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The Rise and Fall (and rise again?) of Plant-Based Stocks

The Rise and Fall (and rise again?) of Plant-Based Stocks   In 2020, plant-based stocks were on fire. A wave of public offerings raised large amounts…

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The Rise and Fall (and rise again?) of Plant-Based Stocks  

In 2020, plant-based stocks were on fire. A wave of public offerings raised large amounts of capital for many promising new companies in the rapidly growing sector. 

Even established industry leader BYND rallied over 60% that year, an impressive return for a company that is already a unicorn.  

And far more “eye-popping” than that, from June 2020 until year end VERY exploded from a $0.25 IPO to close the year over $6.00. That’s a 24X return for investors that received our IPO alert. 

However, 2021 was not so kind to the sector, and investors who missed the boat on trimming (or outright selling) their positions have been left scrambling. 

This isn’t the first time we’ve seen the rapid rise and fall of an entire industry either. In less than a decade we’ve seen multiple bull and bear markets for cannabis, crypto, psychedelics and certain commodities. 

Though these sectors have each had a second wave of investor interest, plant-based stocks are still down for the count 

Companys trading at substantial premiums to their earnings or assets sold off, and stocks that weren’t much more than trend chasing “fluff” are starting to disappear. 

However, a lot of solid companies got dragged down too as sentiment soured… 

Are plant-based stocks poised for a comeback in 2022? 

Unlike high speculation plays like searching for gold or trading crypto, the rise of the plant-based industry is very tangible, easy to measure, and not subject to large degrees of government regulatory risk. 

The industry is already massive, and its growth is only compounding.  

The plant-based sector is expected to exceed $162 billion within the next decade, according to a new Bloomberg Intelligence report. That’s a figure that is very hard to ignore. 

Companies with strong management teams, unique value propositions and competitive moats will continue to capture market share in this growing business.  

And even if investors are too gun shy to reward the share price today, sooner or later I believe they will have to. 

 

How have I been navigating this market? 

While I have been generally trimming my small cap portfolio last year, I have added to companies that satisfy a more rigorous due diligence checklist as I look for diamonds in the rough and companies poised to grow. 

The management team is always a critical factor, as is showing some sign of traction within the product or service, and bonus points if the company has any kind of competitive moat protecting their business. 

There are quite a few companies that check those boxes, and one such company is a brand-new IPO that started trading last week. 

Introducing Plantable Health (NEO: PLBL) 

Plantable Health is the first clinically supported lifestyle change program that simultaneously utilizes coaching, technology and plant-based nutrition delivered to client’s homes to transform human health. 

The company’s program works in as few as 28 days and there are currently active clinical trials underway. Plus, the company is creating a pipeline of additional trials to validate its efficacy as a sustainable lifestyle intervention to prevent and reverse chronic conditions. 

Take a look at the three major components of Plantable’s operation: 

With the rise in popularity of eating more plant-based foods, consumers have quickly realized that most products on the market aren’t actually healthy for you, as they are highly processed and full of sodium and fat.  

Here’s what the Harvard Health blog says about veggie burger processing: 

“Even though legumes are sourced for protein in the branded meatless options, their health benefits are somewhat blunted by the high degree of processing involved.” 

And here’s what it says about saturated fat in veggie burgers: 

“Along with the ambition to replicate hamburgers comes a comparable amount of saturated fat. Since diets higher in saturated fat are associated with increased rates of both heart disease and premature death, they may not be the type to opt for if your ambitions are purely health-related.”  

Plantable was created by Dr. Nadja Pinnavaia, who began researching solutions beyond chemotherapy after losing her mother to breast cancer… 

After learning how much of an impact lifestyle (especially diet) has on health and putting her PHD to good use to understand the biochemistry of the brain and body, Nadja created Plantable, a scientific program designed to make adopting a healthy plant-based lifestyle easy, sustainable and enjoyable. 

And her programs work! I tried for myself.

It’s unfortunate how addicted our world is to popping pills as a solution to everything from diabetes to cholesterol to chronic illnesses. It’s refreshing to see something far more natural come out with truly jaw-dropping results. See below… 

Having personally invested over $1.5 million into the business, Dr. Pinnavaia is aligned with shareholders to grow this company.

And as a former Managing Director at Goldman Sachs where she worked for 12 years, I also believe she has the credibility (not to mention drive) to make this company an industry powerhouse. 

She is in good company too, with a growing team of high-profile executives and board members surrounding her. It’s a long list that I will introduce you to at a later time, but there are two key figures that stand out as being key to growing the company’s digital health aspirations and clinical trials: 

David Kopp Board Director, Former CEO of healthline.com

David Kopp is an experienced chief executive in consumer digital health with expertise spanning strategy, product development, marketing, and technology. Most recently, David led a passionate and highly successful team at Healthline Media, spearheading global growth to reach more than 350 million monthly visitors, more than any other health publisher at the time. David brings deep expertise in consumer-driven digital health businesses, particularly in growth marketing, scaling teams and culture, and digital strategy. 

Dr. Hooman Yaghoobzadeh – Medical Advisor

Dr. Hooman Yaghoobzadeh is a Clinical Associate Professor of Medicine at the Weill Cornell Medical College, New York Presbyterian Hospital. He completed Internal Medicine Residency, Cardiology Fellowship at New York Hospital. He has been recognized for his work in the prevention and reversal of disease through a whole food, plant-based diet. He has been featured on the NBC Today Show, CBS Evening News, as well as multiple radio talk shows. 

So what can we expect to see in 2022? 

In 2021, Plantable raised $6m to go public and kickstart its next phase of growth. Use of proceeds from the most recent financing are as follows: 

With a topped-up treasury, the company has outlined three primary areas for near-term growth: 

1) Expanding their existing direct to consumer business. The most recent audited revenue for the company is $1.4m CAD, and there are a few things that stand out. First, this is purely organic growth from referrals, without ANY marketing. Nearly half of Plantable’s customers come back again, and the lifetime value of a Reboot subscriber is high, at over $1800 CAD. Nearly half of the recent IPO financing is earmarked for an aggressive marketing campaign to ramp up revenue. 

2) Launching digital products. On January 18th, the company announced its first ever digital product launch with their app becoming available for iOS and Android devices. It’s a great blend of recipes, health tracking and education, and just the first step in a larger push forward into the world of digital health. Weight loss app “Noom” has recently raised over $500m after seeing revenue grow from $237 to $400m in lockstep with the growing popularity of digital health apps, and Plantable intends to get in on the action. 

3) B2B program sales. Upon successful completion of clinical trials, Plantable expects to launch sales of its program through affiliates like physicians and cancer clinics. This could lead to an entirely new sales force for the company, and a solid barrier to entry once their data gets validation from clinical trials.  

I am a major shareholder of this company, a loyal fan of Dr. Pinnavaia and a firm believer in the growth of this business as a long-term holding. 

Disclosure/Disclaimer: 

I am not a broker, investment or financial adviser, and you should not rely on the information herein as investment advice. If you are seeking personal investment advice, please contact a qualified and registered broker, investment adviser or financial adviser. You should not make any investment decisions based on this communication. This stock profile is intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. Employees and contractors of Edge Investments collectively hold five million three hundred thousand shares in Plantable Health Inc. Edge Investments corporate entity, Edge Growth Holdings Corp has not received compensation from Plantable Health to sponsor this article and this content has not been reviewed by the company. Information contained in this profile was provided by the company, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it.

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