Hi there,
Burcon is another plant-based protein company. These seem to be all the rage lately and their share prices have been bid-up in a big way. For its part, Burcon is up by 220% over the past year.
Given their rapid rise in popularity, many of these companies are priced to perfection. Burcon is one such company. It has a market cap of $345M yet generated on 17K in revenue over the past twelve months. In fact, revenue has been on a steady decline since 2017 when it generated 87K in revenue. Growth is priced in, and it will have to deliver and then some to justify current valuations. On the bright side, it is in partnership with Bunge Limited through Merit Functional Foods, a JV of which it owns 33 per cent. Bunge is one of the largest oilseed and grain companies in the world.
While we like the plant-based industries, we just can't get past some of these valuations. BU is no exception and it will require flawless execution. We'd exercise caution here and be prepared for considerable volatility. This is definitely not for the value investor, or those with a lower risk profile.
Mat