JD Wetherspoons (JDW) is picked as a buy in our investment forum this week, on the basis that our members like a pint! Well, there is abit more to it than that…..

As reported in our Top Stories section, despite the slump in share price this week the company is deemed worthy a buy. Undoubtedly the Wetherspoons pubs are always busy, whatever the time of day you go in, with a mix of drinkers and those looking for something to eat. They have a mix of clientele yet do not rely on the alcopop generation for revenue. Most importantly, their prices are at the lower end of the market, meaning they are well placed to attract customers in times of economic trouble. Let’s face it, if you want a trip out when times are hard, Wetherspoons has to be top of the list.

JDW stats confirm just how busy the pubs are. The Number One real ale pub also serves 400,000 breakfasts each week and is the worlds biggest seller of Lavazza coffee, Kopperberg cider and Pimm’s.

As for the financials, the shares currently stand at 260p, down 51p (17%) this week and down a massive 62% from this time last year. Sales for the first half of the year were up marginally to £440m, although profits fell 13% to £28.5m. The interim dividend was increased by 10% to 4.4p.

Now trading on a P/E of just 9.3, the shares look relatively cheap and brokers rate the shares as ‘overweight’, with 6 out of 18 brokers rating the stock as a ’strong buy’ (10 rate as neutral). Panmure Gordon reiterated their target price of 400p on 06th March which would generate a tidy gain of nearly 54% based on its current price.