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Why I’m Selling Beyond Meat (NASDAQ: BYND)

Beyond Meat Looks Very Top Heavy at Current Levels

Written by Jeff Siegel
Posted June 10, 2019

I knew it would be a big winner, but not THIS big.

Beyond Meat (NASDAQ: BYND), the maker of what is arguably the best-tasting plant-based burger on the market, has had a killer run since going public last month.

I actually wrote about this one, right before the IPO. Here’s a small snippet of that write-up …

I’ll be honest. I’ve never been a huge fan of veggie burgers.

I’ll eat them, but with the understanding that they’re not really burgers and don’t offer the same flavor profile or textures as a meat-based burger.

And Beyond Meat’s burgers don’t taste or feel like real meat burgers either. But they’re pretty close, and really freaking good!

I first had one at a diner about a year ago, mostly out of curiosity, as I had heard about the company’s burgers from some of my vegetarian and vegan friends. They all raved about these burgers. Especially those who transitioned form a meat-based diet to a plant-based diet later in life.

Since then, I’ve had these burgers on multiple occasions, and all at restaurants. I’ve never actually purchased any from the grocery store. But this is mostly because, as I mentioned, I get 90 percent of my food from my farm, so I don’t even go to the grocery store that often.

In any event, I’ve had a lot of plant-based “burgers” throughout my life, and this is the only one I’ve ever really enjoyed. And I’m not the only one.

While you’ll be hard-pressed to find a veggie burger at most restaurants, (at least ones that non-vegans will eat), you can find Beyond Meat’s burgers at TGIFridays, Carls, Jr., A&W restaurants, Del Taco, and the burger grills at some Whole Foods stores.

The interesting thing about Beyond Meat, however, is that it’s not just appealing to those who eat plant-based diets . In fact, the company has been very focused on ensuring that omnivores also buy their products, which is why you’ll oftentimes find them in meat cases, as well as in the plant-based foods sections of grocery stores.

The company has enjoyed some excellent revenue growth over the past few years, doing $8.8 million in 2015, then getting up to $88 million last year. That’s not trivial.  This is definitely a solid company.

Of course, Beyond Meat also looks like most start-ups …

  • Not yet profitable
  • Lots of competition from well-funded players
  • Must scale quickly to keep pace with growth

Another concern for Beyond Meat, right now, anyway, is that it only has one supplier for its key ingredient, which is yellow peas. If that supplier runs into interruptions, being that the company is still so small, it could have a significant effect on the company’s ability to maintain deliveries.

Now the company will be diversifying its supply chain soon, but until that happens, this is a legitimate risk factor.

Risk factors be damned, I guess.

While I’ve personally profited from Beyond Meat’s IPO, at current levels, it’s looking very top heavy.

And I don’t say this to criticize the company.

Beyond Meat is a major player, and it has a great future ahead. It’s kind of like Tesla (NASDAQ: TSLA). Tesla is an amazing company, with an amazing product and amazing brand. But that doesn’t mean the stock is worth owning right now.

It is possible to like a company without liking the stock. Although I suspect there are plenty of desk-pounding shorts who would disagree.

In any event, if you bought shares of Beyond Meat when it first went public, I’d recommend selling the shit out of that thing. Or at least sell half and take some of those winnings off the table. Because if this thing sells off – and I believe it will – it may not be pretty.

The shorts have been slouched on their perches for weeks, just looking for an opportunity to exploit a correction. And I don’t want be around when that happens.

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