Follow buying by Greggs’ (GRG) boss Roger Whiteside and fellow directors, even after a surge in the bakery retailer’s share price. Shares believes further success stemming from self-help measures, combined with a more confident UK consumer, should support further earnings upgrades and drive additional upside in the stock.

CEO Roger Whiteside bought (25 Mar) 31,634 shares in the Newcastle-upon-Tyne-based baker in two tranches of 15,817 shares, investing £323,204 to take his stake to 88,070 or 0.09%. The buying took place not long after Greggs posted (4 Mar) annual results and flagged a strong start to 2015, triggering yet another round of earnings upgrades.

Greggs has clear momentum at its heels, with deflationary factors boosting the purchasing power of the UK consumer and self-help measures including a focus on its core food-on-the-go market as well as improvements to product, service, stores and supply chain.

Like-for-like sales grew 4.5% last year, the strongest same-store growth seen since the recession. With its finances strengthening, the cash-generative baker has also returned to a progressive dividend policy and resumed its share buyback programme, flagging capacity to return up to £10 million in the first half of 2015.

For the current year, Shore Capital forecasts near-16% pre-tax profit improvement to £66.7 million (2014: £57.6 million) for earnings of 50.4p (2014: 42.7p).

Greggs’ share price has had a storming run up to £10.50 and the baker isn’t cheap on 20.8 times forecast earnings. Yet there’s clear momentum behind the business, so stay positive.

THE TRADE

Buyer: Roger Whiteside, chief executive

Consideration: £323,204

No. of shares bought: 31,634

Subsequent holding: 88,070 (0.09%)