eToro: Investors lose appetite for vegan stocks
Investors have lost their appetite for so-called ‘vegan stocks’ in the last 12 months whilst shares in traditional meat producers have fared far better.
New data compiled by social investing platform eToro shows that a basket of 10 of the biggest vegan stocks would have seen its value fall by 51% over the last 12 months, and by 36% over the previous two years. An equivalent basket of shares of the most renowned meat producing companies would have lost investors only 12% in the last year and gained 7% over the last two years, in US dollar terms.
This is a reversal in the trend seen in prior years, when the price of vegan stocks soared. Over a longer period, the vegan basket would still have been a better investment than the meat basket, returning 38% vs -10% over a three-year period, and 20% versus 5% over five years. This is solely down to the phenomenal growth of vegan-friendly drink maker Celsius Holdings, which has seen its share price jump over 1,500% in five years.
Over a five-year period, neither basket would eclipse the returns provided by the Nasdaq, which is up 67%, but both have performed far better than the FTSE100 in this timeframe, down 5%.
As well as Celsius Holdings, the vegan basket included well known meat and dairy substitute companies such as Beyond Meat and Oatly, both of which have seen their share price plummet in 2022, not long after listing on the Nasdaq. The basket was also composed of vegan-focused brands in other sectors, for example, the cosmetics company ELF Beauty. The meat stock basket included meat producing giants such as Brazilian firm JBS, the largest meat processing company in the world, and US meat producer Tyson Foods.
Commenting, Ben Laidler, Global Markets Strategist at eToro, said: "Many of the so-called vegan stocks soared during the broader VC and tech boom of the last few years but they are now crashing down to earth amid tough market conditions, high interest rates and recession risks. Many of these stocks have performed dreadfully after relatively recent listings, though successes such as Celsius show that there are certainly opportunities in this space.
"In terms of what’s driving recent trends, whilst vegan adoption continues to build, protein incumbents and established food giants are now fighting back and expanding into new non-meat product lines, leveraging their scale and distribution advantages. Traditional meat stocks’ performance has been slow and steady and these companies are likely to now be benefiting from consumers trading down to cheaper protein sources in the face of the cost of living crisis, whilst investors are leaning more towards staple value stocks in the current climate."
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