In a year in which some high profile initial public offerings have already taken place, plant-based burger and sausage maker Beyond Meat Inc (BYND)’s IPO has been an unqualified success. The stock was issued at a price of $25 back on 1st May this year but since then it has gone on a tear and climbed by as much as 125% on its opening day to hit $46.
However, the stock has continued to gain and the company now commands a market cap of over $6 billion. Beyond Meat’s performance overshadowed the much-anticipated IPOs of giants like Lyft and Uber.
Impressive Growth Trajectory
The primary reason behind the stock’s strong performance is due to the impressive growth trajectory that it has displayed. Sales rose by as much as 170% in 2018 and touched $87.9 million, while the growth for 2019 is projected to be 140%. The rate of growth in 2019 will take total sales to $209 million. These numbers are, without a doubt, impressive but there are other factors that need to be considered.
First and foremost, despite the strong sales growth and projected growth, it is important to keep in mind that Beyond Meat has made significant losses. In addition to that, the possibility of sales growth might already be priced into the current stock price of $102 and according to experts, even that price is an overestimation. Last year, Beyond Meat made a $30 million loss and it is unlikely that it is going to turn profitable in the next few years.
High Sales Multiple
In the packaged food industry, companies trade around twice the future sales but in the case of Beyond Meat, the stock is trading 27 times its future sales and that is an anomaly. Even in high growth industries like software and tech, companies trade at seven times their future sales at a maximum. The reason behind the valuation of the stock is also because of the industry in which Beyond Meat is engaged.
Over the past few years, animal welfare activists, environmentalists, vegans, and vegetarians have campaigned against animal meat extensively, which is why it could be argued that Beyond Meat has emerged at the best possible time. The company’s pea based meats have the possibility of capturing a large chunk of a market that could be worth $100 billion in 15 years, according to JP Morgan.
Last but not least, it is also important to point out that Beyond Meat would not have the market to itself and are going to be faced with intense competition soon. Impossible Foods is all set to become one of its biggest rivals, while Amazon’s Whole Foods Market also sells vegetable based meats.
Other giants like Nestle and Tyson Foods are also going to enter the market soon. However, the optimism surrounding Beyond Meat continues and a JP Morgan analyst gave the stock an outperform rating as he believes that a supply agreement with a fast food restaurant chain could be inked soon.
Biotech Stocks To Watch In June: Cara Therapeutics (CARA) & Intellia Therapeutics (NTLA)
Among biotech companies, the competition between Cara Therapeutics Inc (CARA) and Intellia Therapeutics Inc (NTLA) has been an intriguing one. The two companies had been on the same level as far as the market cap goes during most of the year so far.
But Cara has now pulled ahead by as much as $150 million following positive data from its lead product candidate. That being said, it is also important to keep in mind that if an investor is looking at a long term investment, then the disparity in market cap between the two companies is a minor. Here’s a look at the pros and cons of Cara and Intellia.
Cara Therapeutics (CARA)
Cara Therapeutics is currently on the rise. Its lead product candidate Korsuva injection delivered highly encouraging results in its Phase 3 trial. It’s now believed that it would not be long before Cara has its first product on the market.
It is meant for the treatment of moderate-to-severe chronic kidney disease-associated pruritus. According to reports, the results were great. Another late-stage test is going to be conducted soon. The results could be announced by the end of this year. If Korsuve is approved, then it will be marketed by Fresenius Medical Care and Vifor Pharma Group.
Cara has entered joint ventures with those companies to market the product in the United States, Japan, and South Korea. An oral version of Korsuva is also in the pipeline and could prove to be another important development.
Intellia Therapeutics (NTLA)
Intellia Therapeutics (INTA) is involved in creating CRISPR gene editing therapies. It is a segment that has a lot of promise in the future. Even though the company is some years away from having anything on the market, the promise of gene editing therapy is exciting. So much so that Intellia has already found partners in big-ticket firms like Regeneron and Novartis.
