The Beyond Meat Foods corporation has been one of the more successful companies within the green mutual group DIA Investments. However, with the recent success has come mixed bag of mixed emotions from employees, stockholders, and even investors. A look into Beyond Meat can shed some light on the reasons behind their recent surge but it is important to understand that the stock is still volatile and poses significant risks.
Although the original manufacturer was severely impacted by the peanut butter pandemic, Beyond Meat quickly recovered and subsequently enjoyed a stellar performance in the stock market. The maker of plant based-meat raised its earnings per share by about thirty percent over the same period last year. Beyond Meat’s business model is not dependent on genetically modified organisms, so any hopes of a positive future are non-existent. This bodes well for the company as the demand for vegetarian products like Beyond Meat continues to steadily grow. It is very unlikely Beyond Meat will generate the type of organic growth that corn, wheat, soy, and other similar crops had had over the past decade.
Beyond Meat is not without its own struggles however. The peanut butter glut last summer helped to drive up demand but supply grew to record levels and prices per ounce increased, making it prohibitive to ship Beyond Meat products to retailers. The glut also caused BYND stock to experience a steep drop which temporarily lowered their market cap and created further pressure on the company. Beyond Meat expects these issues to be resolved over the coming year.
Beyond Meat is also late to market in several other regards. They have only received Market Access Corporation (MAC) approval for two of their six new product lines which leaves them lagging behind in development and in the process of securing manufacturing facilities. This could hurt their ability to meet the demand from private and public sector clients which may cause a significant dent in their growth and stock price.
Beyond Meat’s other issue is its inability to accurately predict market conditions. They do not use a seasonal or 50-day moving average to give their predictions. Instead they base their forecasts on an average of three months. Beyond Meat’s inability to correctly predict the direction of market trends is largely due to their reliance on a standard weight over a one-month period. Using a standard weight over a longer period of time would help eliminate bias which could cause incorrect forecasts. However, since Beyond Meat relies on a one-month moving average to make its predictions, it is inherently prone to error.
The lack of accurate information can spell disaster for a young company like Bynd Stock. This is especially true given that a new product cannot be guaranteed to be successful. Once again I repeat my call to invest in quality, well-established brands with solid track records. You will not make money in the short term trading the “over the counter” stock exchange, but the long-term is where you will make money if you are smart and play in the right stock exchanges such as B&D and Beyond Meat.If you want to know more information relating to releases of BYND, you can check at https://www.webull.com/releases/nasdaq-bynd.
