I have a total position of 200 shares $AAK (-4,08%) . This new purchase is intended to strengthen the defensive component of my portfolio.
Brief overview (with the help of AI):
AAK’s business model is considered relatively crisis-resistant (consumer defensives). AAK is one of the world’s leading manufacturers of specialty vegetable oils and fats. The company does not manufacture end products for supermarkets but acts as a critically important B2B supplier to global industry. In short: When you buy chocolate, cookies, cosmetics, or plant-based burgers at the supermarket, there’s a very high probability that they contain ingredients from AAK. These ingredients ensure that products have the right consistency, texture, melt characteristics, and shelf life. I also find the business segment focused on plant-based meat and cheese alternatives particularly exciting, because I believe this area still has a lot of potential.
Figures:
In the first quarter of 2026, the company posted robust volume growth (+3%) and an increase in operating profit, even though currency effects exacerbated headwinds. For the full year 2026, analysts expect earnings per share (EPS) of approximately 15.20 SEK (up from 14.14 SEK in 2025).
Return on Equity (ROE): approx. 16.9% – 17.8%
Return on total capital (ROCE): over 20%
Net debt, at approximately 3.37 billion SEK (as of the end of 2025), is well within manageable limits relative to operating cash flow and total assets.
Dividend: In May 2026, AAK paid an annual dividend of 5.50 SEK per share. Based on the current share price, this corresponds to a moderate but stable yield of approximately 2.2% to 2.4%. The payout ratio stands at a comfortable ~41% of earnings. An extra dividend was also paid in 2026, bringing the dividend yield for 2026 to 3.88% based on today’s share price.
Share Buybacks: On May 8, 2026, the annual shareholders’ meeting approved a massive buyback program of up to 5% of the share capital (approximately 13 million shares).
Opportunities:
Defensive moat: Specialty oils (e.g., for baby food or vegan alternatives) are difficult to substitute.
Share Price Support: The ongoing share buybacks generate steady buying pressure in the market.
Fair Valuation: A P/E ratio of 15 is quite attractive given AAK’s historical performance.
Risks:
Commodity prices: Fluctuations in the prices of vegetable oils (palm, canola, shea) could put pressure on margins in the short term.
Sluggish momentum: The market currently favors sectors with stronger growth; AAK needs fresh momentum from its upcoming quarterly results (Q2 results will be released on July 17, 2026 ).
Technical Analysis: The stock is in a long-term uptrend and is currently undergoing a correction that has reached a magnitude similar to that of previous corrections. It has found support in the area of the interim high from summer 2023, the 0.618 Fibonacci level, and below the 200-week moving average, and has since been working on forming a bottom, which was completed with the rise above the previous high at approximately 266 SEK. If the bottoming process fails, the next target could be the high from the summer of 2021 or around 200 SEK, where trading volume is also slightly higher again.
This is my first somewhat detailed analysis, so please bear with me. Feel free to share your thoughts on the stock.
