Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers.
Finally, a positive week! Okay, at 25, the number of stocks in FFF’s listed FoodTech space that finished the week ended 7 October in positive territory may have only edged past the 24 fallers by the smallest of margins but, hey, a win is a win. As it has been almost a month since the last positive week, at least in terms of more risers than fallers, it’s time to bring out the bunting, pop the corks and celebrate - it has been a while.
Boasting a 26% gain, top spot goes to Urban-gro (UGRO). Wasn’t that long ago when Food on the Move was reporting shares in the solutions provider to the Controlled Environment Agriculture (CEA) and cannabis industries were “down a third at US$4.22 after its Q2 numbers fell short of expectations”. That was 22 August. By Friday 7 October, the shares were changing hands at around the US$3.5 level. Only news out during the week was UGRO’s participation in no fewer than five conferences in the month of October alone. Talk about doing the rounds!
Interestingly, fellow CEA specialist Hydrofarm (HYFM) wasn’t far behind with a 20+% rise of its own – shares closed at US$2.34. No material announcement from HYFM either. Something going on at the sector level? Well maybe and it could all be down to the US President. Biden’s federal pardons for marijuana possession appears to have got the market excited about possible future moves to legalise cannabis. Legalisation would, presumably, be good news for business at HYFM and UGRO. Cue strong share price gains, although there’s still a long way to go before both stocks regain recent highs.
All good theories have to be tested and the idea that talk of possible cannabis legalisation might be behind HYFM and UGRO’s strong gains is no different. Helpfully, the weekly share price performance of Agrify (AGFY), another cannabis solutions provider, provides a readymade test – a third strong gain and surely theory proved? In the event, AGFY posted a relatively meagre, nothing to write home about gain of 1.6%. Theory debunked, back to the drawing board. Not so fast. On 6 October, AGFY announced it had been hit by a lawsuit from customer Bud & Mary’s Cultivation, Inc. Unsurprisingly, the share price didn’t react well - between 6 and 7 October, the shares dropped from US$0.54 to US$0.442. AGFY’s share price had a company-specific issue to deal with. The legalisation theory not totally gone to pot then…
Finally, what a difference a week makes. Seven days ago in Food on the Move: 17:33, Blue Apron (APRN) topped the risers’ chart. One week on and the meal kit co was the biggest faller with the shares dropping 55% to US$2.55 after APRN announced it had successfully raised US$15million. CEO Linda Findley said: "We are pleased to have successfully completed this at-the-market equity offering program which provides us with additional capital to move the business forward." The shares had been on a tear in recent weeks, having more than doubled over the summer months, so perhaps with hindsight, a raise was always on the cards.
With that in mind, it might be worth keeping a beady eye out on any other stocks out there that have been on a good run recently…