Recently, I increased my stake in Agronomics (LSE: I and ANIC) intend to continue purchasing this penny stock. After noticing that the share price had fallen below 10p for the first time since December 2020, I made my most recent purchase.
I’m optimistic for the following reasons:
Agronomics is a venture capital firm that invests in new businesses in the nascent field of cellular agriculture. It is listed on AIM. That is, cultivating crops or raising animals for slaughter in order to produce agricultural products directly from cells.
The products are made from real animal cells, which is called cultivating them. Along these lines, dissimilar to plant-based items, which are battling to build up some momentum with purchasers, this is genuine meat. It is just grown in a different environment than a field or cage for consumption.
As a result, I am able to consume a chicken breast that was never taken from a live bird, implying that there is no evidence of animal cruelty.
True, this sounds like something out of science fiction. However, I also find the cloning of sheep and in vitro fertilization (IVF) equally implausible. Yet we are here. As a result, I don’t think it’s too far-fetched to imagine new businesses disrupting a portion of the $1.3 trillion global meat, poultry, and seafood market.
The US Department of Agriculture (USDA) granted two food technology startups permission to sell chicken that had been grown in a laboratory in June. These were Great Meat (claimed by Eat Just) and Potential gain Food sources.
In a laboratory, East Just makes nuggets from animal muscle cells. Upside Foods, on the other hand, is a privately held startup that is part of Scottish Mortgage Investment Trust’s portfolio.
Similar start-ups like lab-grown chicken, pork, beef, bluefin tuna, coffee, cocoa, dog food, and dairy products are invested in by Agronomics.
Additionally, it owns 7% of VitroLabs, a US-based business that produces billions of square feet of leather without harming a single cow. Gucci’s owner, luxury conglomerate Kering, has provided VitroLabs with cultivated leather for its products.
Something else I like about Agronomics is individuals included, outstandingly non-leader seat Richard Reed and chief tycoon Jim Mellon. Reed helped to establish Blameless Beverages, the smoothie organization that Coca purchased in 2013 in an arrangement that supposedly esteemed it at £320m.
As a result, he has firsthand knowledge of starting from scratch and selling a consumer brand for a hefty sum. If major players in the food industry like Tyson Foods decide to look into making significant acquisitions in the sector, that ought to be of use.
The UK’s Food Standards Agency received the first application for cultivated meat approval in August. This was to sell developed meat steaks and follows a comparative ongoing application in Switzerland. In addition to the United States, approvals have already been granted in Singapore.
Nonetheless, the inescapable gamble here is that it could require one more ten years or somewhere in the vicinity (if at any time) for developed meat to go standard. Even though these products are arguably “cleaner,” they still cost more to make because they don’t contain various antibiotics. As a result, manufacturing costs must continue to decrease.
Nonetheless, at 9p per share, I find the overall risk-reward arrangement very appealing. Agronomics has smart backing, no debt, and a balance sheet of over £150 million. When I get some extra cash, I’m going to keep buying shares.