Why Food Service and Cooking Equipment Stocks Surged Today
Restaurant supply specialists had a good day on Tuesday, thanks to positive news regarding COVID-19. Food distributors Performance Food Group (NYSE: PFGC) and US Foods Holding (NYSE: USFD) rose 12.8% and 8.5%, respectively, today. Restaurant equipment maker Middleby (NASDAQ: MIDD) peaked the day's trading action at 14.2%.
Researchers are making progress toward an effective vaccine for the coronavirus. Vaccine developer Novavax started a phase 2 trial of its candidate and should have some preliminary results to share as early as July. Medical giant Merck announced research partnerships on both the vaccine and antiviral treatment sides of the COVID-19 equation. Meanwhile, many states are easing their way into gradual reopenings of shuttered restaurants.
All of the above is potentially good news for restaurant supply experts. Performance Food and US Foods should see their sales of restaurant-quality ingredients rise quickly as consumers make their way back to their favorite eateries. Middleby's top-line recovery should be slower since the company's sales depend on restaurant chains investing in their cooking infrastructure. Investors can look past the immediate effects and bet on the long-term bounce, of course.
Source Fool.com
