Counting swallows

By Frank Buhagiar on Monday 24 July 2023

Counting swallows
Image source: Counting swallows
CommentaryFoodTech Investment

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

Last week’s Food on the Move “FINALLY” asked the question would “the week ended 14 July 2023 prove to be a one-off or the start of a prolonged run for the risers?” We have an answer…of sorts: not ‘the start of a prolonged run for the risers’. Week ended 21 July 2023 saw 24 share price fallers in FFF’s listed FoodTech space, three more than the 21 risers (there were three non-movers). Why the “an answer…of sorts” then?  A bigger sample required before the week ended 14 July 2023 can be classified as a one-off. After all, “One swallow does not a summer make.” Rest assured, will keep looking out for those swallows…

Among the risers, Olo stands out with a 15.2% gain – shares closed at $7.2.  Only one announcement put out by the restaurant tech – “OLO ANNOUNCES DATE OF SECOND QUARTER FISCAL YEAR 2023 EARNINGS CALL”. For the record, the date is 1 August.  Certainly, not a shoot the lights out announcement and surely not worth a 15.2% share price rise. Interestingly, shares shed 12% back in May when Olo announced the release date for its Q1 earnings. What’s different this time? A broker upgrade that’s what.

In “Here's Why Olo Stock Beat the Market This Week”, Motley Fool reported that “Shares of restaurant technology company Olo…got a boost this week after an analyst positively changed his rating on the stock…Brent Bracelin is an analyst with Piper Sandler and has covered Olo stock for some time. In August, he lowered his rating from buy to hold and lowered his price target to $9 per share. However, Bracelin upgraded Olo stock yesterday to an ‘overweight’ rating from a ‘neutral’ rating…Meanwhile, he kept his price target of $9 per share. But that represents roughly 25% upside from where the stock trades now.” 25% upside - nothing a decent set of Q2 numbers couldn’t trigger. Olo, one to keep an eye on come 1 August.

Another week, another note put out by research outfit Zacks Equity Research.  Last week Food on the Move covered plant-based foodie Laird Superfood (LSF) being added to Zacks Strong Buy List.  This week, the Zacks Small Cap Research team homed in on cultivated meat specialist Steakholder Foods (STKH).

As reported by Yahoo Finance, Zacks had this to say in its write-up: “On May 25th, 2023 Steakholder Foods (NASDAQ:STKH) announced that it has refocused its business model to target B2B meat manufacturers and cultivated meat producers. The company plans to offer these food companies the technical ability to produce a cultivated meat product that aims to closely mimic the taste, texture, and appearance of traditional meat. The company intends to monetize its 3D printers and bio-inks that are needed to support printer operations by selling these products to cultivated meat producers…The company is not abandoning its original goal of producing cultivated meat products themselves for distribution to various food related outlets. However, this is not the primary business focus at this time.”

Zacks concludes: “We are maintaining our current EPS estimates and our price target of $5.00 per share at this time.” As with LSF a week earlier, STKH shares reacted well to the Zacks coverage, finishing the week up 10% at US$0.84.  Two out of two record for Zacks then.  Hmm… wonder which stock Zacks will turn to next?

Meanwhile, over in Speculation Street, Sky News reported that Cake Box (CBOX) has been on the receiving end of a takeover approach: “Sky News has learned that The Cheesecake Shop has tabled a 160p-a-share proposal to buy the British company. City sources said the bid, which has not been publicly disclosed, was unlikely to gain support from the Cake Box board. It was unclear on Wednesday evening whether any discussions were ongoing between the two companies.”  Shares soared 21.5% to close at 178.5p, comfortably above the mooted 160p price.  160p just the opening salvo? Share price seems to think so.  Could a tasty takeover battle for the egg-free cake maker be on the cards, or should that be on the menu?

Ocado (OCDO), another stock that has been the subject of takeover speculation in recent weeks. As covered in “IS IT THE JOURNEY OR THE DESTINATION?”, Amazon was rumoured to be the suitor circling the online food delivery specialist.  A month or so on and still no bid announced.  And yet OCDO shares continue to rise - up 15.5% to 687p with most of the gains clocked up on Tuesday 18 July.

No news out during the week, or at least the working week.  For the online foodie did put out a press release…on Saturday 22 July: “AutoStore and Ocado Settle All Patent Litigation”.  Saturday, a strange day to announce, especially as under the terms of the settlement “AutoStore will pay £200 million to Ocado in installments over 2 years.” Surely, would have been a decent announcement to start the week with.  Begs the question: did word of the windfall get out, forcing OCDO to release early? Or was it a case of dates getting mixed up, wrong button pressed or some other admin error that led to the announcement going out on a Saturday?  Enough speculation for now.  Time to get back to counting those swallows…