Numbers & Narratives – March 24, 2021

Numbers & Narratives – March 24, 2021

Numbers

#1: GrowGeneration ($GRWG) ranking in the March 22 Investor’s Business Daily IBD 50 weekly computer-generated list. Previously unranked, GRWG was given a sell signal this week after a break of the 10-week moving average.

#22 and #40: Deere ($DE) and Scotts Miracle-Gro ($SMG) rankings in the March 22 Investor’s Business Daily IBD 50 weekly computer-generated list. Deere slipped 11 spots from the previous week and maintained its “extended” label at $372.48. Scotts, which also slipped 11 slots from the previous week, was given a sell signal at $200.98 the week of March 8, but now given a buy point of $250.10 contingent upon forming “right side of cup base.”  Subscribe to IBD here.

45,928: Number of Deere shares sold by ARK Autonomous Technology & Robotics ETF (ARKQ) on Monday, March 22, 2021. The shares sold represent roughly 0.5% of the ETF. ARK makes its daily buy/sell information available to all investors here.

Stocktwits momentum: Among agriculture stocks with more than 300 followers on Stocktwits, the 5 largest percentage increase in followers for the week of March 15, 2021 to March 22, 2021 were:

AppHarvest ($APPH): +7.9%

Bioceres Crop Solutions ($BIOX): +5.7%

GreenGro Technologies ($GRNH): +2.7%

Raven Industries ($RAVN): +2.2%

GrowGeneration ($GRWG): +1.2%

Narratives

UK lifting ban on gene editing: The UK is expected to lift a ban on gene edited foods, as reported by the Daily Mail and i newspaper . Gene editing is not the same as genetic modification. The decision would open the UK end market for companies involved in gene editing, from large caps like Corteva ($CTVA) to mid-caps and small-caps like Arcadia Biosciences ($RKDA), Calyxt ($CLXT), Evogene ($EVGN), Origin Agritech ($SEED), S&W Seed Company ($SANW), and Yield10 ($YTEN.)

“Optimism in the ag market” and autonomous carts: Strength in commodity prices has led to optimism among farmer customers, Raven Industries ($RAVN) said in its Q42021 conference call yesterday (3/23/21.) The company said it is already taking orders for its autonomous grain carts and expects to sell 75 units in a limited release this year, with delivery to customers in time for North America’s 2021 harvest. Steven Brazones, VP of Applied Technology, said Raven Autonomy is “the largest investment our company has ever made” and expands Raven’s total addressable market by more than 5x. In response to a question from Oppenheimer’s Kristen Owen regarding precision spray applications, CEO Dan Rykhus said Raven is in a “very enviable position” with “industry-leading” technology in the spot-spray space. See full transcript via SeekingAlpha. RAVN shares fell 7.35% in a down market Wednesday, and are up 10.34% year to date.

“Cautiously optimistic”: Marrone Bio Innovations ($MBII) held its Q4/full-year 2020 results call after market close on Tuesday, March 23, 2021. Marrone describes itself as “a growth-oriented agricultural company leading the movement to a more sustainable world through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition.” Its biological (i.e., derived from nature) products are designed to complement or in some cases replace conventional synthetic ag inputs like pesticides. In a letter to shareholders, CEO Kevin Helash said the company remains “cautiously optimistic” about the 2021 growing season. “There are strong tailwinds in the agricultural sector, including very healthy grain prices, but we are also working hard to mitigate the headwinds from COVID-19 and the challenging start to the year in the United States from a weather perspective,” Helash wrote. The company expects full-year revenue growth in the mid-20% range, with annual gross margins in the mid-50% range – and a goal to hold operating expenses in line with 2020 levels, plus inflation. On the earnings call with analysts, discussion focused on Marrone’s ambitious expansion plans for Latin America, and a signal that the company is looking to make “selective acquisitions” to complement its global portfolio. The company also detailed its desire to expand its presence in conventional row crop operations (e.g., corn and soy.) These plans were laid out in greater detail in the company’s January 2021 “Investor Primer.” Full earnings call transcript via SeekingAlpha, and earnings press release via MBII website. Marrone shares popped roughly 7% after hours Wednesday; shares are up 94.4% year to date and up 189% over the past 12 months.

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