Food delivery stocks are all the rage right now. Why? Well, unless you’ve been living under a rock, you know that the world of food service has changed dramatically in 2020. So what does that mean for your trading or investing plan? Shouldn’t they change too with the times?
With the stock market recovering to all time highs from the March 2020 lows, its time to look at stocks that are poised to capitalize in the food delivery service market.
Now, most sectors are fairly uncertain as to what is on the horizon. Except for one, and that’s the food delivery business. This is why you’re going to want to pay attention to the list of stocks that are in the right place, at the right time, to take up the most market share in this space.
Table of Contents
Food Delivery Stocks
- Food delivery stocks moving during the CODVID-19 pandemic:
- $WTRH
- $UBER
- $APRN
- $HELFFF
- Instacart 2021 IPO *(not out yet but very hyped)
- $GRUB
Instead of collapsing like pretty much every other stock out there, food delivery stocks have bucked the broader market trend.
Moreover, not only have they fought back, but they’ve also rallied! Am I shocked? Since people still need to eat, restaurants are closed, and no one’s allowed to leave the house, no, I’m not.
In the end, we’re left with few options, and one of them is to order in. And ordering in they are. CEO’s from food delivery companies like Waitr, Uber Eats, Postmates, Doordash, etc indicate demand has skyrocketed over the past few weeks.
Make sure to take our online trading courses to learn how to trade food delivery stocks. Just look at these two food delivery stocks which have exploded higher in 2020 amid the coronavirus panic:
- Waitr (NASDAQ:WTRH)
- HelloFresh (OTCMKTS:HLFFF)
Waitr (WTRH): Food Delivery Stocks
Founded in 2013, Waitr is a leader in the on-demand food ordering and delivery arena. Recently, Waitr acquired food delivery company Bite Squad, which connects local restaurants to diners in under served U.S. markets.
Combined, they are an easy way to discover, order and receive great food from local restaurants and national chains.
As of December 31, 2019, Waitr and Bite Squad operated in small and medium-sized markets in the United States in approximately 640 cities.
If food delivery stocks are skyrocketing, then we’ll be discussing the moves in our live trading room.
Waitr Year To Date Gain as of November 27th 2020: 816.6%
Up a jaw-dropping 816.6% in 2020, food delivery platform Waitr is not just the hottest food delivery stock out there but also one of the hottest stocks in the market on the whole.
With volatility numbers that would make any day trader salivate, you’ll want to put this gem on your watch list.
$WTRH had a nice setup on the 15 min chart using the algos and block trade levels (pink) to trade a long trade on a block trade breakout. Read about FlowTrade charting platform
Why I Would Scalp WTRH, Not Invest WTRH
If you look at the market share numbers for the food delivery market, you’ll see it this industry is dominated by Uber Eats, Postmates, Doordash and GrubHub (NYSE:GRUB).
Collectively, those four platforms own 98% of the U.S. food delivery market. Moreover, Waitr is fighting for the 2% of scraps leftover in the market.
To make matters worse, the company operates at a dismal 23% gross margin. And with just $29 million in cash on the balance sheet, against over $130 million in debt, they aren’t in a good spot.
Quite frankly, it means that to avoid insolvency, Waitr needs to acquire a ton of new customers. On no uncertain terms, that’s a tall order.
With this in mind, I’m not sure Waitr can do it, even with coronavirus tailwinds, in a market so intensely competitive. Stock trading is all about knowing when to trade and when to site out.
$GRUB report via StockRover – the best place to review a stocks fundamentals.
HelloFresh (HLFFF): Food Delivery Stocks
Year-to-date gain: 190%
Hello gains!
Much like fellow meal-kit maker Blue Apron, HelloFresh is a big and growing player in this market. From 2016 to 2019, HelloFresh has seen its share price grow from 12% to 26%.
Once again, I would try to scalp HelloFresh, just like Waitr. Considering COVID-19 likely isn’t going anywhere any time soon, it’s volatility should continue along with your profits with time.
The monthly chart of $HLFFF is trending above the 9EMA which is considered a high momentum stock, as you can see, on the right hand side of the chart, we have high volume in the lower levels, and less near the top. Read up on TrendSpider to learn more on this charting platform.
Are Food Delivery Services Safe?
- According to the FDA, there is no evidence that food or food packaging transmits Coronavirus. On the contrary, the problem isn’t the food, it’s the person delivering the food. To reduce the risk of transmission, ask delivery persons to leave your food outside the door.
Are Meal Kits Safe?
It’s understandable many may be nervous about handling packages, but you shouldn’t fear. According to the CDC:
But, even though the virus can survive for up to 24 hours on cardboard, the likelihood is low. Just make sure to wash your hands thoroughly after handling any packages. Good hygiene is important right now, but there is currently not much reason to be afraid of ordering food from somewhere. Just be smart about it.
Final Thoughts
Right now, the market is volatile, and this is a good thing for day traders. For many, volatility is their bread and butter. And when used in conjunction with technical indicators, you can find ideal entry and exit points. We will show you how.
Take your bite out of the food delivery market and capitalize on this once in a lifetime opportunity, join our trading service now.
