The Ultimate Growth Stock to Buy With $1,000 Right Now

Most growth stories in consumer goods are about a brand catching fire. The one I want to share here is about a company that spent 22 years refusing to own a factory, then wrote a $175 million check for one, and made it pretty clear how confident it is about it.

Vita Coco (NASDAQ: COCO) is a coconut water business that Michael Kirban and Ira Liran co-founded in 2004. For two decades, it operated an asset-light model, meaning it designed and marketed the product but paid outside processors to actually make it. That model produces great margins and one glaring weakness: You don't control your own supply.

Now, I think the company is trying to become a growth stock and a vertically integrated company with control of its own supply chain.

Why a new deal changes what Vita Coco is

On July 22, Vita Coco acquired Copra, a producer of super-premium Thai Nam Hom coconut water, a chilled, faintly pink, sweeter variety sold in the refrigerated case rather than on the dry shelf. The purchase came with a factory in Thailand and what the company calls an extract-and-fill-on-site model, meaning the water goes from the coconut to a sealed package at one location instead of being shipped as concentrate.

Copra grew net sales at a 48% compound annual rate over three years and should clear $100 million this year, according to Food Dive and company disclosures. Here's the interesting part to me: The deal's earnout, which is the extra money a buyer pays later if the acquired business hits targets, has a floor of $45 million and a cap of $100 million, based on 2028 results. Earnouts normally start at zero.

Image source: Getty Images.

Putting a floor under the deal means Vita Coco agreed to pay tens of millions more even if Copra's business completely stalls. Buyers don't usually make that kind of commitment unless they've gotten a close look at the pipeline and believe the opportunity is worth locking up before someone else does. To me, that floor says more about the company's leaders having conviction than anything they could have said on an earnings call.

The bearish argument here might be that Vita Coco paid too much for the deal but they really only paid roughly 1.75 times what Copra expects to bring in this year, and trade publication The Deal reported the business generates about $25 million in earnings before interest, taxes, depreciation and amortization, which puts the upfront price near seven times profits. That is a reasonable price for a business growing at a 48% annual clip, according to Food Dive, and management expects the deal to improve its own profit margins once the two companies are fully combined.

The stock hasn't exactly rewarded investors over the summer, as it's down roughly 40% from its June peaks. There has also been insider selling reported. Insiders sold about 343,900 shares worth roughly $27.4 million, per MarketBeat, including a $1.25 million sale by Chief Executive Martin Roper in April. Most of those sales were made through Rule 10b5-1 plans, which are trading schedules that executives set up months in advance, so the timing is automatic rather than a reaction to news, and co-founders holding stakes this large routinely diversify. It is worth watching, but I'd note that no insider has sold since the Copra deal closed.

Overall, I view this acquisition as a meaningful vote of confidence in where Vita Coco is headed. I also like that the company continues to build additional competitive advantages rather than relying on what's worked so far.

Clever marketing and short-seller risk

Look at how this company promotes its products, and you'll notice it rarely buys expensive national advertising. This summer, it ran a misting pop-up called the Pit Stain Pit Stop across five cities, launched a limited-edition nursing bra with Fruit of the Loom for Breastfeeding Awareness Month, and released a luggage capsule with adventure brand Baboon to the Moon.

I like marketing like this, which is geared toward earning media attention. A company that grows by being talked about rather than by buying impressions keeps more of each dollar, and that habit becomes more valuable now that it has a plant to fill.

Short-seller NINGI Research alleged in 2025 that Vita Coco had misled investors about its growth and was dealing with supply chain problems. Vita Coco responded publicly in March 2025, saying the report contained "numerous inaccuracies and mischaracterizations" and pointing out it had already disclosed the private label service problems on its earnings call a month earlier, including the warning that it expected to lose business with certain retailers. Investors should weigh whether the supply problems that started all of this are now being solved by owning the factory.

Owning more of its production should help address some of the supply chain concerns, but investors still have to contend with lawsuit risk and an "unsexy investment." As mentioned, the stock has also fallen from above $80 to around $50, while management expects full-year gross margin to settle closer to 40% as tariff refunds and freight savings fade.

Still, at around $50 per share, $1,000 buys about 20 shares. I'd start there and add if the stock gets cheaper, rather than sitting on the sidelines waiting for every piece of uncertainty to disappear. To me, the bigger story is that Vita Coco is positioning itself to become a true growth stock and a more vertically integrated beverage company with stronger control over its supply chain.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.