Should I buy shares in new US stock Oatly?

first_img “This Stock Could Be Like Buying Amazon in 1997” Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Should I buy shares in new US stock Oatly? I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Enter Your Email Address Our 6 ‘Best Buys Now’ Shares Kirsteen Mackay | Wednesday, 26th May, 2021 | More on: OTLY Simply click below to discover how you can take advantage of this. Image source: Getty Images Oatly (NASDAQ: OTLY), a plant-based milk specialist, launched on the NASDAQ last week via an initial public offering (IPO). It listed at around $17 a share, with a valuation of $10bn. On the day, the Oatly share price rose above $22, valuing it above $13bn (£9.2bn), but it has since settled back at around $20.Why is oat milk popular?Plant-based foods and drinks are hot properties as individuals commit to making lifestyle changes in a bid to ‘save the planet’. Oat milk scores highly here. It’s apparently slightly better for the environment than almond milk and it uses much less water than other plant-based milks. It also produces less CO2 than cow’s milk. Plus oats require 80% less land to grow than dairy milk needs in the process of raising cows.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But it’s not only environmental reasons driving oat milk popularity higher. More people are choosing dairy-free diets for health reasons too.Last year in the US, oat milk sales soared 400% to $213m. And many big names are boosting the trend. Oprah Winfrey, Howard Schultz, Jay-Z and Natalie Portman all backed the Oatly deal.Such a pronounced celebrity backing shouldn’t be underestimated. Oprah, Jay-Z and Schultz are all successful investors in their own right and are unlikely to want to risk their reputations on a gimmick. They also have big platforms from which to sing its praises.Oatly has also struck impressive partnerships with Starbucks and Alibaba.From Sweden to New YorkDespite listing in New York, Oatly is based in Sweden. It’s believed to have chosen the US because of its soaring consumption of plant-based and non-dairy foods. Of course, New York listings tend to be higher-profile too. The company has long been ahead of the game as it launched in Sweden in the 1990s. But its popularity soared after debuting in the US in 2016. It now makes yogurt and ice cream too.The company intends to use the proceeds from its IPO to expand its production facilities. This includes a large UK factory where it also sees a clear growth opportunity. This factory will have the capacity to produce 300m litres of oat milk annually and will create more than 200 jobs.Shareholder risksBut the future may not be all rosy. Competition from big food manufacturers and supermarkets is intensifying. And while Oatly has made heavy investments in its expansion and marketing initiatives, it’s losing money. Despite being established for 25 years it’s still unprofitable.Although I like the product, I do wonder if it’s cashing in on a fad. My concern is that oat milk may well go out of favour as quickly as it arrived.Personally, I think a $10bn plus market cap is very high. I can make oat milk cheaply at home in a blender and Oatly cartons are expensive. Nevertheless, I do occasionally buy it and so do an increasing number of shoppers. But for now, I’m quite happy to watch its progress from the sidelines.I think Oatly is far from a bargain share and I’m not tempted to add it to my Stocks and Shares ISA just yet. For regular stock market investing ideas and help choosing the best shares to buy now, sign up to The Motley Fool today. See all posts by Kirsteen Mackaylast_img read more