BC Business
Upstart foodservice franchisor and manufacturer Happy Belly Food Group has more than tripled in value over the past year
The stock: Has the on-and-off U.S.-Canada trade war got you sourcing local substitutes for American brands? Instead of the usual Raisin Bran, consider dropping Sunshine Coast-made Holy Crap cereal in your shopping cart. Indeed, if you think this economic nationalism thing has legs, you might want to take a look at Holy Crap’s Kitsilano-based parent, Happy Belly Food Group (CSE:HBFG), too. As good as Holy Crap might be for your gut, HBFG might be even better for your investment portfolio: the stock has risen 234 percent over the past 12 months. It closed Tuesday (February 4) at $1.07 on the Canadian Securities Exchange.
The drivers: I’ll say this up front—Happy Belly is a money-losing microcap that risks causing shareholders indigestion. It does however have a stable of up-and-coming brands of both consumer packaged goods (Holy Crap, Lumber Heads Food Co.) and foodservice franchise networks (Heal Wellness, IQ Food Co., Joey Turks Island Grill, Lettuce Love Café, Pirho Fresh Greek Grill, Rosie’s Burgers, Via Cibo, Yolks Breakfast). It just closed the acquisition of its first coffee outlet, Smile Tiger Coffee Roasters in Kitchener, Ont.
Third-quarter 2024 revenues were up 69 percent year over year, to $2.54 million, and at least some of that growth was organic. Most of it came on the quick-service restaurant (QSR) side. But the CPG side should benefit from a new national distribution deal with Sysco. As of September 30, Happy Belly had $3.6 million in cash to continue rolling out its expansion and, with luck, make the transition to profitability.
Word on the street: Ventum Capital Markets analyst Devin Schilling has a “buy” rating and $2 price target on the stock. “This cash-flow-positive acquisition offers strong cross-selling potential, with plans to expand Smile Tiger products across Happy Belly’s growing retail footprint, which currently includes 35 locations and is expected to reach 80 by year-end,” he wrote following the announcement of the Smile Tiger takeover in January.
Coming and going: Vancouver-based Hive Digital Technologies (TSXV:HIVE) has acquired a hydro-powered bitcoin mining facility under construction in Paraguay from Toronto-based Bitfarms (TSX:BITF) for US$56 million. The projected net cost to bring it to completion, expected in September, is US$80 million. The project will increase Hive’s crypto mining capacity from 6 Exahash per second to 25 EH/s.