Updated: Sep 19
IN THIS ISSUE
Beyond Meat $112.90
A company that has been in a downtrend in stock price recently. We think this is good timing to look at them. They just brought in chicken nuggets onto the market and are currently in the testing phase before they do a full commercial launch. High growth ahead for this industry and for this company.
This company uses AI to help lending companies go through the selection and risk process. This could advance further. More details below!
Beyond Meat: BYND
It’s controversial, we know. Would you go all plant based meat? Some may opt out of plant based meat but we think that eventually more and more people will go to the grocery store and buy plant based meat because of its lowering prices and health benefits that are starting to stack up.
Beyond meat has introduced chicken nuggets in August and we think that this could eventually help expand their business valuation by double and they could become one of the worlds biggest meat substitute providers. They are approaching the same cost per pound of meat as they are growing. This creates margin and allows for more consumer uptake.
This company IPO’d in 2019
Their share price started at $25 @ IPO and to a high of 234 before coming back down.
Beef market cap in 2020, (total global valuation) was 838 billion , in comparison Beyond meats current market valuation is 7.8 billion.This is just for beef!
Chicken total global market cap in 2020, was $347 Billion. We think that with chicken now being in play, this will be extra advertising and another avenue for them to continue to capture market share.
We also believe that they will begin to lower the price of their goods as they get better at producing it.
We think they have many benefits to our world as plant based meat takes less energy to produce per pound and also reduces greenhouse gases.
They also contain plant material vs red meat which could also be a potential health benefit / selling point (We haven’t done enough research on this point but think that it will be something the company uses to leverage their position against real meat) . One con for health that we found is that generally plant based meat has more sodium than regular meat.
We think they could go as low as $98 before going up, however, long term we think they will outperform the broader market.
Current Price: $112
Six Months: $160
As the market sees the progress with plant based chicken nuggets they may be able to pick up another type of meat market in their valuation. We think this will accelerate as the consumer is getting used to seeing plant based meat in the market.
Final thought on Beyond Meat: This may be a healthy long term company, also we think they have a predictable high growth. In 2019 overall plant based sales went up 14%, and in 2020, they went up 18%. We think this trend will continue and the price will appreciate. This is not financial advice, this is our thoughts and interests put in writing.
Disclosure: We do not own BYND securities/shares at the time of publication.
What does upstart do?
“Upstart is a leading artificial intelligence (AI) lending platform designed to improve access to affordable credit while reducing the risk and costs of lending for our bank partners. By leveraging Upstart's AI platform, Upstart-powered banks can offer higher approval rates and experience lower loss rates” A company that reduces risks and cost of lending? That sounds like a pretty profitable company.
This is a stock that we haven't talked about yet, but it's one that will probably be high on our radar. This stock has skyrocketed since it’s IPO on December 16th 2020. It has increased 1,240% since then. UPST listed at $29 and sits at $268.05 now. Looking at their earnings so far have just been improving. “Revenue. Total revenue was $194 million, an increase of 1,018% from the second quarter of 2020. Total fee revenue was $187 million, an increase of 1,308% year-over-year.” Revenue is moving in the right direction and the earnings per share killed expectations in the second quarter.
The price should continue to increase over time
Current Price: $268.05
One Months: $280
One Year: $350
Even after the run UPST has had, they have just scratched the surface. They mainly focus on the personal lending space. They have begun moving their AI technology to the auto sector which could be huge for the company. The market for this type of service is huge, around $700 billion huge. UPST has only touched about $6 billion so far. Their AI could be applied to other areas as well such as mortgages, and small business loans. Basically this company still has huge potential.
The last thing to point out is the earnings report november 9th. Typically leading up to the earning report the stocks will rise in anticipation of excellent results in the 3rd quarter. Watch for UPST to gain a little leading up to November and look for another strong result. This is one that we will continue to purchase for the huge upside, however with any stock there is a fair amount of risk so consider if Upstart would be a good stock for your portfolio.
Disclosure: We do not own UPST securities/shares at the time of publication.
All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.
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Until next week,
and the Optifinancial Team
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