BYND: Adding Beyond Meat to Investing Ideas (Short Side)

08/27/19 02:47PM EDT

Hedgeye CEO Keith McCullough is adding Beyond Meat (BYND) to the short side of Investing Ideas. Below is a brief note.

As the US economy digs deeper into #Quad4 in Q3, the short selling opportunities get tastier. Tasty Burgers, or not? Howard Penney doesn't buy the Beyond Meat (BYND) FOMO and hype at this price.

From a recent Institutional Research note, here are some of Hedgeye Jedi veteran Penney's concerns:

  1. The excitement of early movers will wane quickly (vegans represent less than 5% of the population).  Other consumers may try the product once, but converting meat consumers will take longer if it even happens at all. 
  2. It's Operationally complex for restaurant to add the product to the menu (McDonald’s said it's operationally complex and will take its time understanding the opportunity).  The ex-CEO of MCD is on the board of BYND, but he was fired by the company for poor performance.  For this reason, it’s not a given that MCD will test the BYND product.
  3. The product is not healthy to eat (see above).
  4. The BYND plant-based meat product will sell at a premium versus other menu items in restaurants, limiting consumer demand.  

Short today's bounce,

KM
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