Fake Meat ➡️ Real Profits
In IPO news, high-priced exercise bike and treadmill maker Peloton filed confidentially to go public earlier this week.
Can Pelton generate enough buzz to deliver lightning-fast gains like veggie burger upstart Beyond Meat Inc. (NASDAQ:BYND)?
It’s possible — but the numbers aren’t in its favor.
“So far this year, there have been 73 IPOs, including hot household names like Uber, Pinterest, and Beyond Meat, the explosive food science stock that’s charged triple digits since going public,” our stat man Jonas Elmerraji notes. “Even though it’s been one of the best market environments in history, the median IPO return this year is just 1.74%.”
Hopefully, that answers all yours question about going all-in on the company churning out $2,000 exercise bikes.
“For every Beyond Meat, there are lots of duds,” Jonas concludes. “The only way to tell which you’re getting is to wait for shares to establish some semblance of a trading history before getting in.”
Speaking of fake-meat IPOs, Beyond Meat reported earnings for the first time as a public company last night and the stock is soaring.
“Sales growth was driven by higher demand for the Beyond Burger and an increase in the number of retailers and restaurants that sell Beyond Meat’s products, which include meatless sausage and beef crumbles,” CNN reports.
BYND is living up to its reputation as a fast-moving growth stock, posting sales of more than $40 million during the first quarter. That’s an increase of more than 200% over Q1 2018 results.
Of course, the Street is loving this report. BYND stock us up as much as 25% in extended trade. Shares will open in the $120 range if this gap holds. To put this move in perspective, the stock closed out its first ever day of trading on May 2 at a price of $65.75.
Instead of taking a flyer on red-hot Beyond Meat shares, let’s make a more, let’s say, contrarian bet on the American carnivore.
I know it’s tempting to chase BYND after last night’s bang-up earnings report. But there are other trades out there that don’t require you to chase after a stock that’s up 5x from its IPO price.
Check out this Shake Shack Inc. (NYSE:SHAK) chart:
Shake Shack isn’t the first play that comes to mind when you mention the plant-based meat craze that’s sweeping the country. For starters, Shake Shack chains sell real burgers made from beef, which hungry carnivores apparently still wait in long lines to buy and consume. Wall Street and Silicon Valley might have gone vegetarian — but the average American is still eating more than his fair share of meat.
Turning back to the chart, you can see how SHAK perfectly hugged its 50-day moving average during May’s broad market pullback. Following a constructive week of trading, the stock just closed at one-month highs and appears poised for a run-in with the $63 level that gave it so much trouble back in early May.
Finally, the market just handed us the perfect opportunity to cash in one of our short-term trades for gains approaching 25%.
Snap Inc. (NYSE:SNAP) jumped out of the blocks following our Monday morning buy — and shares haven’t looked back once.
The stock jumped almost 7% yesterday after an unexpected analyst upgrade hit the wire. Pivotal Research slapped a $17 price target on SNAP (shares are trading below $14 even after this week’s bounce) claiming it sees “increasing signs of momentum in the business.”
I don’t know about momentum in Snap Inc.’s business per se, but we’re certainly experiencing some serious momentum in SNAP shares this week. Let’s use this opportunity to take some money off the table.
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