers but some further small price increases have been necessary; these appear not to have impacted transaction numbers,” the company said.

Greggs said that inflation increased significantly in the first half of the year. It now expects cost inflation of 9% for the year.

The company highlighted that its low-cost offer was popular with customers amid the cost of living crisis. However, it is clear that as inflation puts increasing pressures on the business, the company will have to push sales hard just to maintain the current level of profitability.

Outlook

Greggs is an immensely popular high street brand and, fortunately for me, it’s got a good range of non-meat options. It’s also well-represented on delivery apps, meaning I can get hold of a Greggs vegan sausage roll even though the closest shop is some distance away.

It’s brand reputation gives it defensive qualities that will likely serve well during an economic downturn, and that’s what we’ve been forecast.

And I appreciate that it’s an increasingly attractive option to households who are running short on cash right now. The vegan sausage roll costs £1.25 and provides 311 calories.

People might delay big ticket purchases such as houses and cars, but customers will continue buying cheap sausage rolls from Greggs because it’s a friendly British brand… and its cheap.

So, because of these factors, I’ve been keeping a close eye on Greggs.

However, in the long run, Greggs’ unhealthy food offering concerns me. Boris Johnson’s government U-turned on banning fast food adverts in February, but in the coming years there will be increasing pressure to move away from cheap, calorie-intense, nutritionally-sparse foods.

In fact, there needs to be. On average, Britons are vastly overweight and the burden of healthcare will be too much unless trends are reversed. It might not just be advertising bans, but maybe a fat tax that would hit fast food brands, which typically have small margins, hard.

Moreover, Greggs shares aren’t cheap. It has a price-to-earnings ratio of 18 which, considering the generally low valuations on the index, doesn’t look like great value.

So while I’m tempted by the short-term outlook for Greggs, which I see as largely positive, in the long run I contend that fast food will slowly become a thing of the past. So, as a long-term investor, I won’t be buying Greggs shares.