In the latest instalment of Yahoo Finance’s Good Buy or Goodbye, Julie Hyman is joined by Mizuho Managing Director John Baumgartner to discuss his stock picks to buy and avoid in the food sector.
On the buy side, Baumgartner highlights Nomad Foods (NOMD), noting its potential “return to volume growth.” He sees upside potential not yet “priced in” from 2023 promotional “reinvestment back into the business.” He notes multi-year cost savings could also drive a 200+ basis point lift in operating profits in the coming years. Finally, Baumgartner says the new 3% dividend “opens up the stock to income oriented shareholders” as well.
For a stock to avoid, Baumgartner names Beyond Meat (BYND) citing its “limited portfolio.” After peaking in 2020, sales have faced “three straight years of decline.” With focus only on beef and sausage substitutes, Beyond Meat misses larger consumer segments. Baumgartner believes reinvestment could yield “very low returns” without a “portfolio broad enough” to draw more consumers, further “reducing profitability.”
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Editor’s note: This article was written by Angel Smith
