Just Eat PLC surges 6% on merger update: can it outperform Fevertree Drinks PLC, Greggs plc and Domino’s Pizza Group PLC.?

Does Just Eat PLC (LON:JE) (JE.L) have more investment potential than Fevertree Drinks PLC (LON:FEVR) (FEVR.L), Greggs plc (LON:GRG) (GRG.L) and Domino’s Pizza Group PLC. (LON:DOM) (DOM.L)?

Just Eat PLC
Just Eat PLC

The Just Eat PLC (LON:JE) (JE.L) share price has risen 6% today after news regarding its Hungryhouse merger. The CMA has said that it has provisionally cleared Just Eat’s acquisition of the business. It concluded that the transaction does not lessen competition, with a final decision expected in November.

This is clearly good news for the company, and the stock market has welcomed the news with a higher share price. Further gains could be ahead in the short run in my opinion as investors focus on the growth potential of the merged businesses.

In the last week, the Just Eat share price has risen 9%. That’s a better performance than other food and drinks businesses such as Fevertree Drinks PLC (LON:FEVR) (FEVR.L), Greggs plc (LON:GRG) (GRG.L) and Domino’s Pizza Group PLC. (LON:DOM) (DOM.L). The Domino’s Pizza share price has gained 8%, Fevertree Drinks is down 1% and Greggs has dropped 0.5% during the last 5 trading sessions.

In my opinion, Just Eat has investment potential for the long run. I believe it is capturing an increasing share of what could be a growing and highly lucrative marketplace. Advances in technology implemented by the company are making consumers switch to online ordering of takeaways and I feel this could provide a tailwind for the business in the medium term.

I also feel that if there is a consumer slowdown in the UK that the company could perform relatively well. Consumers may switch from dining out to less expensive takeaway options, and this may mean the company has relatively sound defensive characteristics. With what I view as a sound strategy which includes a mix of acquisitions and organic growth prospects, I’m upbeat about the long term prospects for the Just Eat share price. Therefore, I think it has sound investment prospects at the moment.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page