Competition Is Heating Up for Once-Loved Food Stocks

There are too many cooks in the kitchen for Beyond Meat and Grubhub to stay worthwhile investments

At least one segment of this week’s episode of “Moneyline” might have you wondering if you’re tuning into Matt McCall’s cooking show. That’s right, he’s a foodie and an investing expert. With third-quarter earnings season well underway, he reviews two food stocks that completely flopped lately: Beyond Meat (NASDAQ:BYND) and Grubhub (NYSE:GRUB).

You’re probably aware that McCall isn’t a fan of Beyond Meat or BYND stock. From a foodie perspective, tasty meatless sausages aren’t enough to distract from an endless ingredient list. How can 40-plus ingredients be better for you than plain meat? From an investing perspective, his opinion is just as clear.

After reporting earnings earlier this week, Beyond Meat stock dropped 20%. For McCall, that’s far from a surprise. Increased meat-free competition from Tyson Foods (NYSE:TSN), Kellogg (NYSE:K) and Nestle (OTCMKTS:NSRGY) spells trouble for the recent IPO.

After the earnings flop, firms have been slashing their price targets, but it’s a little too late. This once-loved food stock trades at a price-to-sales ratio of 21.7 and a forward price-to-earnings ratio of 267.4. That valuation doesn’t bode well for the future, and McCall thinks the share price will continue to drop.

Oh, and then there’s Grubhub. On this food stock, McCall is a little more lenient. Heck, he admits that every once in a while he too enjoys ordering food with the click of a mobile app.

But Grubhub is no longer the only player in this space. It faces competition from Uber’s (NYSE:UBER) Uber Eats and Postmates. Although early on it was a stock for investors looking to play an emerging trend, competition is destroying GRUB. For now, these two food stocks are names to stay far away from.

McCall’s Podcast

How far? Well, why not space. Virgin Galactic (NYSE:SPCE) stock made its debut Oct. 28, making it the first publicly traded space exploration company. Virgin Galactic is one of famous entrepreneur Richard Branson’s endeavors, and even after the SPCE IPO, Branson controls a 51% stake. But don’t get your hopes up that you’ll be visiting aliens anytime soon. Virgin Galactic has no plans — at least yet — to take customers to the moon or further. For now, you can buy a seat on a spaceship for the low price of $250,000. That chunk of change buys you a seven-minute ride, starting in 2020.

It’s no secret that McCall loves companies that offer investments in major trends of the future like genetic testing and 5G. And certainly, space exploration sounds pretty futuristic. McCall warns that he’s not ready to buy shares just yet, but he plans on keeping a close watch on Virgin Galactic. If you’re ready to hop aboard and blast off, he recommends investing $5,000 and letting time do its thing.

For more on food stocks, Baltimore restaurant recommendations, space exploration and even some political commentary, tune into this episode of “Moneyline” with Matt McCall.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.

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