This is likely to be an industry of the future
If you don’t have long-term investments in this industry yet, you may want to dig deeper. The industry I’m talking about is the plant food sector which, according to Credit Suisse, will increase by 100% by 2050, becoming a $ 1.4 trillion market.
A simple Google Trends search also confirms this trend with topic searches. “Veganism“They have jumped into the sky in the last ten years, reaching their peak just before the start of the pandemic. This look is to be expected, as the pandemic forced people to refocus on the essentials in the short term, but one could expect that as soon as things stabilize, this industry will continue its impressive growth.
Ideally, as an investor, you would like to position yourself well ahead of the next strong bullish move in this industry.
There are factors that fuel the projected and projected growth of this industry, but two of the main driving factors are sustainability and health benefits.
Just by looking at the sustainability aspect, current food production and consumption contribute to 90% of global freshwater consumption and 20% of global greenhouse gas emissions.
According to Credit Suisse research, a global shift towards a more plant-based diet is inevitable if the world’s food production is to be more sustainable.
One of the leading companies in this movement is Beyond Meat, founded in 2009, which focuses on producing realistic meat-like products that use only plant-based ingredients.
A bump on the road
Despite the long-term positive outlook for the industry, not everything is rosy. Catering and catering companies were very successful during the pandemic due to the imposed blockades that naturally leave a strong mark on the sales of companies like Beyond Meat (NASDAQ: BYND).
The company began reporting net profits in a few quarters in 2020, but despite continually launching new products such as vegetarian breakfast sausages, ground beef and meatballs, the company is once again reporting quarterly net losses, probably due to of the impact of the pandemic.
Despite this ‘hit the road‘, we believe that the stock of the company’s shares and prices are currently trading at attractive levels for possible long-term investments.
In early May, stocks fell more than 20%, below a key technical support area, only to invest sharply towards the end of the same month, creating a false breakout. This false break is a clear signal that the market thinks the stock price was too cheap below $ 110.
During the seven weeks following the strong bullish momentum that pushed the price up to $ 150, sellers have only been able to reverse about 50% of the move, which clearly indicates an imbalance on the buying side in the order flow.
Therefore, we believe that there is a high probability that buyers will be able to intervene and defend more the most important ones in the assistance area, which makes it a good location to look for possible entry locations in our opinion.
Positioning of options
As for the options market and the position of options traders, there are approximately 180,000 calls and more than 260,000 calls, so the market gets heavy. Approximately 28% of the options will be launched this Friday, so I expect a stock price pullback that could provide a solid buying opportunity in the support area mentioned above.
In the long run, the structure of options is favorable for traders who trade at prices just below, which makes it a long-term investment to consider.
THE FULL REVELATION: Chris Capre currently has no stock or options position on BYND, but has pending purchase limit orders on ETSY. If you want more information Chris’s trades/ positions, you can access through Negotiation masterclass where he shares his live business, additional investment ideas and daily market analysis.
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