In May, Australian real estate titan Tim Gurner claimed that millennials are unable to buy houses because they’re overpaying for things like avocado toast (see the video below).
His exact words were, “When I was trying to buy my first home, I wasn’t buying smashed avocado for $19…”
While this is a funny anecdote, the housing markets are far more complicated than this. Any economics professor will tell you that the substitute for buying a home is to rent one. Since there are a handful of factors outside of avocado toast that affect the real estate industry, we’re going to avoid it all together. What we will focus on in this article however, is that avocado prices are on the rise…and there may be a way to profit from it.
According to a recent article from Bloomberg, avocado prices are at their “highest in data going back 19 years.” According to the same article, avocado demand and consumption is rising worldwide, driven further by Starbucks’ (NASDAQ:SBUX) adding avocado spread to its menus. This rise in avocado prices has even hit Chipotle’s (NYSE:CMG) margins on guacamole.
So if avocado demand is set to rise further, and the supply of avocado remains fixed…the price of avocados will continue to rise. What if investors could profit off of this? Well, they can! When I say profiting off of rising avocado prices, I do not mean storing two dozen unripened avocados in your refrigerator to sell at a later date. The real opportunity lays in the avocado stocks. Without further adieu, here are 3 avocado stocks that you may want to invest in.
Fresh Del Monte Produce, Inc. (NYSE:FDP)
Del Monte grows and distributes fruits and vegetables around the world through the company’s various subsidiaries. One of their produce divisions grows and sells avocados, making it a prime candidate to be an avocado stock. By purchasing equity in Del Monte, remember that you’re investing in the whole company, not just the avocado division.
Calavo Growers, Inc. (NASDAQ:CVGW)
Calavo is the avocado-related brand that many see on the shelves at stores like Whole Foods (NASDAQ:WFM) and more. From avocados to ready-made guacamole, Calavo is certainly an avocado stock. While the company is mainly known for its avocados and such, they also cultivate various other fruits and vegetables.
Guacamole, Inc. (NYSE:GUAC)
We’re totally kidding about this one! The ‘GUAC’ ticker symbol is not being used by anyone at the moment, but would be great for the next avocado-related company that hits the markets.
If avocado demand continues to rise alongside avocado prices, you can expect the companies listed above to benefit tremendously. Unless the other costs associated with avocado growth and distribution were to rise at the same rate, their avocado margins will be boosted substantially.
Be sure to do a little more research before diving in on the avocado investing theme, and don’t forget to subscribe to Growth Stock Network so you never miss a growth stock opportunity.