In his recent Real Money column "And Why Not Own Disruptive Stocks Run by Brilliant People?" Jim Cramer asks the rhetorical question: What do money managers get wrong when trying to value stocks like Beyond Meat (BYND) ? They only look at the company through a spreadsheet instead of looking at the scale of the opportunity, said Cramer.
Cramer believes Beyond Meat justifies its valuation because it's more than just a company, it's an ethos. As meat packing plants struggle with coronavirus outbreaks, Beyond Meat has responded by lowering prices to take market share and introduce its healthier alternative to more consumers. It's not only what millennials want, it's what they're investing in.
Beyond Meat has a following and market opportunities far greater than traditional metrics can calculate, and that's why their stocks continue to soar.
We looked at Beyond Meat earlier this month and wrote that, "It is interesting how supply-chain problems with beef, pork, and chicken has been a boon to BYND. The charts are positioned for further gains. Aggressive traders could go long BYND on a small dip to $120 or on strength above $135. Risk to $105 for now. The Point and Figure target is $200." Traders got the dip to $120 the next day.
Let's check the charts again.
In the updated daily bar chart of BYND, below, we can see that prices have spent the last week above the highs of January and February. Prices have broken out of the base and held the gains. Impatient traders may be expecting prices to soar once they got above $135 but sometimes patience is a necessary ingredient to successful investing.
The slope of the 50-day moving average line has turned up and the On-Balance-Volume (OBV) has been strong. The Moving Average Convergence Divergence (MACD) oscillator has narrowed slightly but is still pointed up.
In this weekly Japanese candlestick chart of BYND, we can see that traders rejected the prices above $135 last week but renewed strength above $150 should refresh the rally. The weekly OBV line is bullish and so is the MACD oscillator as it quickly heads up to the zero line.
In this Point and Figure chart of BYND, below, we can see a potential upside price target in the $261 area.
Bottom-line strategy: If you did not get to buy BYND on the dip to $120 you could consider going long on strength above $140 and $145. Risk a close below $130. The $195-$200 area is our first upside price target with the $260 our intermediate-term target.
