Heads up, the Freedom Foods Group Ltd (ASX: FNP) share price is on a tear this month, rising 9%. Over five years it is up 700%!
Freedom Foods Share Price
Boy, I wish I was paying attention earlier!
Who is Freedom Foods?
Freedom Foods is a manufacturer of, as the name suggests, foods that can be considered 'good for you'. Its brands include So Natural, Australia's Own and Freedom Foods. The company specialises in allergy friendly products, such as gluten free muesli bars and nut free cereals. For people who have intolerances, Freedom Foods' products enable them to have at least a semi-normal diet.
However, the products come at a cost. For example, a six-pack of Freedom Foods gluten free bars will cost you up to $5.50 at Coles.
Growth
Freedom Foods is often lumped with other high-performing consumer wellness brands like Bellamy's Australia Ltd (ASX: BAL), Blackmores Limited (ASX: BKL) and a2 Milk Company Ltd (Australia) (ASX: A2M). In my opinion, it most closely resembles a2 Milk because it is a vertically integrated business, meaning it controls the product from the farm to the store.
As fellow Motley Fool writer, Matt Brazier, pointed out here it appears that much of the Freedom Foods' growth may have come from its acquisitions. The problem with acquisitive growth is that it is a minefield since you never truly know what's 'under the hood' of a business until you own it. And even if the company makes it through to tell the tale, it has to find a new strategy for growth. That's easier said than done.
Looking ahead, the company is taking aim at China for its next target. It is also expanding into infant products to satisfy the huge Asian market. Trying to get a sense of this growth may be a little difficult at this time, given the strategy (pardon the pun) is still in its infancy.
Buy, Hold or Sell
Freedom Foods has a lot of moving parts yet has proven to be a great investment. In my opinion, it deserves to be on your watchlist if you seeking long-term capital growth. However, the current share price does leave something to be desired, so a prudent investor may wait for a better entry point before hitting the 'buy' button.
Nonetheless, it is one that deserves your attention in 2017.
