Given the uncertain macroeconomic climate and chronic inflation, BRC (BRCC) and Save Foods (SVFD) fundamentally weak food stocks are expected to stay under pressure. Therefore, it might be best to avoid these stocks. Read on.
Persistently high inflation, tight monetary policy and fears of an impending recession are putting pressure on industries. As food firms are expected to face pressure on margins from rising raw material costs, investors may look to sell fundamentally weak BRC Inc. (BRCC) and Save Foods, Inc. (SVFD) before they deteriorate further.
Although the most recent CPI report signaled a cooling in inflation, it still stays well above the Federal Reserve’s goal of two%. AND strong job growth in March and high inflation is prone to trigger further rate of interest hikes by the Federal Reserve, adding to fears of the economy slipping into recession.
Moreover, said Cleveland Fed chairman Loretta Mester that rates of interest could have to rise above 5% considering the high prices. As fears of a downturn heavily influence investor sentiment, it might be best to avoid BRCCs and SVFDs. While food stocks are frequently recession-proof, poor stock fundamentals can result in downward pressure on prices.
BRC Inc (BRCC)
BRCC buys, roasts and sells coffee, coffee accessories and designer clothing within the United States. The company also produces media content; podcasts; and digital and print magazines, and sells coffee, outdoor and lifestyle equipment.
In terms of rolling 12-month EBIT margin, BRCC negative 22.49% in comparison with industry average of seven.64%. Its final 12-month return on total capital of minus 41.11% in comparison with the industry average of 6.42%. Similarly, its negative 40.52% final 12 months FCF leveraged margin in comparison with the industry average of two.69%.
For the fiscal fourth quarter ended December 31, 2022, BRCC’s operating loss increased 378.3% year-on-year to $19.46 million. Net loss increased 334.8% year-on-year to $20.03 million. In addition, adjusted EBITDA loss significantly increased year-on-year to $11.42 million, while net loss per share was $0.09.
Over the past yr, the stock has fallen 65.1% to shut the last trading session at $5.21.
BRCC’s weak foundations are reflected in its performance POWR rankings. The stock is rated F overall, indicating strong selling in our proprietary rating system. POWR rankings rate stocks on 118 various factors, each with its own weighting.
It takes 77th place out of 79 firms within the rating Food producers industry. It is rated F for quality and D for stability and moods.
We also gave BRCC rankings for growth, value and momentum. Get all BRCC rankings Here.
Save Foods, Inc. (SVFD)
Based in Hod HaSharon, Israel, SVFD, an agri-food technology company, develops and markets environmentally friendly green treatments for the food industry to boost food safety and extend the shelf lifetime of fresh produce.
For the rolling 12-month return on equity, the negative SVFD of 93.10% compares to the industry average of 11.44%. Its 12-month return on total capital of negative 58.69% in comparison with the industry average of 6.81%. Similarly, its negative return on total assets of 88.41% during the last 12 months compares to the industry average of 5.21%.
SVFD revenue from product sales for the financial yr ended December 31, 2022 decreased by 10.1% year-on-year to PLN 394 thousand. USD. The company’s operating loss increased 23.7% year-on-year to $5.82 million. The net loss attributable to the corporate’s shareholders increased by 19.1% year-on-year to USD 5.74 million. In addition, loss per share was down 20.4% year-on-year to $1.64.
Over the past yr, the stock has fallen 85.6%, closing the last trading session at $0.75.
SVFD’s POWR rankings reflect its bleak outlook. The stock is rated F overall, corresponding to strong selling in our proprietary rating system.
It ranks 78th in the identical industry. Additionally, it’s rated F for value and stability and D for quality.
To see additional SVFD rankings for growth, momentum and sentiment, click here.
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BRCC shares. Year-to-date, the BRCC is down -14.73%, in comparison with the S&P 500’s 9.17% increase over the identical period.
About the creator: Malaika Alfons
Malaika’s passion for writing and interest in financial markets led her to pursue a profession in investment research. With a level in economics and psychology, he intends to assist investors make informed investment decisions.
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