Food on the move: return of the risers

By Frank Buhagiar on Monday 12 September 2022

Food on the move: return of the risers
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CommentaryFoodTech Investment

FFF’s weekly roundup of listed FoodTech’s movers & shakers

What a difference a week makes.  Rewind back seven days and fallers in the listed FoodTech space outnumbered risers by more than four to one.  Fast forward a week and, while not a complete turnaround, the 28 risers beat the 18 fallers with room to spare.

Top performer, with a 24% gain was Blue Apron (APRN).  It’s been a good month for the meal kit company – back on 9 August the shares were languishing at US$3.07.  Now they are exchanging hands at the US$7 level.  The strong run appears to have been triggered by talk of a short squeeze – shorters scrambling to buy stock to close out positions. There was a further boost from the news that the terms for its US$30m Senior Secured Notes had been amended to provide “optionality to use up to $25.0 million of cash for potential future share repurchases.”  As for last week, it was reported lobster was no longer on the company’s menu after a conservation group highlighted how fishing techniques were endangering North Atlantic right whales. A short squeeze, potential share repurchases, saving whales (and lobsters) – a recipe for a doubling in the share price it seems.

Quite a turnaround for Zevia (ZVIA), the zero sugar drinks company.  The share price popped 23% higher to close at US$4.94 on 9 September. The shares had dropped by a quarter the week before which had put an abrupt end to a strong run that had been prompted by better-than-expected Q2 results.  No new news - simply a case of buyers dipping their toes back in?     

Online food delivery firms had a good week too with DoorDash (DASH) up 10%, Delivery Hero (DHER) up 18%, Deliveroo (ROO) up 10%, Just Eat Takeaway (TKWY) up 6% and Ocado (OCDO) chipping in with a 7.5% gain.  Not much in the way of company announcements, but Ocado Retail, Ocado’s joint venture with Marks & Spencer is due to release results for the three months to August.  After a tough period for the sector, all eyes will be on the online grocer to see if it can deliver.

Among the fallers, Verde Agritech (NPK) lost further ground. The potash fertiliser company said its 2022 results will be impacted by “unforeseen groundwater issues” that will limit delivery of Verde’s multi-nutrient potassium product from its second plant in Brazil.  No doubt about the market’s verdict on the announcement – the shares fell 19% to CAD5.7.

Finally, Burcon Nutrascience (BU) shares reacted badly to the news that its auditor, PricewaterhouseCoopers, had resigned with immediate effect.  The developer of plant-based proteins for food and beverages also postponed its AGM.  According to the press release: “PwC has confirmed that there have been no ‘reportable events’, ‘disagreements’ or ‘unresolved issues’”.  Judging by the 17% fall in the share price to CAD0.59, it seems the market adopted a sell first, ask questions later policy.