Rising food costs and inflation worldwide are benefiting food industry stocks as consumers are paying more for food, leading to increased profits for food companies. In addition, the food industry is considered a staple industry, providing essential products to consumers, leading to relatively stable and consistent returns for investors. Furthermore, food stocks are considered relatively recession proof given the inelasticity of demand for basic food products. As a result, food industry stocks have become increasingly attractive investments, with increased demand driving up share values prices.
Over the past month the 5 of the 6 food stocks I've got in my portfolio are showing largely positive returns, with a clear preference for food technology over more industrial-scale food, particularly meat, manufacturers. Take a look at the spread; whereas SPY, a convenient baseline, is +6.6% since 12/30. Underperforming this was JBSS, with a performance near par. One factor contributing to this was political instability in Brazil, which has exerted a bearish effect on multinationals like JBS based in the country.
TSN and BHIL, two US meat mainstays, performed +7.67% and +18.89%, respectively. Nice gains over a short window indeed. However, they've been left ion the dust by food tech companies with exposure to the CellAg market.
Take KROP, a foodtech ETF. It has broad exposure to a range of food-related securities including CellAg, and its +19.73% over the last month. This leaves its 1mo performance suspended between the big meat stocks and more speculative cultivated meat plays.
And that takes us to the other end of the spectrum; following some volatility associated with a recent share offering, STKH is +35.71%, a clear lead for my portfolio. Performance has been more moderate for LSE's ANIC (+14.41%) and CULT (+17%).
Overall, Q1 '23 is shaping up to be a very strong Q for food stocks and consumer defensives as a whole. While I'm planning on holding biggies like TSN, JBS, and BHIL on a LT horizon, STKH and other cultivated meat stocks are looking increasingly bullish as the field moves forward by leaps and bounds.
Over the past month the 5 of the 6 food stocks I've got in my portfolio are showing largely positive returns, with a clear preference for food technology over more industrial-scale food, particularly meat, manufacturers. Take a look at the spread; whereas SPY, a convenient baseline, is +6.6% since 12/30. Underperforming this was JBSS, with a performance near par. One factor contributing to this was political instability in Brazil, which has exerted a bearish effect on multinationals like JBS based in the country.
TSN and BHIL, two US meat mainstays, performed +7.67% and +18.89%, respectively. Nice gains over a short window indeed. However, they've been left ion the dust by food tech companies with exposure to the CellAg market.
Take KROP, a foodtech ETF. It has broad exposure to a range of food-related securities including CellAg, and its +19.73% over the last month. This leaves its 1mo performance suspended between the big meat stocks and more speculative cultivated meat plays.
And that takes us to the other end of the spectrum; following some volatility associated with a recent share offering, STKH is +35.71%, a clear lead for my portfolio. Performance has been more moderate for LSE's ANIC (+14.41%) and CULT (+17%).
Overall, Q1 '23 is shaping up to be a very strong Q for food stocks and consumer defensives as a whole. While I'm planning on holding biggies like TSN, JBS, and BHIL on a LT horizon, STKH and other cultivated meat stocks are looking increasingly bullish as the field moves forward by leaps and bounds.