My favourite FTSE 250 stock right now is Applied Nutrition (LSE: APN). It’s actually the only FTSE 250 stock I own at present.
Is it worth considering for a Stocks and Shares ISA or SIPP? I believe so – here’s why.
A health and wellness powerhouse
Applied Nutrition is a leading maker of premium nutritional supplements (like protein powders, hydration drinks). A global operator, it sells its products both in stores (such as Holland & Barrett, Tesco) and online.
Now, I’ve covered this stock a few times in recent months and explained the bull case. In short, this company looks really well positioned to benefit from the growing focus on health, wellness, and nutrition (and the shift away from alcohol).
Exciting news this week
Since I last covered the stock, however, there has been some exciting news. Earlier this week, the company put out a trading update and raised its full-year revenue guidance.
In this update, it advised that it now expects revenue of £148m for the year ending 31 July versus previous guidance of £140m. That new target would represent year-on-year growth of 38%.
It noted that trading continues to be strong with continued momentum across the group. “Demand across our markets shows no sign of abating and we are well positioned to deliver on what consumers need for their health and wellness journey,” said founder and CEO Thomas Ryder.
It gets better though. In the update, the company also advised that it has acquired the trade and majority of assets of US-based Nutrablend Group for around £12m. As part of this deal, it will get a manufacturing and warehouse facility in the US.
This acquisition is going to offer many benefits for the group. Not only will it support production capacity of up to $300m of revenue per year in the US but it will also lower freight, logistics, and import duty costs in North America and enhance operational and supply chain resilience (reducing reliance on cross-border shipping).
On top of all this, Applied Nutrition announced that it has entered into a new licensing agreement with Mondelēz International for the development and manufacture of some branded sports nutrition products for the US and Canadian markets. The range will initially be stocked in 2,200 Walmart stores and 1,300 GNC corporate stores from August 2026.
So overall, it was a fantastic update. Not only was guidance raised but the company showed that it’s making some great operational moves.
Tipped to keep rising
Now, since the update, Applied Nutrition’s share price has moved higher. However, I don’t think it’s too late to consider getting involved here.
Looking at earnings forecasts for next financial year (starting August), the forward-looking price-to-earnings (P/E) ratio is only around 20. That’s not high given the level of revenue growth.
It’s worth noting that since the update, analysts at Deutsche Bank have raised their price target to 335p. That’s about 20% above the current share price so they clearly expect the stock to keep rising.
Of course, there are risks – a consumer spending slowdown is one scenario to think about. All things considered, however, I like the risk/reward set-up.
Should you invest £5,000 in Applied Nutrition Plc right now?
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Edward Sheldon owns shares in Applied Nutrition
