U.s. Meat Giant Tyson Foods to Launch Plant-based Food in Asia-pacific

Impossible Foods Inc, Nestle SA, Beyond Meat Inc have already entered Asia with their plant-based meat products, expecting rising demand for the protein from consumers conscious about health, animal welfare and the environment.

Retail sales of meat substitutes in Asia-Pacific reached $16.3 billion in 2020 and are expected to exceed $20 billion by 2025, according to data provided by Euromonitor to Tyson Foods.

“The Asian market is a natural fit for this category with traditional plant-based products like tofu already entrenched in the culture,” Tan Sun, president, Tyson Foods Asia-Pacific, said in a statement.

Tyson Foods, the biggest U.S. producer of animal meat by sales, said on Tuesday it would first roll out plant-based nuggets, strips, and bites in Malaysia under its First Pride brand, with a view to expand into other markets.

The Jimmy Dean sausage maker launched its plant-based products late last year from its Raised & Rooted brand in Europe.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)

Tyson Foods Expects Costs to Hit Profit as Lifts Revenue Outlook

Higher raw material costs have led U.S. meat producers to raise prices, while demand recovers after an easing of pandemic-led restrictions on dining out.

Overall, Tyson said it expects fiscal 2021 revenue to reach $44 billion to $46 billion. Revenue had previously been forecast at the upper end of a $42 billion to $44 billion range.

Tyson Chief Executive Dean Banks warned, however, that rising costs will pressure profits later this year.

“We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year,” he said.

Tyson said for the second quarter ended April 3, sales rose about 4% to $11.30 billion from a year earlier, exceeding forecasts from analysts, who were on average expecting $11.19 billion, IBES data from Refinitiv showed.

Higher prices helped Tyson’s chicken segment post 4.6% sales growth, while pork rose 16.7%, even as volumes dropped.

In beef, Tyson’s largest business, sales rose 1.7% from a year ago to $4 billion, as prices climbed 7.5% and volumes fell 5.8%. Tyson said it now expects its beef division to post improved fiscal 2021 results compared to last year.

“Commodity beef drove the beat,” Credit Suisse said.

Net income attributable to Tyson increased to $476 million, or $1.30 per share, from $376 million, or $1.03 per share, a year earlier. Excluding items, Tyson earned $1.34 per share, compared with estimates of $1.12.

Shares in Tyson, which are up 22% this year, were around 3% lower following the results.

(Reporting by Praveen Paramasivam in Bengaluru and Tom Polansek in Chicago; Editing by Shounak Dasgupta, Shinjini Ganguli and Alexander Smith)

Three Top Plays for The January Effect

We’re rapidly approaching the start of 2021 and the January Effect, when market players scoop up the prior year’s biggest losers in hopes of high percentage returns. The new crop of hopefuls is smaller than in prior years because many stocks are trading close to 52-week or all-time highs, restricting the available equity pool. It’s also important to do your homework, if interested in this classic trade, because many losers are destined for even lower prices.

U.S. laws require that investors pay capital gains tax when they sell shares for a profit, except in retirement accounts, which gets taxed at the time of distribution. This requirement induces many folks to keep their strongest stocks through December to lower annual tax bills. In turn, these winners often get sold aggressively in January, freeing up capital that can be risked on bottom fishing, value hunting, and all the other reasons that market players buy cheap stocks.

Let’s look at three prime candidates for the January Effect.

Intel

Intel Corp. (INTC) has done just about everything wrong in 2020. Delayed product rollouts and weak management have allowed smaller rivals to pick up critical market share, making the tech icon one of the worst mega-cap performers, with a 16% year-to-date loss compared to the Nasdaq-100’s 40%+ return. Even so, sidelined investors are hoping for a management shake-up and could pick up shares aggressively in 2021.

Tyson Foods

Tyson Foods Inc. (TSN) and many meatpackers ignored the growing pandemic in the first quarter and failed to take precautions to keep their workers safe. The ensuring scandal cost lives, with widespread infections at plants all across the Midwest and South. Supply chains then broke down, raising prices while lowering revenues. The industry is now in recovery mode but the stock is still down more than 24% for the year, making it an ideal January Effect candidate.

Boston Scientific

Boston Scientific Corp. (BSX) has posted weak or negative growth in the last three quarters. In addition, recalls and lawsuits have plagued the company for many years, raising questions about research methodology and quality control. The stock posted an all-time high in December 2019 and fell to a three-year low in March. The subsequent recovery failed in September, yielding a steady downtick that’s now brought the annual loss to a painful 26%.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.