We recently compiled a list of the 9 Best Pizza Stocks to Buy Now. In this article, we are going to take a look at where Bunge Global SA (NYSE:BG) stands against the other pizza stocks.
How’s the Pizza Market Doing?
Originating from Italy hundreds of years ago, and spreading across the globe like wildfire ever since, pizza has always been the consumers’ go-to food option, and hence, its market is growing to date. As such, as reported in one of our articles on best pizza stocks to buy, the pizza market is set to experience a CAGR of 4.45% during the period 2024-2032, growing from $148.6 billion in 2023 to $222.5 billion by 2032. Similarly, the frozen pizza segment is also expected to increase during the period 2023-2028, gathering a market size of $5.96 billion during the period, showcasing a CAGR of 4.96%.
The popularity of pizza can be judged from the statistics showing that there are 245,000 pizza restaurants in the world, and around 77,000 restaurants within the U.S. The U.S. itself experienced record-high pizza sales of $46.9 billion in 2022, thanks to over 7,000 units opening up in the eight years up till 2022. This reinforces the fact that the largest pizza chains in the world are based in the U.S. Pizza Hut, one of the biggest pizza brands in the world, is the oldest one, which was founded back in 1958 in Kansas, USA.
What’s Cooking in the Industry?
Within the frozen pizza segment, meat toppings dominate the market as it has a share of 56% in sales, while vegetable toppings have a share of 26%. In contrast, cheese toppings are also competing nicely, as it has a 14% share, as reported by media.market.us. DiGiorno, Red Baron, and Totino’s Party Pizza are the top frozen pizza brands with the greatest brand awareness.
The recent trends in the pizza market include rising demand for vegan pizzas (frozen or otherwise); this evolving market of pizza has got is on a roll, as new demands keep popping up for cheese substitutes, all sorts of pepperoni, Mexican style meats like Birria and chorizo, and new topping varieties
What’s new in the industry is the rapid acceleration of technology use in the context of operators, as a survey shows that 748 pizza makers in the U.S. find online ordering the new go-to way of consuming pizzas and that 78.21% of the producers are investing in a great deal to up their brand presence across the internet. The optimism is on the high side as well amongst the pizza makers as most believe in sales growth in the next twelve months.
Thus, certainly, the pizza market is one to grow indefinitely (or at least it should), and hence, to capitalize on this growth, one must know the best pizza stock to buy. So, let’s move on to our list of 9 Best Pizza Stocks to Buy Now.
Methodology
To curate our list of 9 Best Pizza Stocks to Buy Now, we gathered a list of all companies with a significant presence in the pizza industry and related industries of cheese and flour. We then further narrowed them down on the basis of various metrics like institutional ownership, the number of analysts watching the stock, and the overall financial health of respective stocks. We ranked the finest remaining companies by the number of hedge funds that had stake in them as of Q2, 2024.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial view of an orchard of different fruits, representing the abundance of the agribusiness.
Bunge Global SA (NYSE:BG)
Number of Hedge Fund Holders: 26
Upside Potential: 19.78%
Bunge Global SA (NYSE:BG) operates across four segments: Milling, Agribusiness, refined and specialty oils, sugar, and bioenergy. The agribusiness and food company offers raw materials for the pizza industry, providing flour for processing purposes.
Bunge Global SA (NYSE:BG) experienced a mixed performance in Q2 2024, in which the earnings per share (EPS) took a huge dip, falling from $4.1 per share in Q2 2023 to $0.5 per share in Q2 2024. Bunge attributed this fall to various one-time adjustments pertaining to mark-to-market timing differences, and transaction and integration costs relating to business combination with Viterra. Nevertheless, the adjusted EPS of $1.74 in the quarter was still a decrease from $3.7 in Q2 2023.
While the company’s agribusiness segment experienced a decline in North and South American, and Asian regions, the refined and specialty oils segment performed better than expected, and is expected to perform above expectations.
It was also notable that the lower ethanol prices affected the company’s non-core sugar and bioenergy joint ventures.
The growth prospects of the company have expanded in the recent past, thanks to continued expansion across different segments. Bunge is stressing largely on greenfield projects, with forecasted capex to be in the range of $1.2-$1.4 billion. The company’s strategic investments consist of the acquisition of CJ Selecta, which makes soy-based products, and the acquisition of an oil refinery in Avondale, La.
As of Q2, 2024, 26 hedge fund holders are bullish on the stock, and 11 analysts are seeing a price appreciation of roughly 20%. Hence, the stock makes it into our list of 9 Best Pizza Stocks to Buy Now.
Overall BG ranks 6th on our list of the best pizza stocks to buy. While we acknowledge the potential of BG as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than BG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.