Oatly (OTLY): Buy the IPO?

Key Points

• The stock market reversed direction after a better-than-expected new jobless claims report.
• Alternative milk producer Oatly (OTLY) went public with the backing of celebrities such as Oprah and Jay-Z. 

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Overall Market

The Stock Market Didn't Manage to Get Out of The Red Zone Yet Again Despite A Steady Upward Throughout The Day

Stock market indices ended Thursday in the green. The new weekly jobless claims report came lower than expected, boosting investors' confidence in the economic recovery. 

One interesting development that is worth discussing today is Chairman Powell's remark about cryptocurrencies. The Chairman released a video discussing the Fed is going to conduct another comprehensive review of digital currencies in the summer. 

This is one of the most critical indicators to argue that digital currencies' adoption has reached a meaningful level enough that they are worth the Fed's time and effort. The Chairman specifically discussed stable coins that their value is tied to the value of a dollar. He also addressed the risk of allowing private companies to run payment systems not regulated by the Fed. Here's a snippet of the most important section of the Fed's Chairman talking about digital currencies issued by central banks, also known as CBDCs.

I would interpret this as a sign that digital currencies are well on their way to transform the future of money and should be a part of future-focused portfolios.

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​Who IPO's?

Alternative Milk Market Leader Oatly (OTLY) Went Public With $13 Billion in Market Capitalization

Today, I looked at the list of 2021 IPOs by clicking on the 2021 IPO bubble on my main Stock Card dashboard. You have the same list as I do if you log in to your account. 

It seems more than 800 companies have IPOed since the start of the year. That's partially thanks to the rise of SPAC IPOs that allow companies to go public with less hassle. 

The one company that is noteworthy to talk about is Oatly (OTLY). Everyone's favorite oat milk company went public today. And, when I say everyone's favorite oat milk company, I mean it. Oprah Winfrey, Jay-Z, even former Starbuck CEO Howard Schultz are big fans and investors in the IPO. Who can blame them? Froth that oat milk to perfect temperature and pour over your espresso, and it's divine if you ask me. Nice! But, I digress.

Looking around the company's Stock Card, Oatly is unprofitable. However, revenue jumped more than 106.50% in the last fiscal year.

The alternative milk industry is expected to be a $40 billion industry by 2026, with more than a 10% growth rate per year. The stock has the market's momentum going for it. But also, several other companies, mostly private, are racing to grab a market share. It's going to be a competitive market. Oatly's brand could help it lead the market, but it's not a slam dunk, as some investors believe. 
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The company made $421 million in 2020 and has got $13 billion in market capitalization. That's a price to sales ratio of about 30. Compare that with Beyond Meat (BYND) as just a benchmark, and that company has a price-to-sales ratio of 15. Yeah, it's expensive alright!
I'm not ready to jump in before learning more about the company, but it's undoubtedly a good stock to add to your watchlist. 

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