Opinions
Stephen Takacsy, B. Eng, MBA
Goodfood Market Corp.
FOOD-T
BUY
Oct 31, 2019
From $40 to $240 Million in sales in three years. 45% of the meal kit market. They recently announced they're positioning against the grocery market. They are being very smart about this. They are leveraging their platform to add to the food basket. They trade at a big discount. They just announced a reusable box that is made mostly out of air.
$2.900
Stock price when the opinion was issued
food processing
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BUY
It's been on a tear for the last 6-8 weeks due to a surge on at-home demand. He likes it. They operate at close to cash flow and break-even. They invest a lot in their distribution. Layer in purchases in the coming 6-8 weeks. The momentum is there, and there's opportunity to expand their grocery delivery to meals. Traditional grocers haven't cracked meal delivery, so he's not worried about competition.
food processing
PAST TOP PICK
(A Top Pick Sep 10/19, Up 145%) The pandemic accelerate their already high growth. It's one of the top 30 performing stocks YTD. They reach 280,000 Canadian subs as the largest meal-kit company. Revenues had shot up five-fold over recent years when he bought this at $1.40. They just reported their first profit ever, proving the skeptics wrong. They trade at 1x revenues vs. 2x of its main competitor. Good upside coming.
food processing
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food processing
BUY
This is one of his largest positions. He trimmed a little on the way up but it is a long term core holding. The pandemic has really, really helped them. People are ordering more food from home. They are offering their own private label products with same day delivery. They plan to go to $4 Billion in sales over the next five years. They are a competitor to Hello Fresh. Down the road they would be a logical take-over for a grocery store chain. They have executed flawlessly.
food processing
TOP PICK
An oversold pandemic stock, with a huge runway for growth. One of the fastest growing companies in Canada. Trading at only 1x sales. Market leader in Canada. Building out a grocery business, which competitors are not doing. Pandemic has got people used to ordering online. Great entry point. No dividend. (Analysts’ price target is $12.44)
food processing
BUY
Selling off post-pandemic, grossly exaggerated. Trading at a massive discount to HelloFresh. Pivoting to online groceries and building the brand, so it's going after a much bigger market than just meal kits, which still has a lot of growth. Subscriber count down, but basket size up. Long runway for growth, but they can't ignore growing the meal kit side of the business.
food processing
PAST TOP PICK
(A Top Pick Apr 28/21, Down 67.4%) Are building online grocery sales now. When he recommended it, he expected another leg up--and shares rose last summer on good numbers. But he sold this around $10 because he was concerned the company was no longer focusing on meal kits and was spending a lot to enter the online grocery delivery business . Selling was the right move, because they have since announced larger operating losses and weaker sales growth.
food processing
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