There’s a little corner of the ESG (environmental, social and governance) sector that’s been getting much bigger lately. It’s the plant-based foods niche, and start-up Tattooed Chef (NASDAQ:TTCF) has been staking its claim in this market while TTCF stock has been posting impressive gains.
TTCF stock is still fairly new. Last year, Tattooed Chef went public in a special purpose acquisition company (SPAC) deal between Forum Merger II and Ittella International.
That deal was approved in October, and shares of TTCF stock began trading on the Nasdaq Exchange in November. The growth of the TTCF share price since that time has been impressive, to say the least.
If you’re a believer in the future of the plant-based foods market, you really ought to take a look at TTCF stock. Regardless of your own dietary habits, you can still take a stake in the mindful eating movement.
TTCF Stock at a Glance
Prior to the announcement of the SPAC merger, TTCF stock clung closely to the $10 area. That’s not unusual for pre-deal announcement SPAC stocks. $10 is a normal price point as the investing community is still waiting to find out what company will be the acquisition target.
As is common with SPAC stocks lately, TTCF stock posted quick gains after the merger plans were disclosed. Yet, it hasn’t always been a smooth ride for TTCF traders.
After popping to $18 in June, TTCF stock promptly fell to the $13 area in July. That was followed by a swift turnaround, though, as TTCF rocketed to a 52-week high of $27.80 on Sept. 18.
Then there was another crash, this time taking the TTCF share price all the way down to $15 on Dec. 1. Finally, there was another resurgence as the bulls rallied TTCF stock above $24 by early February.
In short, this is a stock for folks who can handle some volatility. If you choose to own shares of TTCF stock, you might be in for a roller-coaster ride. But then, you could end up with strong returns in the long run.
Giving a Crop
“For people who give a crop”: that’s the tag line of Tattooed Chef, so perhaps you can already tell that this company has a rebellious streak.
The company is out to claim a sizable slice of the $55 billion frozen foods industry. And apparently it’s making surprising progress, as Tattooed Chef claims an estimated 68% compound annual growth rate (CAGR) in revenues from 2018 to 2021.
Tattooed Chef’s vision is to get its plant-based food products in the aisles of grocery and convenience stores not just in North America, but worldwide.
The progress towards that objective has been outstanding so far. Tattooed Chef has already secured 23,000 points of distribution for its products. Plus, the company has a target of 65,000 distribution points for 2021.
It’s also nice to know that Tattooed Chef has a cash balance of more than $90 million. This is important as sometimes start-ups end up becoming non-starters as their cash balances run low. However, this doesn’t appear to be an issue for Tattooed Chef.
Punishing the Short Sellers
Still, not everyone has been enthusiastic about Tattooed Chef. For example, Kerrisdale Capital published a highly critical report on the company in November.
Seemingly, Kerrisdale Capital didn’t view Tattooed Chef’s growth as sustainable:
While it’s true that the brand’s 2020 sales far exceeded those of 2019, the momentum has slowed considerably in recent months, with sequential sales performance dramatically underperforming industry sales patterns in comparable frozen food categories.
This analysis was focused on a few months, and long-term investors need not worry as the big picture is the most important consideration. As InvestorPlace contributor Luke Lango points out, “Plant-based food sales have been outpacing animal-based food sales by about 5x for several years now, with that gap only widening every year.”
In other words, Tattooed Chef is part of a hyper-growth market. Not every month or quarter will reflect that growth. Investors should consider an investment in TTCF as a marathon, not a sprint.
No matter what your dietary regime might happen to be, you can still put TTCF stock in your portfolio.
After all, the plant-based movement isn’t seeking to exclude any investor. So, why not join Tattooed Chef and profit from the market’s undeniable momentum?
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.