E Growing A Healthy Portfolio

Hain Celestial (NASDAQ: HAIN), Annie's (NYSE: BNNY), and Whole Foods Market (NASDAQ: WFM) are three ways to clean up your portfolio as others clean up their lifestyle. One could be just right for healthy returns this year. But which one?

Hain is the mid-cap name, Whole Foods, of course, the big cap, and Annie's the small cap. Both Hain and Whole Foods Market have outperformed the S&P 500 over the last year, up 57.33% and 24.91% respectively.

Annie’s growth possibilities

Annie's was a hot ticket when it debuted in 2012, soaring 89% on its first trading day, and had risen to $52.38 in October but is now down 8% year over year. The company most recently disappointed on earnings thanks to higher commodity costs. Analysts are lukewarm to bullish with 7 Holds, 1 Buy, and 1 Strong Buy. Even with the pullback it is still rich with a 46.6 trailing earnings multiple.

Annie's has a line of 135 organic food items but 13 or less, or only 10%, are regularly carried in stores as CEO and co-Founder John Foraker said on the 2014 second quarter call. Getting out "key 33" products as well as new products in the pipeline is a strategic goal. Once these get into the 26,500 plus stores in the US and Canada they do very well as noted on the call.

The company is partly suffering from small cap growing pains with a need to expand number of store venues and better placement. While its macaroni and cheese category is growing stronger with more stores placing them in main aisles instead of "natural" aisle exile, the company has a lot of work ahead moving product to main aisles in mass, club, and grocery stores.

They are growing brand extensions and in 2014 expect to introduce another frozen brand building on the momentum of frozen pizza like the surprisingly popular macaroni and cheese pizza. Altogether the company has identified seven frozen categories worth $12 billion but has only rolled out the one.

Snacks are also a growing category and the company announced it had acquired its Joplin, MO cookie plant for $6 million. CEO Foraker said this should triple its snack production volume. This purchase will be mostly paid for with cash on hand and the company has no debt.

1 2 3
View single page >> |

Annalisa Kraft has no position in these companies.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.