Popularity is increasing: Beyond Meat & Co .: Jim Cramer Recommends Investors to Jump on the Meat Replacement Trend | message
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• Beyond Meat surprises with black numbers
• Meat substitute manufacturers could benefit from the corona crisis
• Jim Cramer advises getting on the train
Last week meat substitute producer Beyond Meat released its figures for the previous quarter. In the CNBC program “Squawk on the Street” Jim Cramer then explained why he believes investors should jump on the meat replacement trend.
Beyond Meat makes a profit
On May 5, Beyond Meat released its first quarter results after the exchange. The meat substitute maker grew rapidly, increasing sales 141 percent year over year to $ 97.1 million. After posting a loss in Q1 2019, the company posted a profit of $ 1.8 million in the first quarter of 2020. Beyond Meat was a positive surprise with this result – analysts did not expect the company to make the leap into the black and the sales estimates were also below the actual result.
The Beyond Meat share also benefited from this positive surprise, shooting up more than a quarter, namely 26.01 percent, to $ 126.21 in Nasdaq trading the next day.
The Beyond Meat share: Successful but volatile
Beyond Meat was founded in 2009 and ten years later, last year, ventured onto the trading floor. Since then, Beyond Meat has been “one of Wall Street’s hottest stocks at times, with a market value of $ 7.2 billion, but also one of the most volatile since going public in May 2019,” CNBC reports. From its issue price of $ 25, it climbed to nearly $ 240 in summer 2019, but then fell almost 70 percent by the end of the year. The stock then fluctuated in a range between $ 70 and $ 80 until the beginning of 2020 before it could gain anything again. The big corona crash then went down again in the spring. In the meantime, the share certificates have recovered again and are now trading at around $ 130 (as of May 11, 2020).
Can the meat replacement industry benefit from Corona?
While Jim Cramer explains that Beyond Meat’s $ 97.1 million in revenue is still fairly small, it doesn’t mean anything in his opinion: “It starts like this. It doesn’t start with a billion dollars. This is not a blockbuster- Drug, but watch this trend, “explains the host of” Mad Money “.
Cramer reported that recent developments in the USfood industry, such as virus outbreaks in meat packaging plants, which have sometimes slowed down or temporarily closed production, would have raised food supply concerns. “I think there are people who are horrified by what happened to the meat packers. … I think these stories don’t necessarily make them vegetarian, they think twice about beef,” explains Cramer. So far, meat alternatives to plants have generally been more expensive than meat, but the coronavirus pandemic means that rising beef costs offer an opportunity for alternative producers.
Large corporations have also recognized the potential of meat substitutes. For example, Nestlé entered the vegetable burger market, various fast food chains offer the burger and competitor Impossible Foods also works with well-known partners such as Kroger.
Hence Cramer’s conclusion: “This movement happens. You have to jump on the train or … stay behind.”
Editorial office Forex-news.com.net
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