Despite a loss of confidence from consumers, the stock market continued to climb by the end of the trading week.
The market indices ended the day in the green.
Contradictory forces are shaping the market's sentiment. Thursday’s jobless claims report from the Bureau of Labor Statistics painted a better economic picture, with a lower number of new claims for the third row in a week.
However, a Survey of Customers by the University of Michigan showed consumers' surprising loss of confidence at the beginning of August. This could be due to the growing concerns around the COVID Delta variant.
In the end, positive sentiment won over, and all three indices finished the week in the green.
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Yum Brands (YUM) is “defying” drive-thru norms with its new experimental Taco Bell location.
Folks, recently, we have been exploring some food companies that are innovating how we eat. For example, we discussed Wendy’s (WEN) ghost kitchens. From plant-based foods to fermented ingredients and new ways to prepare and deliver food, the way we eat is changing rapidly, and that's why the team at Stock Card manages the “Future of Food” portfolio.
Today's winner stock is a company that is innovating how food is delivered to us. Yum Brands’ (YUM) Taco Bell franchise is defying the norm of fast-food drive-thrus. I mean that quite literally! Taco Bell is breaking ground this month on an experimental “Defy” drive-thru-only building. Fast food companies across the nation pivoted to depending on contactless food services, like drive-thrus, during the pandemic. Many went through quite a lot of operational challenges to deliver food efficiently in this new world, and now we see food delivery innovation popping up all around us. Drive-thrus and mobile order windows are great ways for companies to increase sales revenue, and this new step is taking the idea all the way.
Yum! Brands had its earnings call 2 weeks ago, which surpassed expectations. The investor reaction brought the stock up from $122 to $130, and it has continued to climb steadily since. The company also owns KFC and Pizza Hut, among other brands. Its Stock Card shows good profitability, revenue growth this fiscal year, and free-cash-flow generating operations. With 1.5% in dividend yield, the stock could easily fit into a dividend-focused portfolio, although there are some concerns about the amount of debt it carries. If the innovations such as the new drive-thru pay off, Yum Brand can expand it across all its brands and run a much more profitable business. It is worth watching, especially if you are a dividend seeker.
Yum Brands is shaping the future of food by reimagining the drive-thru.
Does Tattooed Chef’s (TTCF) dip mean it’s time to buy?
Speaking of companies on the mission to shape the Future of Food and get into our Future of Food portfolio, I want to revisit an old favorite of mine. Tattooed Chef (TTCF) has been on my personal 2021 watchlist for a while. You can find this by searching “2021 watchlist” on the Stock Card portfolio page as well. I’ve been waiting around for this stock to drop so I could snatch it up at a good price. My wish came true today!
TTCF shares were down 16% by the close. It's a ready-to-eat, plant-based food startup that focuses on the frozen aisle for now and serves you things like Budda Bowls and cauliflower pizza. It was founded in 2018, but despite its young age, its growing revenue rapidly and is already profitable.
Earlier today, the company released itsearnings report for this quarter. Tattooed Chef saw a 46% growth in revenue this year, which was great, but investors latched onto some future guidance. It forecasted a lower gross margin and a substantial loss in adjusted earnings before interest, taxes, depreciation, and amortization, known as EBITDA. As for last quarter, EBITDA was a loss of $5.9 million, yet future guidance from the company is expecting an even more significant loss of $14 to $17 million.
It’s no wonder that the company has a short interest of 14%, as I see on its Stock Card. The reason for the loss of profitability, according to the management, is reinvesting into expansion. Investors forget that the company is just 2-3 years old and already has distribution deals with Walmart (WMT), Costco (COST), Target (TGT), Sam’s Club. Thanks to the latest price drop, I’m considering picking up some more shares on Monday to enjoy a lower price.
Tattooed Chef is shaping the future of food by delivering better pre-made food in the grocery aisles.
NEW STOCK CARD FEATURE
Announcing: Stock Card’s new ETF cards!
Folks, I've already told you a few times and want to share this exciting news once again that we rolled out a significant new update to Stock Card. You can now research ETFs using the same easy-to-use and intuitive visualization and color-coding on Stock Card. ETF Cards have been one of the most requested features you have asked for in the last 12 months, and your wish is our command.
A couple of days ago, I uploaded a quick rundown to show you how to research ETFs using the new ETF Cards.
For a more in-depth explanation, I'd like to invite you to check out the demo video.
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