Beyond Meat is an obvious choice. For mainstream consumers, the Los Angeles-based brand is synonymous with plant-based meat alternatives. For investors, on the other hand, it’s synonymous with “bubble stock.”
After tripling in value during the pandemic, Beyond Meat stock has lost about 75% of its market value in the last 12 months.
In its most recent quarter, sales declined 23% while profit margins remained negative. The company’s future depends on whether it can turn things around and boost sales in 2023.
Now, the stock trades at a price-to-sales (P/S) ratio of 2.3, which is in line with the S&P 500’s average P/S ratio of 2.42. Put simply, this is a risky bet for any investor willing to take a contrarian approach.
Arkansas-based Tyson Foods (NYSE:TSN) is on the other end of the spectrum from Beyond Meat. It’s an 88-year old meat producer with significant market share across North America and the rest of the world. The company has tried to enter the fake meat market multiple times, most recently in 2021.
However, sales in the company’s “processed food” segment, which includes fake meat, has been relatively flat in recent quarters. Fake meat and vegan alternatives remain a small fraction of Tyson’s overall sales.
Tyson could be an ideal pick for conservative investors. The company is poised for robust and steady growth as traditional meat remains in demand. But if Bill Gates is right and fake meat sales skyrocket, Tyson won’t be left out of the market shift.
Put simply, it’s a safe bet.
Ingredion Incorporated (NYSE: INGR) rarely gets mentioned but it’s a key player in this sector. The Winchester-based company supplies raw material to the world’s biggest food producers, including the pea-based proteins used by fake meat producers across the world.
Sales surged 15% in the most recent quarter, while net profit soared 17%. The stock trades at a price-to-earnings ratio of 15.4. It’s an undervalued bet on the innovation in the global food industry, not just fake meats.
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