Vita Coco Company, Inc. COCO

Vita Coco Company has delivered a strong share price run in recent years, which naturally puts its current US$57.98 level under the microscope. The question now is whether that price can be explained by the cash flows the business is expected to generate. Over the past 3 years the stock has returned 123.5%, which makes it important to ask how much of that rise is supported by the underlying cash flow profile. The group’s ability to turn revenue into steady operating cash and to fund growth...

Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.