There is little doubt that one of the stocks that has really captured the imagination so far this year is Beyond Meat (BYND). At the same time there has been something of a Beyond Meat effect, with a read across / proxies to the phenomenon scattered through the food space. A company which felt the influence of meat alternative giant is Del Taco Restaurants (TACO), given the way that it added vegan and vegetarian options to its menu, with commentators noting the way that even die hard meat eaters get a “flexitarian” urge now and again when new alternatives are presented to them.
What has been disappointing though so far, is that even with the Beyond Meat inspired boost, same store sales at Del Taco’s restaurants were only up 2.2% as opposed to the 2.7% expected. This caused the stock to fall earlier this week. But it may be that the market has been too harsh on Del Taco. It could very much be argued that it is still relatively early for the alternative meat space, and Del Taco’s offering as well. It is also the case that shares of Del Taco are still appreciably up on the start of 2019.
The shares gapped higher in June and on this week’s pullback have found support in the $11.50 region. There is also a rising trend channel which can be drawn from March off whose floor the stock has bounced twice this week. The likelihood is that at least while above the 200 day moving average still rising at $10.89 the stock will be able to revisit the best levels of the year towards $14 over the next 1-2 months.
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