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The FTSE 100 index is up around 18% over the past 12 months, before dividends. That’s a solid performance by any measure, especially when there’s ongoing uncertainty around the direction of interest rates and the Middle East conflict.
However, Applied Nutrition (LSE:APN) demonstrates why picking individual shares can be so lucrative. Over this period, this FTSE 250 stock has skyrocketed from 130p to 335p, pocketing investors a juicy 157% gain.
Unfortunately, I only got involved in April at 216p. Yet I want to add to my holding because I think this £835m-cap company will be larger in future. Why am I so bullish?
More than a protein maker
Founded in 2014, the company designs and makes premium nutrition supplements. It caters for a wide range of customers, from professional athletes and fitness enthusiasts to everyday gym-goers.
Here are some of its most popular products:
- ABE (All Black Everything): Europe’s most popular pre-workout brand.
- Critical Whey: its signature multi-protein blend.
- ISO-XP: a highly filtered whey protein isolate.
- Flavo Drops: a zero-calorie solution to sweeten coffee and porridge.
- Shred-X: a fat burner.
- Collagen peptides: part of its everyday wellness line.
- Critical Oats: protein porridge.
Many of these act as gateway products. For example, I started off with the firm’s creatine and ISO-XP (which is far superior to lumpy rival formulas), then added Critical Greens, ABE, and Test-X (a testosterone booster supplement) to my stack.
Lately I’m using the firm’s toffee caramel Flavo Drops in my coffee!
Big international growth opportunity
It seems I’m not the only repeat customer, as growth has been exceptional. Revenue is up from £35m in FY22 to an expected £149m for FY26 (which ends this month). Net profit has grown at a compound annual rate of 39% across this time.
Applied Nutrition has an innovative culture, enabling it to test and launch new products and flavours (like its popular Slush Puppie) faster than rivals. UK growth’s being driven by expanded partnerships with major supermarkets like Tesco.
A key attraction for me here is the international opportunity. In H1 FY26, the brand saw strong growth in Spain and Germany, alongside a 110% sales boom in Latin America.
To capitalise on the opportunity across the pond, the company has acquired Nutrablend, a smaller rival that has a 107,000 sq ft manufacturing facility in New York.
Risks to montitor
As much as I’m excited about the potential, there are some risks. Perhaps the most pressing is rising inflation, which could result in some cash-strapped gym-goers downgrading to non-premium products.
Additionally, the Iran war might send the price of raw ingredients soaring, particularly whey protein. An expanding international presence also introduces potential currency volatility, particularly with the US dollar and euro.
Growth at a reasonable price
The world is changing. 84% of people surveyed said that wellness was seen as a top priority to them. 64% have swapped social activities to invest in health. Applied Nutrition is well-placed globally to capitalise on this macro shift in consumer habits.
COO Steven Granite
On balance though, I think the potential rewards outweigh the near-term risks. The stock’s trading at 24.5 times forward earnings, offering strong growth at a reasonable price. As such, this UK growth stock is worth considering. At 335p each, £1,500 would buy roughly 447 shares.
Should you invest £5,000 in Applied Nutrition Plc right now?
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Ben McPoland owns shares in Applied Nutrition.
This story originally appeared on Motley Fool