Intellia is expected to file for FDA approval for the clinical study into its lead product NLTA-2001 in 2020. It is meant for the treatment of transthyretin amyloidosis, an uncommon genetic disease. Studies into the products have proven to be promising so far. The company is also working on a product to treat myeloid leukemia.
Now when it comes to choosing between Cara and Intellia, experts believe that the former could a better company. It’s already on the verge of having an approved product on the market. Intellia, on the other hand, is likely to be some years away from winning approval.
4 Security Penny Stocks To Watch
As Threats Arise, Security Stocks Take Center Stage In 2019
With the Federal Reserve’s meeting coming, the general market is bracing for anything. Meanwhile, penny stocks are continuing to climb at absurd rates. Trading penny stocks as of late has brought many investors fruitful profits and they look to continue this trend. Here are some security penny stocks to watch for the remainder of June 2019:
Security Penny Stock #1
Liberty Defense Holdings (SCAN.V)
Market Cap: $46.404M
Liberty Defense Holdings Ltd. (SCAN.V) is a security company looking to take the industry into the next century. Liberty’s HEXWAVE product is a 3-dimensional scanning device that can detect weapons and threats of any kind. The product can do this both with speed and discretion ensuring privacy for citizens.
Liberty signed a Memorandum of Understanding with the soccer team FC Bayern München to beta test HEXWAVE in their arena. They join an ever-growing list of places that have signed MOU’s to beta test Liberty’s product. This MOU expands its ability to comply with and test the market requirements for their product internationally.
“The reception to our HEXWAVE product has been fantastic and we are excited about working alongside FC Bayern Munich, a team that is a household name in both Europe and North America, […] Our ability to deploy in both indoor and outdoor settings, with covert and overt applications, sets us apart and has also been driving increasing interest from the market.”Bill Riker, CEO of Liberty
Security Penny Stock #2
Magal Security Systems (MAGS)
Market Cap: $101.371M
Magal Security Systems Ltd. (MAGS) provides security solutions both online and physical. Some services provided include identifying potential security problems, integrating new systems, and custom designs for any type of security needs.
Recently, Magal received a $5.5 million contract for its advanced perimeter intrusion detection system. The system prevents people from illegally crossing border fences and walls.
Dror Sharon, CEO of Magal, stated, “Magal is a world leader in perimeter intrusion technologies. Our growing wins of orders such as this – providing sensors for active international borders, is due to the decades of experience that we have in providing systems that have more than proven themselves in-the-field.”
Security Penny Stock #3
Rekor Systems (REKR)
Market Cap: $27.502M
Rekor Systems Inc. (REKR) is a company that has developed surveillance technology to enhance public safety, banking, and traffic management. Primarily, the company takes their advanced software, which utilizes machine learning and upgrades IP cameras to the next level. This reduces the cost when collecting highway tolls and helps manage traffic congestion.
Throughout June, Rekor Systems has been gaining recognition and application across the US. On June 3rd Rekor obtained a contract to start deploying its Mobile LBR-2 vehicle recognition systems. After this deployment on the 3rd, the LPR-2 system North Carolina law enforcement placed an order. On June 12th, Colorado highway authorities chose Rekor’s cloud system called NUMERUS to read enhance their license plate reading.
Security Penny Stock #4
BIO-key International (BKYI)
Market Cap: $18.03M
BIO-key International Inc. (BKYI) is a security technologies company that is pushing past the limits of fingerprint scanning. BIO-key provides a plethora of finger scanning products that provide security for your computer, hard drive, and the government. They have a partnership with Microsoft to develop biometric sign-in for Windows 10.
The company recently announced that a foreign defense ministry ordered more BIO-key deployment for secure access to Microsoft applications.
“We were delighted that such a capable and prestigious technology team determined that BIO-key met their security and scalability requirements and have now made follow-on investments to grow their user base. Defense Ministries are constant targets of cyber-attacks, and we are glad to help them step up authentication to the highest assurance with NIST-verified accuracy and FIPS compliance.”Jim Sullivan, SVP of BIO
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