Approximately six months ago I write about GRG (Greggs) the bakers (http://is.gd/Gnbafj), saying that the company, although high quality, was too stodgy to justify a PE in the 20’s. Its RS6m was in the top decile, but I thought that the momentum could not be sustained.
In the meantime, the shares rose to a high of about 1355p in July, but then dropped back significantly. The shares now trade at 1148p, only slightly above the price of 1144p I stated six months ago.
Despite my reservations, the shares have acquitted themselves well against the broader index. The ASX is down nearly 10%.
So far, the market has proven me wrong.