Why Yowie shares climbed 15%

From Motley Fool

Why Yowie Group Ltd shares climbed 15% today

Yowie Group Ltd (ASX: YOW) is a tasty little company that it may pay to keep an eye on.

The company has launched a chocolate treat (an Australian version of Ferrero’s Kinder Surprise eggs) into the US, thanks to a patent that allows the company to circumvent a law that has so far kept Kinder Surprise from entering that market.

It’s already popular in Australia and New Zealand, selling millions of units each year, (65 million in its first full year).

Today Yowie announced that has secured a large US national convenience store account. Valero Corner Store has 1,100 stores in the US and 1,900 if you include Canada. By comparison, Woolworths Limited (ASX: WOW) has 872 stores in Australia, while Coles – owned by Wesfarmers Ltd (ASX: WES) – has 741 stores.

The company also says it has agreed deal terms with two Tier 1 national retailers and purchase orders are imminent.
Yowie says it will initially roll out to 235 stores commencing in August, and is anticipating a successful launch, which would result in a national rollout to most if not all stores across the US. No wonder the shares rose 15% to 73 cents today!

With a presence in just 20% of US states, Yowie has plenty of potential growth ahead. While the company reported a loss for the six months to December 2013, revenues were up 16% and could accelerate thanks to the potential orders in the pipeline. It may not be long before this company begins to start posting some decent profits.

As an indication of the potential growth, Ferrero sells 2 billion Kinder Surprise eggs globally a year, for around $3.5 billion in sales. Now I’m not saying Yowie will achieve that, but it shows what is possible, and it could be one of the stocks to drive your portfolio to $1 million dollars.