How Have Indoor Agriculture Stocks Performed This Year?

The NASDAQ Composite Index, FTSE 100, NYSE, S&P 500, and DOW Jones have all fallen since January 2022. While some indoor agriculture businesses were able to reduce the impact of the current macro event, others were hit by bad news that negatively impacted their performance on the stock market. The majority of indoor agricultural businesses haven’t yet surpassed sales or profits per share projections, which, at the same time, makes it ideal for their shares to decline.

Recent market conditions have been complicated and have resulted in a great deal of volatility and fear due to a number of dramatic events, such as the Ukrainian War, tensions in Taiwan, the UK’s economy tanking, inflation rates, interest rate hikes, large financial institutions reaching critical levels, the US dollar strengthening, and the energy crisis.

The FTSE 100, NYSE, S&P 500, DOW Jones, and NASDAQ composite Index have all fallen since the start of the year. The aforementioned events have caused the NASDAQ composite to decline by 33.38% since January 2022, the S&P 500 to decline by 20.33%, the NYSE composite to decline by 12.92%, the Dow Jones Industrial to decline by 10.21%, and the Financial Times Stock Exchange 100 to decline by 1.06%.

Naturally, when bigger indexes like the ones mentioned above fall, low-cap (Firms with a market capitalization of about USD 300M to USD 2Bn) companies, like the majority of publicly-traded indoor agriculture companies, also decline. Since they are unclear of the path the economy will take in the next months and years, investors lose interest in speculative investments, which frequently account for the bulk of the valuation of low-cap businesses, and would rather place their bets on less risky securities. The macroeconomic trends, the decline in speculative capital, and the fact that most indoor agricultural companies have not yet surpassed sales or profits per share predictions are the ideal recipe for their shares to decline.

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Disclaimer: The information contained in this editorial is not investment advice, please do your due diligence and refer to your financial analysts before making any investments regardless of the sector, the company, or the current market environment.

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