Simply Good Foods Co. Makes Simply Good Stock Investment (NASDAQ:SMPL)

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Investment thesis

We are about to use Simply Good Foods Co. (SMPL) to illustrate a path to superior performance from wealth-generating common stock investments.

If your investment goal is to build wealth in your portfolio as quickly as and safely as possible, you need to stop looking alone the company’s past financial records and long-term stock market performance records. You need to know what knowledgeable market professionals expect future stock prices to do, how long it may take and what is the likelihood that these goals will be achieved in successive similar efforts.

In short, forget the 20th century tactics of “investing prudently, passively and for the long term while avoiding risk” and adopt the strategy of creating wealth. current asset investment strategy that has demonstrated in 40% of this 21st century that this is a far superior approach.

This strategy involves having market professionals (who can afford the costs and have the human resources to do thorough, competent and timely research using contemporary information technology) do the heavy lifting of the details. essentials, while you take on the big payoff making decisions about entry and exit prices and timing of capital commitment.

The typical gain from such a strategic change has been to produce a capital gain net rates at 3 to 5 or more typical long-term investor accumulations of 8% to 12% per annum.

The difference is mainly due to a discipline of use time more efficiently.

Description of the activity of the action concerned

“The Simply Good Foods Company operates as a packaged food and beverage company for consumers in North America and internationally. The company develops, markets and sells snacks and meal replacements. It offers primarily nutritional bars, ready-to-drink (RTD) shakes, sweet and savory snacks, protein bars, cookies, pizzas, protein chips, recipes and confectionery products, as well as licensed frozen meals. The company distributes its products to various retail channels, such as mass retail, grocery and drug chains, club stores, convenience stores, gas stations and other channels.It also sells its products through e-commerce channels, including, and Simply Good Foods is headquartered in Denver, Colorado.

Source: Yahoo Finance

Estimates of growth by street analysts

Yahoo finance

Source: Yahoo Finance

Comparison of alternative investments

Start by measuring the competitive value of the key value: who has the best prospects for rewards, at what risk exposure?

Price change forecasts derived from MM hedging

Used with permission

The trade-offs here are between short-term upside price gains (green horizontal scale) considered worth protecting by market makers with short positions in each of the ETFs, and past actual price declines experienced during ownership of these ETFs (red vertical scale). ladder). Both scales are percent change from zero to 25%. Desirable locations are bottom and right.

The intersections of these coordinates with the numbered positions are identified by the stock symbols in the blue field to the right. The concept of “market average” SPDR S&P 500 Index ETF (SPY) at location [10] gives an idea of ​​the standards of compromise. SPL at [5] is our main goal.

The dotted diagonal line marks the points of equal upward price change predictions derived from Market-Maker [MM] hedging actions and actual worst-case price declines from positions that could have been taken as a result of earlier MA predictions like today’s.

This map is a good starting point, but it may only cover some of the investment characteristics that must often influence an investor’s choice of where to invest their capital. Other considerations are shown in Figure 2.

Figure 2

Detailed comparative data

used with permission)

SMPL with a range index of 17 [G] has fewer downsides in its price range prediction, the remaining 83% of the prediction range is +16.1% between today’s price of $39.61 and the top of the prediction range , $45.98. Moreover, the advantage of SMPL [E] of +16.1% experienced worst-case price declines of only -4.7% [F] in his 49 before [L] RI cases 17 in the last 5 years of 967 MM forecast [M]. This [E] at [F] the comparison produces a favorable Reward/Risk ratio [T] of 3.4 to 1, better than all other direct investment alternatives.

And where SMPL has an added advantage is in its past performance of these earlier 17MM RI forecasts. Of the 49 [L], 43 had profitable outcomes, a win rating of 89 out of 100. The average holding period for the 49 previous forecasts of the RI 19, including the 6 loss outcomes that expired at the limit of the 3-month holding period (63 market days) was 41 days. Only two of the investment alternatives performed better in terms of time investment and net realized gains [ I ] were lower than those of the SMPL.

Market index average gain rates at the lows of this Covid-hit period have the S&P500 bid just 6.7 bps/day, or a CAGR of around +24%. Our MM forecast population of some 3,600 stocks has a low average realized return of just 4.8% CAGR. But there are, as usual, a few select stocks where past performance of current expectations has produced net triple-digit returns.

By gathering all the factors aligned by figure 2 in its column [R], the highest ranked equity investments in the packaged food industry are SMPL and PFGC. While SMPL is only slightly larger than PFGC, its prospects for a reward/risk ratio and the gains made are stronger.

When we make forecasts, we dose what matters because it is the result of the following activity that counts. Beyond that, the underlying forecast may well change and alter the forecast. We are therefore reactive to the most relevant advice, which is most of the time at the moment.

Recent the price interval predicted trend for SMPL

picture 3

Daily forecast of the MM price range over the last 6 months

(used with permission)


Currently, the most promising short-term wealth-creating packaged food stock is Simply Good Foods Co.

Additional disclosure: Peter Way and generations of the Way family are long-term providers of (earlier) perspective information helping professionals and [now] individual investors distinguish between wealth-building opportunities in individual stocks and ETFs. We do not manage money for others outside the family, but provide pro bono advice to a limited number of non-profit organizations.

We strongly believe that investors should keep their skin in their game by actively initiating capital commitment choices and the time investments in their personal portfolios. Thus, our information presents as an indication of what arguably the most knowledgeable professional investors think, revealed by their own self-protection hedging actions, what is most likely to happen to specific issue prices in the weeks and the coming months. Evidence of how these past forecasts have worked is regularly provided on our SA blog. Our website,, has more information.

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