Beyond Meat (BYND) Just Had the Best IPO of 2019


Apparently, the veggie burger boom is upon us.

In May, Beyond Meat (BYND) exploded out of the gate with the best IPO of 2019.  In fact, the maker of vegan beef rocketed as much as 192% on its first day.  And now, shares which opened for trading at $46 are now up to $85 a share.

However, this may just be the start of a much bigger run.

Analysts at Bernstein for example just initiated the stock with an Overweight rating, and noted that the alternative meat market could be worth more than $40.5 billion within a decade.

“While Beyond Meat is unprofitable today, we expect the profitability trend to improve in the next 3-5 years as the company gains scale, brings more production in-house, and reaches a more normalized level of R&D and marketing spending,” they wrote, as quoted by Barron’s.

Analysts at Research and Markets expects the market to increase from $4.6 billion to $6.4 billion by 2023. However, according to Beyond Meat that number could rocket to $35 billion in the U.S.

Plus, there’s no shortage of consumer interest.  Grocery sales of meat alternatives were up nearly 20% to $878 million for the year ended January 5, 2019, according to Fortune.

Veggie Burger Mania Hits Corporate America 

With sizable popularity of meat alternatives, Tyson Foods just confirmed it will introduce a meatless product in coming months.  McDonald’s just began selling its veggie burgers in Germany.  And Burger King just said it’s Impossible Whopper would go on sale this year.

By July 2019, Whole Foods will start selling a burger made by Lightlife, as well.

All as the public just begins to change their tastes, and begin to eat less meat.

Plus, many companies are just beginning to notice there’s a shortage of veggie burgers to satisfy consumers at the moment.  Big food companies are “setting up investment arms and emerging company areas, but it’s too little, too late, and they’re still trying to catch up with the curve,” said Lou Biscotti, national food practice leader for Marcum LLP, as quoted by Bloomberg.

Not Yet Profitable But… 

While it’s not yet profitable, it’s grown in revenue nicely.  In the first nine months of 2018 for example, it generated revenue of $56.4 million, more than double the $21.1 million posted in the year-earlier period, and more than the $32.6 million posted for all of 2017.

That’s growth smart investors cannot ignore.

There are two ways to trade BYND.

One is to buy the BYND stock and let it run long-term.  The other way is to again buy the First Trust U.S. Equity Opportunities ETF (FPX).

Here’s what we still hold, long-term:

Disney (DIS) July 19, 2019 130 put – $2.65

Hold, as the stock begins to pull back.

Merck (MRK) stock – $76.75

MRK July 19, 2019 77.50 calls – $2.40 – exited half

MRK now trades at $78.72 and remains on hold along with the calls.

Pfizer (PFE) stock – $39.92

PFE September 20, 2019 40 calls — $1.55 – exiting half today

PFE now trades at $41.47 an remains on hold, along with the calls.

Devon Energy (DVN) stock – $32.93

DVN July 19, 2019 33 calls – $2.55

DVN now trades at $30.61 and remains on hold.

Aerojet Rocketdyne Holdings (AJRD) – $34.52

We have a near-term price target of $40.  It last traded at $36.42.

Coca-Cola (KO) stock – $44.96

KO pushed higher to $49.20.  Hold.

iPath S&P 500 VIX Short-Term Futures (VXX) — $42.80

VXX now trades at $28.52.  Hold.

New Age Beverage (NBEV) — $6.76

We have a near-term target of $10.  It last traded at $5.20 a share.  Hold.

Ceragon Networks (CRNT) – $3.90

Boingo Wireless (WIFI) – $32.04

Zayo Group (ZAYO) — $34.42

All are long-term holds as the 5G revolution just begins to pick up momentum.  CRNT now traded at $2.82. WIFI is now at $21.18.  ZAYO now trades at $32.70.  Hold all.

Kroger (KR) stock – $29.75

KR last traded at $24.22.  We have a $35 price target, near-term.

Electronic Arts (EA) stock – $114.40

Hold the stock.  It’s pushing higher, last trading at $97.26.

Six Flags Entertainment (SIX) — $66.25

SIX last traded at $52.80 and remains on hold.

CoreCivic (CXW) stock – $25.25

The GEO Group (GEO) stock – $25.32

CXW is now trading at $22.08. GEO is now up to $21.42.

ETFMG Alternative Harvest ETF (MJ) — $32.30 – exited half

Kush Bottles (KSHB) — $7.85

MedMen Enterprises (MMNFF) — $4.30
Canopy Growth (CGC) — $51.55

Marijuana stocks are benefiting from further from U.S. approval across the country, Canadian approval on October 18, 2018, and corporate interest in marijuana stocks, as we’ve seen recently.

Pro Shares Ultra Short S&P 500 (SDS) — $45.15

This remains a hedge against the long positions.  It’s now at $32.67.


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