Stocks to Buy for the Next Decade: Blue Buffalo Pet Products (BUFF)
If you bought Blue Buffalo Pet Products Inc (NASDAQ:BUFF) at its July 2015 IPO price of $20 and you’re still holding it through April 17, you’ve made money — barely.
The pet food maker has been on a wild ride since going public almost two years ago. It opened with a first-day return of 36%, but proceeded to fall from $28 to $16 in the span of a couple months, only to gain most of that back by its one-year anniversary.
However, BUFF is an explosive stock lying in wait.
Blue Buffalo is investing $150 million-$170 million in 2017 to expand its manufacturing capacity so that it can accommodate further growth beyond 6% of the $28 billion U.S. pet food market. In 2016, its adjusted earnings per share increased 27.2% to 79 cents; it expects that number to increase by as much as 19% in 2017 to between 91 and 94 cents per share.
Over the past five years, Blue Buffalo has more than doubled its revenues, from $523.0 million in 2012 to $1.1 billion in 2016, while growing net income from $65.5 million to $130.2 million in the same period.
People will continue to spend more on healthy food in the coming decade, and that includes for their pets. Blue Buffalo is ready to capture more of those gains, and BUFF shareholders will benefit as a result.