Meat-Alternative Tech Stocks Set to Skyrocket
One of the most compelling stories of the stock market in 2019 was the performance of Beyond Meat Inc (NASDAQ:BYND). Beyond Meat stock started out on a amazing run, climbing as high as 800% within four months of its initial public offering (IPO) before the market corrected and the stock fell.
Still, even with that fall, investors who bought BYND stock during its IPO are still sitting with a 200% gain in about seven months. In fact, I’d go as far as arguing that Beyond Meat stock was the top tech stock of 2019.
With that in mind, I believe that more meat-alternative stocks are on the way in the near future, and they could dominate the market in 2020.
The thing to remember is that the stock market is very much a “monkey see, monkey do” environment. Which is to say, when you see a company register big financial gains in a short time, imitators will not be far behind.
Every company wants to have an IPO like BYND stock (warts and all), and others will be killing to get in on this fast-growing market.
Chart courtesy of StockCharts.com
I project that we’re going to see several meat-alternative stock IPOs in short order.
The most obvious example is Impossible Foods Inc., a main competitor of Beyond Meat, with its own “Impossible Burger.”
Impossible Foods is looking to nab a valuation between $3.0 and $5.0 billion in its next fundraising round, possibly doubling its valuation of about $2.0 billion in May. (Source: “Exclusive: Impossible Foods eyes doubling valuation with new funding,” Reuters, November 25, 2019.)
According to anonymous sources, an Impossible Foods IPO could come as early as 2020.
Of course, these are just rumors, but if Impossible Foods stock does hit the market in 2020, expect to see investors flock to it in droves. After all, nobody wants to miss out on the next Beyond Meat stock IPO.
“We need to consider every option for fueling our long-term growth. However, we have not announced any plans or timing regarding an IPO,” said an Impossible Foods spokeswoman. (Source: Ibid.)
Now, there is a risk here: staying too long as a private company and getting too much private money fueling higher valuations can often dampen an IPO.
We’ve seen it happen several times in 2019, with the biggest offenders being Uber Technologies Inc (NYSE:UBER) and Lyft Inc (NASDAQ:LYFT).
Still, with a market cap of about $4.7 billion, BYND stock has set the stage for Impossible Foods stock to skyrocket if it comes in at the right price.
It’s worth remembering that the meat-alternative industry is in its infancy. Beyond Meat stock is the first meat-alternative stock to hit the markets via an IPO. Not to mention that the meatless craze is just starting to become mainstream.
According to market research company The NPD Group, Inc, 18% of Americans have been attempting to consume less meat. (Source: “Beyond Meat’s stock surges to all-time high,” CNBC, July 23, 2019.)
Trends like this are developing around the world, making this a truly global market when it reaches its potential.
Another important fact about the meat-alternative industry is that Beyond Meat Inc, at one point, had a market cap of over $12.0 billion.
While much of that was due to the hype following the company’s IPO, that still speaks to just how much investors believed in this industry, even if an inevitable pullback followed.
It’s worth noting that only a small portion of the stocks were being sold short a few months ago, again speaking to the confidence that many have in this burgeoning industry.
The next decade could see the meat-alternative market top $140.0 billion. (Source: “Alternative meat to become $140 billion industry in a decade, Barclays predicts,” CNBC, May 23, 2019.)
Considering there’s only a few major players in the industry right now, the next few years could mean massive gains for investors getting in at the right time.
And that brings us to the 2020 projections.
Meat-Alternative Stock Projections for 2020: The Best Tech Stocks
For a long while now I’ve considered meat-alternative stocks to be tech stocks.
Meat-alternative companies function exactly like tech companies, aside from their products being edible. They involve large amounts of money going into research and development in an attempt to bring out revolutionary products that will fundamentally change important aspects of our lives.
That’s a credo that the “disruptive” Silicon Valley types have been spouting for years. The meat-alternative companies are just (for the moment anyways) better at it.
They hope to radically alter our diet and are coming in at the perfect moment. Between concerns about animal cruelty on factory farms and calls to curtail global warming (to which the meat industry is a big contributor), this is the perfect climate for meat alternatives to thrive.
As such, I’m very bullish on meat-alternative stocks. I believe that Beyond Meat stock and Impossible Foods stock (when it hits the market, that is) are going to be big winners.
While BYND stock will take some time to calibrate, when it eventually hits a price that many investors are comfortable with, the gains will renew in earnest. Those gains, I might add, will continue to swell as the industry grows.
As for the Impossible Foods IPO, whether that happens in 2020 or beyond, this company has the chance to see huge stock gains on day one when it hits the market.
The only caveat is that Impossible Foods can’t supercharge its valuation while a private company, or that could very well detract from its performance on the stock market when it goes public.
Traditional tech stocks have not fared so well when it comes to recent IPOs. On the other hand, Beyond Meat stock proved that meat alternatives could be a dynamite investment opportunity.
With the numbers only looking up for the meat-alternative industry, I anticipate that 2020 will be another bountiful year for this exciting new industry (and for its investors).