Rollercoasters, helter-skelters and piggy-backs

By Frank Buhagiar on Monday 20 February 2023

Rollercoasters, helter-skelters and piggy-backs
Image source: Rollercoasters, helter-skelters and piggy-backs

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

February is proving to be something of a rollercoaster ride for FFF’s listed FoodTech space.  The sector started the month where it left off in January with an ‘Up’ week (more share price risers than fallers), only to follow that up with a ‘Downer’ (more fallers than risers).   As for week three? Well…it was a case of onwards and upwards with 29 risers, 18 fallers and two non-movers.  Once again, FoodTech moved in lockstep with the Nasdaq – the index finished the week up 0.5%.  The question is: what will the fourth week of the month bring?  A ‘Down’ to complete the helter-skelter or an ‘Up’ to make it a second positive month in a row for listed FoodTech? Watch this space.

Top of the tree this week was online grocery retailer/platform Boxed (BOXD) which tacked on 16% to finish the week at US$0.59.  The shares have now more than trebled since the early January launch of “a process to explore strategic alternatives, including, among other alternatives, a possible sale of the Company”.  And it appears the strategic review explains this latest rise in the share price - the title of Seeking Alpha’s article, “Boxed jumps on report of talks with two suitors on potential sale”, says it all.  Perhaps more companies should launch strategic reviews.

Good week for indoor ag/cannabis solutions specialists Hydrofarm (HYFM) up 15%; urban-gro (UGRO) up 6%; and Agrify (AGFY) up 5%.  No news out from, or strategic reviews launched by, any of the above.  So, put the across-the-board gains down to yet more talk about the legalisation of cannabis then?  Forbes did cover the subject in “Texas Bill Would Allow Local Marijuana Legalization”, after all.  Enough to spark a sector-wide rally?  Not convinced.  Trading volumes for all three were thin on the ground so wouldn’t take much buying to trigger share price gains.  Nothing else to do but adopt a wait-and-see approach – wait to see if any news/strategic reviews pop out in the coming weeks that explain the gains. If none, then perhaps the sector was just piggy-backing off positive markets…rising tides and all that.

Spoilt for choice, when it comes to discussing Beyond Meat’s (BYND) 11% share price gain.  First up, vegconomist reported “McDonald’s announces it is launching its first-ever plant-based McNuggets, made in partnership with Beyond Meat (Nasdaq: BYND) in 1,400 restaurants across Germany.  Beginning Feb. 22, German customers can order the new McNuggets along with Beyond’s McPlant burger, which the chain is also adding to the country’s menu.”

Then there was Motley Fool's article: “Stock Market Sell-Off: Is Beyond Meat a Buy?”. Still too many ifs and buts for the Motley Fool – the article concludes by advising “Watch Beyond Meat from the sidelines instead -- at least until the company shows that it can generate sustainable profits.”  No competition, the McDonalds news trumps the Motley Fool’s ‘jury’s out’ piece.  But compare the Motley Fool’s most recent conclusion with what they were saying back in December 2022: “While Beyond Meat's massive declines may make it look cheap on the surface, it actually isn't…Investors should avoid the shares because of the risk of continued downside over the long term.”  A step in the right direction at least.  All eyes on next week’s earnings report (and those plant-based McNuggets in Germany).

Among the fallers, Kalera (KAL) gave up most of the gains made following the sale of its international business to Dutch indoor agriculture company Growy.  As reported in last week’s Food on the Move, the sale saw the shares rally from US$5.97 to US$7.9. After this week’s fall, however, the shares are now back in the US$5.90s. The title of last week’s Food on the Move springs to mind: “Nothing goes up in a straight line”, particularly rollercoasters.