Source: Abilitato.de
Tech stocks are not the only way to build a fortune. But nobody expected that a yogurt manufacturer would become a tenbagger with the Kri-Kri share. Has the potential now been exhausted or is there another opportunity due to the low valuation (P/E ratio 12)?
Operational development
Kri-Kri is a leading yogurt and ice cream manufacturer.
Due to the health and wellness trend, demand for Greek yogurt is constantly increasing in all European markets.
As a result, the family business has been expanding at a double-digit growth rate for many years.
As the Group is doubling its production capacity by 2027, this trend is expected to continue in the coming years.
Despite the high level of investment, Kri-Kri generates an EBIT margin of around 15%. The return on equity even reaches 30%.
Further arguments in favor of the Kri-Kri share are the debt-free balance sheet and the prospect of significantly higher dividend distributions.
However, the earnings power of individual years is repeatedly distorted upwards (excess profits) or downwards (shortfall in profits) by the volatile milk price trend.
Valuation assessment
Investors can use phases of high milk prices (with correspondingly low profits) to enter anti-cyclically or increase an existing position.
This is because even if the milk price settles at a permanently high level, Kri-Kri can pass on the increased costs to customers with a slight time lag and thus return to an adequate margin.
However, it is more likely that the milk price will fall again at some point and then lead to an exceptionally good year with corresponding excess profits.
With an expected annual return in the clear double-digit percentage range and a P/E ratio of just 12.6 (2025e), the Kri-Kri share still appears attractively valued.
Personal approach
In my view, Kri-Kri is a great company that should be supported in its long-term growth and value appreciation as part of a buy-and-hold investment.
However, the stock is not suitable for every investor.
If you don't want to go wrong with your investment, it's better to stick with ETFs and blue chip stocks. On the other hand, those who want to build up as much wealth as possible can take a closer look at the Kri-Kri share.
The main risks are milk price fluctuations and increasing competitive pressure. For example, competitor FAGE is planning to open a new plant in the Netherlands at the end of 2027.
There is also the risk of an image scandal (recall), which would have a dampening effect on demand.
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