Why the Primary Opinion Ltd share price is up 175% in a week

With another 26% gain today, the Primary Opinion Ltd (ASX:POP) share price has now rocketed 175% in one week.

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The Primary Opinion Ltd (ASX: POP) share price has certainly had a strong start to the week.

In morning trade its shares are up 26% to 4.4 cents. This means its shares have now gained 175% in just five days.

Why are its shares going gangbusters?

After transforming itself from a social media company into a legal services business, last year the company reinvented itself once again as a food company by acquiring a 48% stake in Maggie Beer Products for $15 million.

Whilst this went down well with the market at the time, since the acquisition its shares have fizzled and have only just come back to life after last week's surprise announcement.

That announcement revealed that ex-Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain has joined the company as its managing director and a substantial shareholder.

McBain will receive $350,000 annual salary and was granted a placement of 35 million shares at 1.8 cents apiece when she joined. A shareholder vote will decide on whether McBain receives a further 35 million shares at 1.8 cents per share.

Furthermore, McBain has a long-term incentive of 70 million options to be issued as soon as practicable, with an exercise price of 2 cents per option, exercisable over a 4 year term.

What's next?

Maggie Beer Products reported a 37% drop in first-half net profit to $455,000 at the start of this year. This means McBain certainly will have a job on her hands to get things moving in the right direction again.

But thankfully her experience in building food brands and growing export markets does put her in a good position to deliver on this.

But whether it will be enough to justify the recent share price movements, I'm not entirely sure at this stage.

The Maggie Beer brand is undoubtedly strong, but only time will tell whether the brand has the same resonance with consumers internationally as it does here in Australia.

So for now I would suggest investors hold off an investment and keep Primary Opinion on their watchlist instead.

Investors looking for options in the food industry may be better off considering fast food ahead of fine food with an investment in either Collins Foods Ltd (ASX: CKF) or Domino's Pizza Enterprises Ltd. (ASX:DMP).

Motley Fool contributor James Mickleboro owns shares of Collins Food. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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