A leader in natural food and personal care products categories
with an extensive portfolio of well-known brands and strong
The Hain Celestial Group Inc.
) offers a healthy investment opportunity for investors. The
stock is poised to surge as the economy gradually revives and the
appetite for organic food increases.
An Attractive Investment Prospect
Hain Celestial remains a healthy option for investors. Barring
a few hiccups, the shares have been portraying an upward trend
since February end and is gradually inching closer to its 52-week
high of $85.48. Considering the last traded price of $81.84 on
Aug 23, the stock has amassed a year-to-date return of roughly
45%. The long-term EPS growth rate stands healthy at 13.6%.
Moreover, the company's last traded price was above the 50 and
200-day moving averages, which stand at $73.45 and $65.16,
respectively. In fact, the stock has been consistently trading
above its 200-day moving average since Mar 19, 2013, but has
remained above the 50-day moving average since Jul 1, 2013.
If we look at the company's earnings surprise history for the
last 13 quarters, Hain Celestial has topped estimates by an
average of 4.6%. In the last concluded quarter, the company
posted earnings of 65 cents a share that comfortably surpassed
the Zacks Consensus Estimate of 62 cents and surged 38.3% year
Management cited that strong top-line growth, integration of
acquired businesses, focus on high margin carrying brands, and
elimination of underperforming private label brands facilitated
the bottom-line growth.
Management now anticipates sales in the range of $2,025
million to $2,050 million in fiscal 2014, reflecting a
year-over-year increase of 17%. Earnings are projected in the
range of $2.95 to $3.05 per share, up 16% to 20% year over
Acquisitions Driving Growth
Acquisitions have played a vital part in Hain Celestial's
strategy of building market share. These acquisitions have not
only widened the company's geographical presence, but have also
provided opportunities to cross-sell products in the U.S.,
Canadian, and European markets.
The company recently acquired leading packaged grocery brands
Hartley's, Gale's, Robertson's, Frank Cooper's and Sun-Pat from
Premier Foods plc. The company also acquired Ella's Kitchen Group
Limited that offers organic baby food products under
approximately 80 brands and provides them in easy to carry
Going forward, we believe that the company will be able to
mitigate the cost pressures through increased productivity and
efficient pricing. Moreover, Hain Celestial has undertaken a
number of initiatives to improve its performance and positioned
itself on the growth trajectory. The company's Stock Keeping Unit
("SKU") rationalization program has helped eliminate SKUs, which
had lower sales volume or weak margins.
However, the company's customers remain sensitive to
macroeconomic factors including interest rate hikes, increase in
fuel and energy costs, credit availability, unemployment levels,
and high household debt levels, which may negatively impact their
disposable income, triggering a shift in focus from higher priced
organic products to cheaper private label brands.
Currently, Hain Celestial carries a Zacks Rank #3 (Hold).
Other stocks worth considering in the food-miscellaneous sector
Pinnacle Foods Inc.
) holding a Zacks Rank #1 (Strong Buy), and
Kraft Foods Group, Inc.
Dole Food Company Inc.
) both carrying a Zacks Rank #2 (Buy).
DOLE FOOD CO (DOLE): Free Stock Analysis
HAIN CELESTIAL (HAIN): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis
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