Half-time whistle

By Frank Buhagiar on Monday 3 July 2023

Half-time whistle
Image source: Half-time whistle
CommentaryFoodTech Investment

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

Week ended 30 June 2023 saw 19 share price risers in FFF’s listed FoodTech space. That’s four more than last week’s 15.  A 25%(ish) increase cause for cheer.  Not enough though to prevent a third consecutive week in which share price fallers have outnumbered risers – 28 fallers and one non-mover. No cause for cheer there. Moving swiftly on, the passing of 30 June does mean the year has reached the half-year stage.  Time for a quick half-term report…

Strong start to the year.  Four of the first five weeks saw more share price risers than fallers.  And even then, the odd one out ended up Honours even. Looking good for the rest of the year then, if the old adage “so goes January so goes the year” worked its magic.  How it was looking all so rosy.  But as Dr Samuel Johnson said: “Expectations improperly indulged must end in disappointment” and so it has proved.  From week six onwards, fallers outnumbered risers week after week after week.  Between early February and end of June, risers only gained the upper hand over fallers on just four occasions.  Or to put it another way, 16 of the remaining 20 full weeks of the half-year period turned out to be ‘downs’ – share price fallers outnumbering risers.

Final half-year tally? 8 ‘up’ weeks; 16 ‘down’ weeks; 1 score draw. Headmaster’s comment: shows glimpses of potential; could do better; room for improvement.

Online delivery is one area of listed FoodTech that has been doing better lately: DoorDash (+5.2%); Grab (+7.19%); Delivery Hero (+16.39%); Ocado (+5.65%); HelloFresh (+10.14%); Just Eat Takeaway (+12.86%); Deliveroo (+8.84%) – all posting gains for the week ended 30 June 2023. Not much in the way of eye-catching news.  Sector still basking in the afterglow of those Amazon/Ocado tie-up rumours?

Elsewhere, Verde Agritech shares were up a quarter, closing at CAD2.61 a pop. The potash fertiliser co. benefiting from a positive write-up by Simply Wall Street in “Why We Like The Returns At Verde AgriTech (TSE:NPK)”. The article focuses on Return On Capital Employed (ROCE), “the 'return' (pre-tax profit) a company generates from capital employed in its business…Verde AgriTech has an ROCE of 27%. That's a fantastic return and not only that, it outpaces the average of 15% earned by companies in a similar industry…The fact that Verde AgriTech is now generating some pre-tax profits from its prior investments is very encouraging. The company was generating losses five years ago, but now it's earning 27% which is a sight for sore eyes.”

Simply Wall Street concludes: “Overall, Verde AgriTech gets a big tick from us thanks in most part to the fact that it is now profitable and is reinvesting in its business. And a remarkable 191% total return over the last five years tells us that investors are expecting more good things to come in the future. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.” Decent report card there: keep up the hard work.

Similar gain for Benson Hill. Shares tacked on 21.5% to finish the week at US$1.30.  Only piece of news was the publication of the plant biology/genetics FoodTech’s “Second Annual ESG Report Highlights Technology Innovation and Strategic Partnerships to Modernize Food Production”. Perhaps the company should consider releasing ESG Reports more often…

Finally, recent reverse stock-splitters Blue Apron (-8.46%) and Cibus (-21.64%) continued their post-split slides. Meal kit co. Blue Apron shares finished the week at US$5.84, a long way off the US$8.95 they traded at following the split in early June.  AgTech CBUS has fared even worse – shares closed at US$10.5 having been as high as US$26.95 immediately after the split in late May.  Both in the “room for improvement” category it would seem…