With a number of changing trends in the food industry, we investigate these five top food stocks to see if they are a good investment.
Aug. 31, 2021
The pandemic popularized bizarre food challenges and millions of people all around the world took solace in it. Here are a few food stocks that might whet your appetite.
1. Beyond Meat
Beyond Meat (NASDAQ: BYND) capitalizes on the vegan market as an early participant in the vegan revolution. The Los Angeles-based company produces meatless burgers, sausages, and other plant-based products. It has great brand awareness, robust production capabilities, and ubiquitous fast-food distribution, which has propelled it to have a leading position in the market.
According to the company’s recent Q2 report, net revenues climbed 32% year-over-year (YoY) to $149.4 million, while its foodservice channel net revenues increased by 218%. The company made $47.4 million in gross profit and is currently considering expanding into international markets by increasing production capacity in the EU and China.
Despite the fact that everything looks to be going well, the company did incur a net loss of $19.7 million, or $0.31 per share, as well as a disruption in demand patterns due to the recent spike in COVID-19 cases.
2. Tattooed Chef
Tattooed Chef (NYSE: TTCF) is a major plant-based food brand that sells ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, and cauliflower pizza crust in the frozen food department. The company made a bold move by going public through a special purpose acquisition company (SPAC) in late 2020, signaling optimism for investors in vegan equities.
The company announced its financial results for the end of three months on June 30, 2021, which showed $50.7 million in revenue, a 45.9% increase on the $34.8 million in the year-ago period. Tattooed Chef branded product revenue was $33.1 million, an increase of 62.3% on $20.4 million in the prior-year period.
The company faced disappointment when its stock price dropped over 10% after it reported its second-quarter 2021 earnings in early August.
Despite this, the company is optimistic about its future expansion, thanks to the addition of additional manufacturing capacities for Mexican culinary products, meat substitutes, and alternative tortillas. The company’s goal for next year is to go beyond the frozen aisle and into the refrigerator.
3. Jack in the Box
The well-known, San Diego-based restaurant chain operates and franchises the nation’s largest hamburger chain, Jack in the Box (NASDAQ: JACK). They own more than 2,200 restaurants across the U.S. in 21 states, and in Guam.
At the start of July, the company released financial results for the third quarter, consisting of growth in systemwide sales, system same-store sales, and earnings per share. Total revenues increased by 11.2% to $269.5 million. The net earnings increased to $40 million, or $1.79 per share, compared with $32.6 million, or $1.40 per share, a year ago.
The company took over the units in Oregon to improve and grow the operations, returning them to franchise operators as part of a strategy to “take in and restore” units with the potential for a turnaround.
However, in the third quarter, there was a net store decline of nine stores, comprising four store openings and 13 closures.
The company also launched a new Jack Pack loyalty program this year offering rewards that have helped improve the digital ordering experience. Digital ordering has grown 30% for the chain this year alone.
4. The Very Good Food Company
Relatively unknown, a Canadian-based company is giving some tough competition to Beyond Meat and Tattooed Chef since the customers seem to love the texture and taste of their plant-based products.
The Very Good Food Company (CVE: VERY) released its reports and we can see a good deal of growth. In Q2 2021, revenue increased from $1,087,790 in Q2 2020 to $2,780,681 by 156 percent. Sales of eCommerce rose from $846,134 in the second quarter of 2020 to 2206,403 in Q2 2021 by 161%.
Today, the company is not just growing on shelves but also increasing its production and distribution value. The company has leased two new production facilities in Vancouver and California.
Since the Very Good Food Company became public in March of this year, its stock has fallen by over 45%, which might concern shareholders. But overall growth of the company in recent months is a very positive graph.
5. Uber Eats
Uber Eats is an online food ordering and delivery platform launched by Uber (NYSE: UBER) in 2014, which operates in 32 countries across the globe.
Uber as a whole is very diverse. Last year, the company was hit badly by the pandemic, but also saw a rise in its Uber Eats services.
Recently, Uber has partnered with various grocery outlets, which should further help to increase profits for the company. New Verticals, which includes Uber’s non-restaurant delivery offerings (grocery, convenience, alcohol, and others), gained further traction in expansion markets like the U.S. and U.K.
From Uber’s recent earnings call:
“Uber was proud to continue supporting small restaurants through a partnership with the Local Initiative Support Corporation (LISC), in which we distributed $4.5 million to 900 local restaurants across the country.”
Food stocks are great investments, but there are plenty of other great opportunities in MyWallSt’s shortlist of market-beating stocks. Access them by starting your free access today.