Hain Celestial (HAIN)
From Cabot Wealth Advisory 1/5/15 Sign up for Cabot Wealth Advisory—it’s free!
I do see increasing numbers of Americans trying to improve their eating habits (and exercising more too). In fact, obesity has finally reached a plateau in this country, and I’m optimistic that as this trend continues, this slow revolution will lead to better overall health and less demand for drugs and expensive health treatments.
And I expect one winner in this revolution to be: Hain Celestial Group (HAIN).
Hain Celestial is the leading distributor of natural and organic food products in the U.S., with $2.3 billion in revenues over the past 12 months.
The company’s brands include Celestial Seasonings, Terra, Garden of Eatin’, Health Valley, WestSoy, Earth’s Best, Arrowhead Mills, DeBoles, Hain Pure Foods, FreeBird, Hollywood, Spectrum Naturals, Spectrum Essentials, Walnut Acres Organic, Imagine Foods, Rice Dream, Soy Dream, Rosetto, Ethnic Gourmet, Yves Veggie Cuisine, Linda McCartney, Realeat, Lima, Grains Noirs, Natumi, JASON, Zia Natural Skincare, Avalon Organics, Alba Botanica and Queen Helene.
In 2014, the company added two more brands to its family.
First was Rudi’s Organic Bakery, based in Boulder, Colorado. Rudi’s is the leading organic and gluten-free baker in the U.S., and also sells in Canada.
Second was Tilda, founded in the U.K. in the 1960s to serve the food needs of Asian immigrants. The company’s core product is basmati rice, but it has diversified into other rice products and now sells far beyond the U.K. in the Middle East, India, North Africa, continental Europe, the U.S. and Canada.
Revenue growth at Hain Celestial in each of the past four years has ranged from 21% to 26%, while earnings growth has ranged from 25% to 37%. For 2015, analysts are looking for 21% earning growth and for 2016, 14%, but both numbers are probably conservative, given that Hain is likely to acquire more brands in that time.
And those brands could come from anywhere in the world! Today, 60% of Hain’s revenues come from the U.S., while 30% come from the U.K. and 10% from the rest of the world.
The stock does not yet pay a dividend; the company is still in good growth mode, as illustrated by its chart.
HAIN has been trending higher for years, reflecting the company’s fundamental growth, and that uptrend accelerated in the second half of last year, kicked off first by an excellent earnings report in August and then the acquisition of Annie’s (previously traded as BNNY) by General Mills (GIS).
Short-term, therefore, HAIN might be a bit high, and if you wait long enough you might be able to get it on a pullback to its 200-day moving average, currently at 48.But the stock may be even higher then!
So, if you want to simply buy here and hold for the long term, I think that will work out if you’re a very patient investor.
But if you want regular updates on the stock, you’ll find them in Cabot Top Ten Trader, where Mike Cintolo originally recommended HAIN back in September. Click here for more information.
|The Hain Celestial Group (HAIN)
1111 Marcus Avenue
Lake Success, New York 11042
|Index Membership: N/A
Industry: Food Wholesale
Full Time Employees: 4,400