What's got me knocking on KTD's door is the $5 million cash flow positive last quarter and the following convictions.
It is a fact: businesses must continually innovate or they will die. Is KTD innovating?Yes, rapidly. (See their last few announcements, new products and websites) Many people, especially some SH on these threads!, don't like change. But KTD appears to have been establishing the main pieces of the entire chain, of which they now control the valued-added key pieces: So KTD has built the expertise in-house to go from product conception and testing in their kitchens to manufacturing and packaging a diverse range of products, to selling directly to consumers, to supermarkets and distributors nation- and world-wide. This control and diversification sounds like a dream come true, fantastic!!
KTD have been showing they're continually developing their own brands as well as maintaining the bread and butter, contract manufacturing, white-labeling.
They own and operate the required factories, multiple, which appear to be high-capacity and state of the art.
COVID-19 has accelerated and renewed the focus on making more things here+NZ so we're not vulnerable to international supply chains for example. Australians are buying more locally developed and made products.
Are KTD's newest products a good market fit?Probably, too early to know.
Is KTD well positioned to jump onboard future trends quickly to design, manufacture and distribute, as well as capitalise on current mooning trends? Absolutely! For example, next up appears to be the launch of an innovative, ready-to-drink and shelf stable baby formula...
In regards to their newest products, millennials in particular are drinking and eating less dairy and growth in consumption of plants for extra protein in particular is showing no signs of abating. (side note: This could be partly because we have significant problems to be solved in food: The world is going to require twice as much as what is produced today within 20 years, but effectively is running out of planet to harvest it from; in particular dairy milk and animal protein, which also can not be done quickly, nature has to take its course. Not even to mention the increasing awareness and empathy towards cruelty in animal agriculture, its environmental impact etc) --- So I think KTD's alternative milk and protein products are a good move! Well done KTD
So is KTD a BUY at current levels? What are the negatives? Thoughts?
KTD Price at posting:
22.0¢ Sentiment: Buy Disclosure: Not Held
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